Question

5-)Qtopia Company uses the direct method to prepare its statement of cash flows. It has reported sales revenues of $100,000 on its income statement for the year 2012. If the balance in accounts receivable has gone up by $4,000 during the year, then $4,000 will have to be added to $100,000 to calculate collections from customers. True or false

6-)Qtopia Company uses the direct method to prepare its statement of cash flows. It has reported operating expenses of $21,000 on its income statement for the year 2012. If the balance in accrued liabilities has gone up by $1,000 during the year, then $1,000 will have to be added to $21,000 as part of the process to calculate payments to suppliers for operating expenses. true or false.

7-Please refer to the following information for Petra Sales Company: • Common stock, $1.00 par, 200,000 issued, 180,000 outstanding • Paid-in capital in excess of par: $1,600,000 • Retained earnings: $2,440,000 • Treasury stock: 20,000 shares purchased at $12 per share If Petra Sales sells 10,000 shares of treasury stock at $14 per share, the company will record a gain on the sale of treasury stock of $20,000. True or false

8- Public companies are required to publish financial statements, but privately held companies are generally not required to do so.true or false

Answer 1

Solution 5:

False, If balance of accounts receivables has gone up by $4,000 then $4,000 will have to be deducted from $100,000 to calculated collections from customers.

Solution 6:

False, If the balance in accured liabilities has gone up by $1,000 during the year then $1000 have to be deducted from $21,000 as part of the process to calculated payments to supplier for operating expenses.

Solution 7:

False, if Petra sales sells 10000 share so treasury stock at $14 per share then excess of selling price over cost will be credited to "Additional Paid in Capital" account. No gain on sale of treasury stock will be recognized in income statement.

Solution 8:

True, Public companies are required to publish financial statements, but privately held companies are generally not required to do so