Homework SourseMULTIPLE CHOICE PLEASE ANSWER ASAP THANK YOU 17 Sales for th
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:
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:
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%
| 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 |
Solution
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
