Unformatted text preview: are true. 4 If depreciation taken during 2009 was $2,000 and the original cost of the asset was $14,000 when it was purchased on October 1,
2007, which of the following is true?
a The net amount of the equipment at December 31, 2009 was $8,500.
b The amount directly to the right of the equipment account on the balance sheet is $9,500.
c The investing cash flows are reduced by $2,000 in 2009.
d The operating cash flows are reduced by $2,000 in 2009.
e None of the above are true. 5 The Practical Company had an ending accounts receivable balance of $14,000 at December 31, 2009. During 2009 the company had
revenue of $124,000, and total cash received of $120,000. Practical also had an ending balance in unearned revenue of $2,000,
and no beginning balance in unearned revenue. What was Practical's beginning balance in accounts receivable?
e None of the above 6 Which of the following is the correct classification on the statement of cash flows?
a Financing activities include cash flows for stock issuances, dividends paid, notes borrowed from banks, and notes and interest
repaid to banks.
b Investing activities include cash flows from the purchase and sale of land, buildings, and equipment, and the depreciation taken on
buildings and equipment.
c Operating activities include cash inflows and outflows from operating activities as well as cash paid out for interest paid.
d Operating activities include cash inflows and outflows from operating activities as well as cash paid out for depreciation.
e Investing activities include cash outflows from the purchase of land, buildings, and equipment as well as the gain or loss on the sale
of any of these assets. 7 Bloocher Company pays its employees each Friday a total of $10,000 for work done during the week. Since the company is preparing
monthly financial statements and the month ends on Tuesday, $4,000 of salary expense will have been earned by the employees but
not yet paid by the company at the end of the month. Which of the following correctly...
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