ACCT 2200 -Quiz 5 & 6

Question 1 (1 point)
 
A negative net cash flow from operating activities:
Question 1 options:
  A)  indicates the company is selling its assets for more than it cost to purchase them which is a good sign for cash flows

  B)  indicates the company is paying more money to owners and creditors than it is receiving from them

  C)  indicates the company is re-investing in itself in order to grow and expand

  D)  indicates the company had a net loss using the cash basis of accounting

  E)  indicates the company is selling off its long term assets which is not a good sign for financial health

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Question 2 (1.5 points)
 
Question 2 options:
The following selected account balances were taken from Buckeye Company's general ledger at January 1, 2005 and December 31, 2005:

                  January 1, 2005         December 31, 2005

  Unearned revenue       12,000                20,000
  Inventory              59,000                42,000
  Accounts payable       40,000                51,000
  Salaries payable        9,000                 3,000
  Investments            75,000                68,000
  Accounts receivable    63,000                96,000
  Land                   58,000                88,000
  Mortgage payable      120,000                95,000
  Common stock          100,000               180,000
  Retained earnings      22,000                35,000

The following information was taken from Buckeye Company's 2005 income statement:

  Sales revenue                   $420,000
  Cost of goods sold               300,000
  Salaries expense                  88,000
  Loss on sale of investments        6,000
  Net income                      $ 26,000

Calculate the amount of cash paid to employees for salaries during 2005. Do not use decimals
in your answer.
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Question 3 (2 points)
 
Question 3 options:
The following selected account balances were taken from Buckeye Company's general ledger at January 1, 2005 and December 31, 2005:

                    January 1, 2005      December 31, 2005
Accounts receivable    51,000                70,000
Inventory              39,000                28,000
Accounts payable       45,000                51,000
Salaries payable        7,000                 3,000
Investments            46,000                59,000
Common stock          110,000               130,000
Retained earnings      25,000                41,000
The following selected information was taken from Buckeye Company's 2005 statement of cash flows:
Cash collected from customers           $385,000
Cash paid to purchase inventory          199,000
Cash paid to employees                    85,000
Cash paid to purchase investments         40,000
Cash received from sale of investments    35,000
Cash paid for dividends                   30,000

Calculate the amount of the gain on sale of investments reported in Buckeye Company's 2005 income statement. Do not use decimals in your answer.

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Question 4 (3 points)
 
For each transaction listed below, indicate where it would be presented on the statement of cash flows. Enter the number that corresponds to your answer in the box provided. Answer choices may be used once, more than once, or not at all. Be careful with matching questions because carmen randomizes the matches. Thus, if you print out the quiz to work on it and then enter your answers later in the week, it is very likely the order of the matches will be different. Therefore, exercise caution when entering your answers into carmen. Quiz scores will not be adjusted for errors in entering choices.
Question 4 options:
  proceeds from the sale of land
  collection of accounts receivable from sales to customers
  cash paid for advertising
  cash received as interest from loans that were made to customers
  purchase of a copyright for cash
  proceeds from the sale of common stock
  1. operating activity cash inflow
2. operating activity cash outflow
3. investing activity cash inflow
4. investing activity cash outflow
5. financing activity cash inflow
6. financing activity cash outflow

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Question 5 (2.5 points)
 
Question 5 options:
XYZ Company reported cash collections from customers of $450,000 in its 2004 statement of cash flows. At January 1, 2004, accounts receivable totaled $41,000 while accounts receivable at December 31, 2004 totaled $56,000. At January 1, 2004, unearned revenue totaled $8,000 while at December 31, 2004, unearned revenue totaled $11,000.
Calculate the sales revenue reported by XYZ Company in its 2004 income statement. Do not use decimals in your answer.

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Question 6 (2.5 points)
 
Question 6 options:
The following information is available for Buckeye Company:
                  January 1, 2003       December 31, 2003
Accounts payable       $65,000               $50,000
Inventory              $74,000               $82,000
Buckeye Company reported $120,000 of cash paid to suppliers for purchases of inventory in its 2003 cash flow statement. Calculate Buckeye's cost of goods sold for 2003. Do not use decimals in your answer.

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Question 7 (2.5 points)
 
Question 7 options:
The balance sheets for ABC Company at January 1, 2007 and December 31, 2007 are presented below:

                          January 1, 2007         December 31, 2007

  ASSETS
  Cash                         35,000                     ?
  Accounts receivable          65,000                   88,000
  Inventory                      ?                      57,000
  Land                         80,000                   60,000
  Equipment                   120,000                  230,000
  Accumulated depreciation    <27,000>                 <41,000>

  LIABILITIES + EQUITY
  Accounts payable             26,000                   51,000
  Short-term notes payable     40,000                   45,000
  Income taxes payable         11,000                    5,000
  Common stock                   ?                     135,000
  Retained earnings           183,000                     ?

The following information was taken from ABC Company's 2007 statement of cash flows:

  Net cash flow from operating activities    85,000
  Net cash flow from investing activities   <75,000>
  Net cash flow from financing activities    <5,000>
  Net change in cash                          5,000

It is known that during 2007 ABC Company sold land having a cost of $20,000 for $35,000 cash. ABC Company reported a net income of $48,000 and depreciation expense of $14,000 during 2007.

Calculate the balance in the inventory account at January 1, 2007. Do not use decimals in your answer. (Hint: Use the indirect method).
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Question 8 (2.5 points)
 
Question 8 options:
The following accounts, among others, apeared on ZZ Company's balance sheet at January 1, 2005 and December 31, 2005:
                  January 1, 2005       December 31, 2005
Accounts payable       48,000                63,000
Land                   70,000                84,000
Notes payable          80,000                64,000
Common stock           30,000                90,000
Retained earnings      36,000                95,000
The following information was taken from ZZ Company's 2005 income statement:
Sales revenue                   $500,000
Cost of goods sold               280,000
Other expense                    120,000
Net income                      $100,000
Calculate the net cash flow from financing activities for 2005. If your answer is negative, place a minus sign in front of your answer with no spaces in between (e.g., -1234). Do not use decimals
in your answer.