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In: Accounting

To produce a cash flow income statement, the direct method calculates operating cash flows by: a.adjusting...

To produce a cash flow income statement, the direct method calculates operating cash flows by:

a.adjusting net income for noncash items.

b.adjusting each line of the income statement.

c.adjusting the income statement for changes only in current liabilities.

d.adjusting net income for changes in all the current assets.

Which of the following is an example of a cash equivalent?

a.A patent

b.A long-term investment

c.A money market fund

d.A prepaid expense

Following is the financial information of Merry Company for the year ended December 31, 20X1. Compute net cash from financing activities.

Net Income for the year $198,000
Payment of dividends 48,000
Issuance of share capital 98,000
Purchase of equipment 150,000

a.$150,000

b.$98,000

c.$52,000

d.$198,000

Consider the following information for Rhombus Company:

Cash receipts from customers $448,000
Cash paid to suppliers 228,000
Cash paid to employees 113,000
Gain on sale of equipment 51,000
Depreciation for the year 20,000
Income tax paid 80,000


Calculate cash from operating activities using the direct method.

a.$78,000

b.$36,000

c.$56,000

d.$27,000

Solutions

Expert Solution

The answer has been presented in the supporting sheet. For detailed answer refer to the supporting sheet.

ekkarill92 answered 2 years ago
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