Jodi Lein, small business consultant, is currently working with RJ Landscaping, a sole proprietorship. She is trying to educate the owner on the importance of monitoring cash flows. Operating information as of the end of the most recent month appears below: Cash from sale of truck of $ 7000. Cash salaries paid of $17000. Cash from customers of $ 45000. Depreciation expense of $ 5500. Interest on bank line of credit of $1000. Cash paid to suppliers of $ 22000. Other cash expenses, including rent, of $ 6300. No taxes due. Using this information, Lein calculates the cash flow from operations for the month at:
A. $ 1300.
B. $11200.
C. $300.
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Juniper Corp. has the following transactions in 2005. Juniper’ s equipment with a book value of $ 55000 was sold for $ 85000 cash. A parcel of land was purchased for $100000 worth of Juniper common stock. ABC company paid Juniper preferred dividends of $ 40000. Juniper declared and paid a $100000 cash dividend. Using the indirect method, what is cash flow from financing (CFF) for Juniper for 2005
A. $ 60000.
B. $100000.
C. $15000.
According to U.S. Generally Accepted Accounting Principles (GAAP) and International Accounting Standards (IAS) GAAP, should dividends paid be treated as a cash flow from financing (CFF) or as a cash flow from operations (CFO) U.S. GAAP IAS GAAP ①A. CFO CFF ②B. CFF CFO ③C. CFF CFF or CFO
A. ①
B. ②
C. ③
The correct set of cash flow treatments as they relate to interest paid according to U. S. generally accepted accounting principles (GAAP) and International Accounting Standards (IAS) GAAP is : U.S. GAAP IAS GAAP ①A. CFO CFO or CFF ②B. CFF CFF ③C. CFO CFO
A. ①
B. ②
C. ③
At the beginning of 2007, Bryan’ s Bakery Company purchased a secret cookie recipe for $ 25000. In addition, Bryan developed a new cake recipe at a cost of $ 5000. Bryan expects to use both recipes indefinitely ; however, the useful (economic) life of similar recipes has been 10 years. Assuming straight-line amortization, what amount of recipe expense should Bryan report for the year ended 2007 and what amount should Bryan report as a tangible asset on its balance sheet at the end of 2007 Recipe expense Balance sheet ①A. $ 7500 $ 22500 ②B. $ 3000 $ 27500 ③C. $ 7500 $ 0
A. ①
B. ②
C. ③