Question

3. St. Pierre Enterprises reported the following information in its financial statements:   Amounts are as of or for the year ended    Prior Year Current Year Inventory $ 55,000   $ 80,000   Accounts Receivable   68,000     103,000   Accounts Payable   34,500     40,000   Sales Revenue   305,000     375,000   Cost of Goods Sold   203,000     250,000   What is the amount of cash collected from customers during the current year?

A. $350000 B. $380500 C. $340000 D. $410000

7. During the current year, Kelso Construction had $976,000 in cash sales and $3,552,000 in credit sales. The Accounts Receivable balance was $848,000 at the beginning of the year and $680,000 at the end of the year. What was the total cash collected from customers during the year?

A. $4696000 B. $4528000 C. $3720000 D. $4360000

9. ASSUME THAT THE DIRECT METHOD IS USED TO PREPARE THE OPERATING ACTIVITIES SECTION OF THE STATEMENT OF CASH FLOWS. WHICH RELATED BALANCE SHEET ACCOUNT WILL EXPLAIN THE DIFFERENCE BETWEEN REVENUES ON THE INCOME STATEMENT AND CASH COLLECTED FROM CUSTOMERS

A. ACCOUNTS PAYABLE B. INVENTORY C. COST OF GOODS SOLD D. ACCOUNTS RECIEVABLE

11. which phrase below best describes the direct method for reporting operating cash flows?

A. A method that incorporates financing and investing activities into cash flows from operations

B. A method employing accrual based accounting to convert cash flows to GAAP net income

C. A series of adjustments to net income to arrive at operating cash flows

D. A summary of operating transactions resulting in either a debit or credit to cash

13. which of the following would be reported on the statement of cash flows, using the direct method, as a cash flow from operating activities
A. Purchase of a building B. Payment of income taxes C. Payment of cash dividends D. Purchase of treasury stock

Answer 1

3
Accounts Receivable, beginning balance	68000
Add: Sales Revenue	375000
Less: Accounts Receivable, ending balance	-103000
Amount of cash collected from customers	340000
Option C is correct
7
Accounts Receivable, beginning balance	848000
Add: Sales Revenue	3552000
Less: Accounts Receivable, ending balance	-680000
Amount of cash collected from credit sales	3720000
Add: Cash sales	976000
Total cash collected from customers	4696000
Option A is correct
9
Accounts Receivable will explain the differnce between revenues and cash collected
Option D is correct
11
A summary of operating transactions resulting in either a debit or credit to cash
Option D is correct
12
Payment of income taxes would be reported as a cash flow from operating activities
Option B is correct