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Practice final BBUS3211_SW2_PE_10JUL12

Gatheredthefollowingdata

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Unformatted text preview: ase $20,000. 3. In preparing its cash flow statement for the year ended December 31, 2011, Red Co. gathered the following data: In its December 31, 2011, statement of cash flows, what amount should Red report as net cash outflows from investing activities? a. $340,000 b. $352,000 c. $376,000 d. $388,000 TRU Open Learning BBUS 3211 • PRACTICE EXAMINATION 4. 3 of 13 Lundholm Company purchased a machine for $100,000 on January 1, 2009. Lundholm depreciates machines of this type by the straight‐line method over a ten‐year period using no salvage value. Due to a change in sales patterns, on January 1, 2011, management determines the useful life of the machine to be a total of six years. What amount should Lundholm record for depreciation expense for 2011? The tax rate is 40%. a. $20,000 b. $16,000 c. $17,778 d. $26,667 5. An item that should be reported as a prior period adjustment is the: a. Correction of an error in depreciation from last year. b. Payment of taxes due to a tax audit of last year’s tax return. c. Collection of a previously written off ba...
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