Table 3-3 Marlett Company Financial Information December ...

[Mimi]

Table 3-3
 
  Marlett Company
  Financial Information
  December 2009 December 2010
  Net Income 2,000 4,000
  Accounts receivable 750 1,250
  Accumulated depreciation 1,000 1,400
  Common stock 4,500 5500
  Paid-in capital 7,500 8500
  Retained earnings 1,500 3,500
  Accounts payable 750 950
  Based on the information in Table 3-3, prepare a statement of cash flows for 2010. Assume that there were no
  changes in any other asset or liability accounts, and that the ending cash balance for 2009 was 100.

Question 2

Which of the following statements is true concerning the ISO employment-related practices liability form?
 
  A) Coverage is provided without a co-payment provision.
  B) Legal defense costs are included as part of the policy limit.
  C) Wrongful termination is excluded from coverage.
  D) Liability to employees is excluded from coverage.

[sylvia]

Answer to Question 1

Marlett Company
Statement of Cash Flows
For the Year Ended Dec. 31, 2008
Operating Activities
Net Income 4,000
Depreciation Expense 400
Increase in Accounts Receivable (500 )
Increase in Accounts Payable 200
Cash Flow from Operations 4,100
Investing Activities
Cash Flow from Investing Activities 0
Financing Activities
Increase in Common Stock 1,000
Increase in Paid-in-Capital 1,000
Dividends Paid (2,000 )
Cash Flow from Financing Activities 0
Change in Cash 4,100
Beginning Cash Balance 100
Ending Cash Balance 4,200

Answer to Question 2

Answer: B