The changes in Tempski Company”s balance sheet account balances for last year appear below:
|
Don't use plagiarized sources. Get Your Custom Essay on the changes in tempski company s balance sheet account balances for last year appear 641407 Get an essay WRITTEN FOR YOU, Plagiarism free, and by an EXPERT! | Increases |
|
| (Decreases) |
| Debit balances: |
|
| Cash | $(5,000) |
| Accounts receivable | $(7,000) |
| Inventory | $14,000 |
| Prepaid expenses | $(8,000) |
| Long term investments | $70,000 |
| Plant and equipment | $35,000 |
| Credit balances: |
|
| Accumulated depreciation | $64,000 |
| Accounts payable | $12,000 |
| Accrued liabilities | $(10,000) |
| Taxes payable | $9,000 |
| Bonds payable | $(30,000) |
| Deferred taxes | $(10,000) |
| Common stock | $20,000 |
| Retained earnings | $44,000 |
The company’s income statement for the year appears below:
| Sales | $870,000 |
| Less cost of goods sold | 360,000 |
| Gross margin | 510,000 |
| Less operating expenses | 350,000 |
| Net operating income | 160,000 |
| Less income taxes | 48,000 |
| Net income | $112,000 |
The company declared and paid $68,000 in cash dividends during the year. The company uses the direct method to determine the net cash provided by operating activities.
1. On the statement of cash flows, the sales revenue adjusted to a cash basis would be:
A) $877,000
B) $870,000
C) $863,000
D) $891,000
2. On the statement of cash flows, the cost of goods sold adjusted to a cash basis would be:
A) $358,000
B) $348,000
C) $362,000
D) $360,000
3. On the statement of cash flows, the operating expenses adjusted to a cash basis would be:
A) $288,000
B) $350,000
C) $412,000
D) $352,000
4. On the statement of cash flows, the income tax expense adjusted to a cash basis would be:
A) $48,000
B) $47,000
C) $39,000
D) $49,000
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