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Exam 12: Statement of Cash Flows

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Question 21

True/False

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The statement of cash flows explains how the cash balance changed during a particular period of time.

A) True
B) False

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Question 22

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Rice Company,a retailer,has provided the following information pertaining to its recent year of operation: • Net income,$100,000 • Accounts receivable increased $9,000 • Prepaid insurance decreased $3,000 • Depreciation expense was $15,000 • Gain on sale of land,$2,000 • Wages payable decreased $7,000 • Unearned revenue increased $11,000 Using the indirect method,how much was Rice's net cash provided by operating activities?

A) $89,000.
B) $115,000.
C) $125,000.
D) $111,000.

E) All of the above
F) A) and B)

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Question 23

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DJ Company,a manufacturer,uses the indirect method for preparing its statement of cash flows.The company has provided the following information pertaining to its recent year of operation: • Cash flow from operating activities,$272,000 • Accounts payable decreased $21,000 • Prepaid assets increased $15,000 • Depreciation expense was $27,000 • Accounts receivable decreased $21,000 • Loss on sale of a depreciable asset was $16,000 • Wages payable increased $10,000 • Unearned revenue decreased $16,000 • Patent amortization expense was $10,000 How much was DJ's net income?

Free cash flow measures the sufficiency of cash flow from operating activities to cover both capital expenditures for property,plant and equipment as well as the payment of dividends.

Slipper Company sold a productive asset,a machine,for cash.It originally cost Slipper $20,000.The accumulated depreciation at the date of disposal was $15,000.A gain on the disposal of $2,000 was reported.What was the asset's selling price?

Under the indirect method,an increase in prepaid expenses is subtracted from net income,because the cash prepayments exceed the related expenses.

Cash flows associated with property,plant,and equipment acquisition and disposition are reported as cash flows from investing activities.

Which of the following transactions would be reported in the cash flow statement as a cash flow from financing activities?

Complete the following statement of cash flows using the indirect method:

During 2019,Eva's Enterprises cash paid for property,plant and equipment was $755 million and cash flow from operating activities was $5,968 million.The average property,plant,and equipment from the comparative balance sheets were $6,094 million.Eva's capital acquisitions ratio for 2019 is closest to:

Marissa Company is preparing a statement of cash flows using the indirect method for the year ended December 31,2019.The following data are available: Prepare the operating activities section of the statement of cash flows using the indirect method for the year ended December 31,2019.

While preparing a statement of cash flows,you encountered the following transaction: February 1,2019: Battle Corporation acquired a small office building in exchange for 50,000 shares of its own common stock;par value $10 per share;market value $15 per share. Should this transaction be shown on the statement of cash flows? Why or why not?

The quality of income ratio measures the portion of net income that was generated by cash flow from operating activities.

Roberts Company sold equipment for $250,000,purchased a building for $6,500,000,sold short-term investments for $280,000,repaid principal on a note payable for $2,300,000 plus $230,000 of interest,and paid cash dividends of $20,000. - What was the net cash flow from investing activities?

Flow Company has provided the following information for the year ended December 31,2019: • Cash paid for interest,$20,000 • Cash paid for dividends,$6,000 • Cash dividends received,$4,000 • Cash proceeds from bank loan,$29,000 • Cash purchase of treasury stock,$11,000 • Cash paid for equipment purchase,$27,000 • Cash received from issuance of common stock,$37,000 • Cash received from sale of land with a $32,000 book value,$25,000 • Acquisition of land costing $51,000 in exchange for preferred stock issuance • Payment of a $100,000 note payable by exchanging used machinery with a $77,000 book value and $100,000 fair value - How much was Flow's net cash flow from financing activities?

A company's 2019 income statement reported total sales revenue of $1,200,000;accounts receivable increased by $25,000 and the unearned sales revenue account decreased $15,000 during 2019.How much cash was collected from customers during 2019?

Which of the following would not be reported as a financing activities cash flow?

Brice Corporation reported the following information: Compute Brice's cash paid for operating expenses in 2019.

Which of the following is correct?

GJ Company,a manufacturer,has provided the following information pertaining to its recent year of operation: • Net income,$500,000 • Accounts payable decreased $42,000 • Prepaid assets increased $31,000 • Depreciation expense was $53,000 • Accounts receivable decreased $41,000 • Loss on sale of a depreciable asset was $31,000 • Wages payable increased $19,000 • Unearned revenue decreased $31,000 • Patent amortization expense was $5,000 Using the indirect method,how much was GJ's net cash provided by operating activities?