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Exam 15: Statement of Cash Flows

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Question 41

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The net income reported on the income statement for the current year was $635,000.Depreciation recorded on plant assets was $29,000.Accounts receivable and inventories increased by $1,200 and $3,600,respectively.Prepaid expenses and accounts payable decreased by $800 and $16,000 respectively.How much cash was provided by operating activities?

A) $642,400
B) $644,000
C) $652,000
D) $685,600

E) C) and D)
F) A) and C)

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Question 42

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The net income reported on the income statement for the current year was $79,000.Depreciation was $6,000.Account receivable and inventories decreased by $1,100 and $2,700,respectively.Prepaid expenses and accounts payable increased,respectively,by $950 and $3,000.How much cash was provided by operating activities?

A) $86,750
B) $90,850
C) $85,150
D) $83,250

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

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Question 43

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If accounts receivable have increased during the period,

Using the indirect method,patent amortization expense for the period

Highly liquid investments such as Treasury bills,money market funds,and commercial paper are examples of ___________________.

In developing the cash flows from operating activities,most companies in the United States

The issuance of common stock in exchange for a building would appear both as a cash inflow in the financing activities section of the cash flow statement and also as a cash outflow in the investing activities section.

Total operating expenses on Legg Company's income statement for last year totaled $260,000.During the year the accrued liabilities decreased by $12,000,and prepaid expenses increased by $18,000.Depreciation expense for the year was $25,000.Based on this information,operating expenses adjusted to cash basis under the direct method on the statement of cash flows would be

Starting with net income and adjusting it for items that affected reported net income but which did not affect cash is called the

The following items were reported on the balance sheets and income statements of Marshall Company: How would the change in accounts payable be reported in the operating activities section of the statement of cash flows under the indirect method?

The format that should be followed in preparing the statement of cash flows is known as the ______________.

Income statements are prepared on a (n)______________.

Cash flows from operating activities can be calculated using the indirect or direct method.Briefly describe how the two methods differ yet arrive at the same information about the net cash flows from operating activities.

Which one of the following items is not necessary in preparing a statement of cash flows?

The decision whether to use the direct or indirect method on the statement of cash flows is relevant with respect to

The following events occurred last year at Taylor Company: Based on the above information,the net cash flows from investing activities for the year on the statement of cash flows would be

Which one of the following affects cash during a period?

The indirect method and the direct method differ only on how the cash flows from ________________ are calculated.

Figure 15-2. Chandler Company's net income last year was $98,000 and cash dividends declared and paid to the company stockholders was $13,000.Changes in selected balance sheet accounts for the year appear below: Refer to Figure 15-2.The net cash flows from financing activities to be reported in a statement of cash flows is

An advantage to using a worksheet to organize the information of preparation of the statement of cash flows is that it uses a spreadsheet format allowing the preparer to use a PC and spreadsheet software.