Q8. Which of the following is added to net income as an adjustment under the ind

Question

Q8. Which of the following is added to net income as an adjustment under the indirect method of preparing the statement of cash flows? A. Salaries payable increase B. Gain on the sale of land. C. Inventory increase. D. Accounts receivable increase Q9. Mary's Music Store reported net income of $135,000. Beginning balances in Accounts Receivable and Accounts Payable were S29,000 and S26,000, respectively. Ending balances in these accounts were $30,000 and $24,000 respectively. Assuming that all relevant information has been presented, Mary's net cash flows from operating activities would be A. $132,000 B. $134,000 C. $136,000 D. $138,000 Q10. Dividends received from an investment is classified as a(an) issued is classified as a(an) cash flow, and payin g dividends on stock cash flow on the Statement of Cash Flows A. Operating; Operating B. Operating; Financing C. Financing, Operating D. Investing; Financing

Explanation / Answer

8 Salaries payable increase is added 9 net cash flow from operating activities = 135000-(30000-29000)-(26000-24000)= 132000 10 Dividends received is operating cash flow and dividends paid is Financing cash flow

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