Question

Question 65

Using the indirect method, calculate the amount of cash flows provided (used) by operating activities from the following data (in dollars): Net income 392,000; Beginning accounts receivable 54,000; Ending accounts receivable 43,000; Beginning prepaid expenses 8,000; Ending prepaid expenses 2,000; Beginning accounts payable 27,000; Ending accounts payable 17,000; Depreciation expense 46,000; Gain on disposal of equipment 5,000; Cash dividends of 38,000 were declared and paid to shareholders. If the amount represents cash flow used, enter the amount with a - sign e.g. -15000.

$_____

Question 57

On the adjusted trial balance of Orlando Corporation as at January 31, 2018, the following are some of the account balances (all normal balances): Supplies $740, Prepaid Insurance $1,620, Unearned Revenue $680, Salaries Payable $1,190, Supplies Expense $950, Service Revenue $2,030, Insurance Expense $540, Salaries Expense $1,740. Orlando's year-end is December 31 and its adjusting journal entries are recorded monthly. If $2,570 of salaries was paid in January, what was the balance in Salaries Payable at December 31, 2017?

$___

Question 52

Wrong Corp. receives a $7,000, 6-month, 4% note from Right Corp. in settlement of a past-due account receivable. What entry will Wrong Corp. make upon receiving the note?

Notes Receivable 7,140         Accounts Receivable. 7,140

Notes Receivable 7,000        Accounts Receivable. 7,000

Notes Receivable 7,000 Interest Receivable 140        Accounts Receivable. 7,000        Interest Revenue 140

Notes Receivable 7,140        Accounts Receivable. 7,000        Interest Revenue 140

Question 39

The collection of an account that had been previously written off under the allowance method for uncollectible accounts

increases net income in the period of collection.

involves a credit to Bad Debts Expense.

is recorded by debiting Cash and crediting Bad Debts Expense.

will usually require two journal entries.

Answer 1

1:- Calcutation of cash provided/(used) from Operating activities

Net Income	$392000
Adjustment non cash and no Operating transactions
Depreciation	$46000
Decrease in account receivables ($54000 - $43000)	$11000
Decrease in Prepaid expense ( $8000 - $2000)	$6000
Decrease in accounts payable ( $27000 - $17000)	-$10000
Gain on disposal of equipment	-$5000
Cash dividend declared and paid	$38000
Cash provided from Operating activities	$478000

2:- Balance was Salaries payable on December 31, 2017 = Salaries paid in January - Salaries expenses for January 2018

= $2570 - $1740 =$830

3:- Option (b) is correct.

4:-All options are correct except " Debiting cash, Crediting bad debt expseses"

Journal Entry Required

Accounts and explantions	Debit	Credit
Account receivables	xxxx
Allowance for Doubtful account		Xxxx
Bad debts expenses recovered
Cash	xxxx
Accounts receivables		xxxx
Recovered Amount received from customer