Normally, cash flows from operations will peak during which phase of the product life cycle? Norton Company reported total sales revenue of $55,000, total expenses of $45,000, and net income of $10,000 on its income statement for the year ended December 31, 2010

1. Normally, cash flows from operations will peak during which phase of the product life cycle?

Maturity

2. Norton Company reported total sales revenue of $55,000, total expenses of $45,000, and net income of $10,000 on its income statement for the year ended December 31, 2010. During 2010, accounts receivable decreased by $4,000, merchandise inventory decreased by $6,000, accounts payable increased by $2,000, and depreciation of $8,000 was recorded. Therefore, based only on this information, the net cash flow from operating activities using the indirect method for 2010 was:

$30,000

3. One rationale for the statement of cash flows is to

reconcile differences between net income and cash receipts and disbursements.

4. 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

5. The expense incurred by issuing stock options should be

added back to net income in the operating activities section.

6. 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

$731,000

7. Tinker Company reported sales revenue of $500,000 and total expenses of $450,000 (including depreciation) for the year ended December 31, 2010. During 2010, accounts receivable decreased by $5,000, merchandise inventory increased by $4,000, accounts payable increased by $6,000, and depreciation expense of $10,000 was recorded. Assuming no other data is needed and using the indirect method, the net cash inflow from operating activities for 2010 was

$67,000

8. Toro Company recognized $655,000 of cost of goods sold in 2010, in addition its implementation of a just-in-time inventory system allowed it to reduce its inventory from $325,000 at the beginning of the year to $230,000 at the end of 2010. How much cash did Toro spend for inventory in 2010?

$560,000

9. Under the indirect method of preparing the statement of cash flows, addbacks to net income include all of the following except:

asset write-downs

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

income-increasing accruals.