USA: +1(669)289-8683 
Sign in
Homework Questions
1. The following is a list of various cash payments and cash receipts:
Cash paid to suppliers and employees $400,000
Dividends paid 18,000
Interest paid 12,000
Purchase of plant assets 45,000
Interest and dividends received 17,000
Payments to settle short-term debt 29,000
Income taxes paid 23,000
Cash received from customers 601,000
Based only on the above items, net cash flows from operating activities are:
a. $138,000
b. $91,000
c. $183,000
d. $120,000
2. Where is the change in cash shown on the statement of cash flows?
a. In the top part, before the operating activities section
b. In one of the operating, investing, or financing activities sections
c. In the bottom part, following the financing activities section
d. None of the above
3. On March 1, Jumper Products (a U.S. firm) purchased manufacturing inputs from a Mexican supplier for 20,000 pesos payable on June 1. The exchange rate for pesos on March 1 was $0.17. If the exchange rate increases to $0.19 on June 1, what amount of gain or loss would be reported by Jumper related to the currency exchange?
a. $400 gain
b. $200 loss
c. $400 loss
d. $200 gain
4. Schoomer Corp. paid $200,000 to purchase 30 percent of the stock of Shape, Inc. this year. At the end of the year, Shape reported net income of $50,000 and declared and paid dividends of $20,000. If Schoomer uses the equity method to account for its investment in Shape, at what amount would the investment be reported at the end of the year?
a. $200,000
b. $209,000
c. $215,000
d. $221,000
5. During the current year, Winter Corporation purchased common shares of Summertime Development Corp. (LDC) for $200,000, received a $2,000 dividend from LDC, and saw the market value of its investment in LDC increase by $4,000 by year end. If Winter considered its investment in LDC to be securities available for sale, what amount will Winter report as investment income on its income statement this year?
a. $2,000
b. $4,000
c. $6,000
d. None of the above
ALLEN COMPANY
Comparative Balance Sheet
Dec. 31, 2012 Dec. 31, 2011
Assets
Cash $ 28,000 $13,000
Accounts receivable 18,000 14,000
Prepaid expenses 7,000 9,000
Inventory 25,000 15,000
Long-term investments -0- 18,000
Equipment 60,000 30,000
Accumulated depreciation—equipment (18,000) (14,000)
Total assets $120,000 $85,000
Liabilities and Stockholders’ Equity
Accounts payable $ 25,000 $ 7,000
Bonds payable 37,000 45,000
Common stock 40,000 23,000
Retained earnings 18,000 10,000
Total liabilities and stockholders’ equity $116,000 $85,000
Additional information:
1. Net income for the year ending December 31, 2012, was $20,000.
2. Cash dividends of $12,000 were declared and paid during the year.
3. Long-term investments that had a book value of $18,000 were sold for $16,000.
4. Sales for 2012 are $120,000.
Instructions
1. Prepare a statement of cash flows for the year ended December 31, 2012, using the indirect method
