Question

MULTIPLE CHOICE. PLEASE ANSWER ASAP. THANK YOU!

17. Sales for the year were $588,096. Accounts receivable were $98,761 and $77,731 at the beginning and end of the year, respectively. Cash received from customers to be reported on the statement of cash flows using the direct method is

a.$630,156

b.$609,126

c.$686,857

d.$588,096

23. A building with a book value of $46,754 is sold for $59,053 cash. Using the indirect method, this transaction should be shown on the statement of cash flows as an increase of

a.$59,053 from investing activities

b.$59,053 from investing activities and a deduction from net income of $12,299

c.$46,754 from investing activities and an addition to net income of $12,299

d.$46,754 from investing activities

26. Balance sheet and income statement data indicate the following:

Bonds payable, 10% (due in two years)	$911,000
Preferred 5% stock, $100 par (no change during year)	300,000
Common stock, $50 par (no change during year)	2,003,000
Income before income tax for year	322,000
Income tax for year	77,000
Common dividends paid	100,150
Preferred dividends paid	15,000

Based on the data presented, what is the times interest earned ratio (rounded to one decimal place)?

a.3.5

b.4.5

c.6.1

d.2.5

27. Land costing $136,603 was sold for $171,572 cash. The gain on the sale was reported on the income statement as other income. On the statement of cash flows, what amount should be reported as an investing activity from the sale of land?

a.$34,969

b.$308,175

c.$171,572

d.$136,603

29. Use this information for Kellman Company to answer the question that follow.

The balance sheets at the end of each of the first two years of operations indicate the following:

Kellman Company
	Year 2	Year 1
Total current assets	$611,300	$576,400
Total investments	69,400	41,800
Total property, plant, and equipment	912,700	761,200
Total current liabilities	111,900	80,400
Total long-term liabilities	295,300	244,200
Preferred 9% stock, $100 par	88,600	88,600
Common stock, $10 par	547,200	547,200
Paid-in capital in excess of par—Common stock	65,500	65,500
Retained earnings	484,900	353,500

Using the balance sheets for Kellman Company, if net income is $104,500 and interest expense is $36,100 for Year 2, what is the return on total assets for the year (rounded to two decimal places)?

a.6.56%

b.4.60%

c.7.58%

d.9.46%

Answer 1

Answer 17.

Cash received from customers = Beginning Accounts receivable + Sales - Ending Accounts receivable
Cash received from customers = $98,761 + $588,096 - $77,731
Cash received from customers = $609,126

Answer 23.

Gain on sale of building = Cash received from sale - Book value of building
Gain on sale of building = $59,053 - $46,754
Gain on sale of building = $12,299

So, $59,053 is cash inflow from investing activities and $12,299 is deduction from net income.

Answer 26.

Interest expense = Interest rate * Bonds payable
Interest expense = 10% * $911,000
Interest expense = $91,100

Earnings before interest and income tax = Income before income tax + Interest expense
Earnings before interest and income tax = $322,000 + $91,100
Earnings before interest and income tax = $413,100

Times Interest earned ratio = Earnings before interest and income tax / Interest expense
Times Interest earned ratio = $413,100 / $91,100
Times Interest earned ratio = 4.5

Answer 27.

Proceed from sale of land reported in cash flow from investing activities is $171,572