Outback Corp

1. Outback Corp. recorded sales of $1,300,000 in 2010, in addition the company's accounts receivable balance grew from $120,000 at the beginning of 2010 to $165,000 at the end of 2010. How much cash did Outback collect from customers in 2010?

$1,255,000

2. When preparing the statement of cash flows using the indirect method, the payment of dividends would appear as

a use of cash in the financing activities
section

3. Firms with short operating cycles will experience less of a lag between the creation and delivery of their products and the collection of cash from customers because...

their cash flow from operations will not
differ much from their working capital
from operations.

4. Academic research has found that market rates of return on common stock are the most highly correlated with

net income.

5. Fizzzle Inc. sold a piece of equipment during the period for $230,000 and recorded a gain of $45,000 on the sale. How should this gain be treated when preparing the operating activities section of the statement of cash flows using the indirect method?

The gain is subtracted from net income
in the operating activities section.

6. When preparing the statement of cash flows using the indirect method, an increase in inventories would appear as

a decrease in the operating activities
section

7. Which of the following is not an expense excluded when calculating EBITDA?

administrative expense

8. When net income is high relative to operating cash flows, we describe the firm as having recorded

income-increasing accruals.

9. The financial statements for Warren Company show the following: Cost of goods sold = $725,000
   
   Beginning Balance / Ending Balance
   
   Merchandise Inventory $45,000/$56,000
   Accounts Receivable $53,000/$50,000
   Accounts Payable $37,000/$42,000
   
   Based on this information, cash paid for merchandise was

$731,000

10. Lagos Corp. recorded sales of $345,000 in 2010, in addition its accounts receivable and accounts payable balances at the beginning and end of 2010 were as follows:
    
    Jan. 1, 2010 / Dec. 31, 2010
    
    Accounts Receivable $65,000 / $90,000
    Accounts Payable $32,000 / $28,000
    
    How much cash did Lagos collect from
    customers in 2010?

$320,000