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Exam 16: The Statement of Cash Flows

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Question 51

True/False

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The third section presented on the statement of cash flows is the non-cash operating activities section.

A) True
B) False

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Question 52

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Which of the following sections of the statement of cash flows includes the issuance of stock and the payment of cash dividends?

A) the investing activities section
B) the financing activities section
C) the operating activities section
D) the non-cash investing and financing section

E) B) and C)
F) C) and D)

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Question 53

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When preparing the statement of cash flows using the indirect method, depreciation expense is subtracted from net income under operating activities.

Regarding the use of a spreadsheet for the preparation of the statement pf cash flows, which of the following statements is true?

Use the following information to calculate the free cash flow of Harris, Inc. Net cash provided by operating activities, $25,000 Net cash provided by financing activities, $35,000 Net cash used for planned investment in long-term assets, $12,000 Net cash used for investing activities, $20,000 Cash dividends paid, $10,000.

Cat Nap Corp. uses the indirect method to prepare the statement of cash flows. Refer to the following section of the comparative balance sheet: How will the change in Accounts Receivable be shown on the statement of cash flows?

The income statement and a partial balance sheet of Hart Alloy Company for the year ended December 31, 2017 is presented below. Prepare the operating activities section of the statement of cash flows using the direct method. Accrued Liabilities relate to miscellaneous operating expenses.

Which of the following is a cash outflow for a financing activity on the statement of cash flows?

One of the purposes of the statement of cash flows is to ________.

Which of the following describes the operating activities section of the statement of cash flows?

Skyler's Wine Company uses the direct method to prepare its statement of cash flows. Refer to the following financial statement information for the year ending December 31, 2017: Skyler's Wine Company Comparative Balance Sheet December 31, 2017 and 2016 Skyler's Wine Company Income Statement Year Ended December 31, 2017 Additional information provided by the company includes the following: Equipment costing $60,000 was purchased for cash. Equipment with a net asset value of $10,000 was sold for $16,000. During 2017, the company repaid $43,000 of long-term notes payable. During 2017, the company borrowed $34,000 on a new note payable. There were no stock retirements during the year. There were no sales of Treasury Stock during the year. Prepare a complete statement of cash flows using the direct method. Accrued Liabilities relate to other operating expenses.

Mei Company uses the direct method to prepare its statement of cash flows. Refer to the following information reported for 2017: Cost of Goods Sold, $153,000 Merchandise Inventory, beginning balance, $28,000 Merchandise Inventory, ending balance, $60,000 Accounts Payable, beginning balance, $8,100 Accounts Payable, ending balance, $5,100 Operating expenses, $27,000 Accrued Liabilities, beginning balance, $2,900 Accrued Liabilities, ending balance, $6,000 Use the direct method to compute the cash paid to suppliers. (Accrued Liabilities relate to operating expenses.)

Manning Tint, Inc. uses the indirect method to prepare its statement of cash flows. Refer to the following portion of the comparative balance sheet: Additional information provided by the company includes the following: 1. Equipment was purchased for $68,000. 2) Equipment with a cost of $36,000 and accumulated depreciation of $7,400 was sold for $50,000. What was the amount of net cash provided by (used for) investing activities?

Qtopia Electric Company uses the direct method to prepare its statement of cash flows. Qtopia has reported cost of goods sold of $85,000 on its income statement for 2017. If the balance in Accounts Payable, for merchandise inventory suppliers only, has decreased by $8,000 during the year, then $8,000 needs to be subtracted from $85,000 to calculate payments to suppliers for merchandise inventory purchases.

Which of the following sections of the statement of cash flows includes activities that increase and decrease long-term liabilities and stockholders' equity?

In preparing a statement of cash flows using the indirect method, the Depreciation Expense ________.

Rubin Installations Company uses the direct method to prepare its statement of cash flows. Rubin has reported cost of goods sold of $95,000 on its income statement for 2017. If the balance in the Merchandise Inventory account decreased by $6,000 during the year, then $6,000 needs to be added to $95,000 to calculate payments to suppliers for inventory purchases.

Companies sometimes obtain financing and do not receive cash. Although such transactions do not directly involve cash, they still must be reported in the financing section of the statement of cash flows.

The indirect and direct methods use different computations but produce the same amount of net cash flow from operating activities.

Tuesday Electric Company uses the direct method to prepare its statement of cash flows. Tuesday has reported operating expenses of $63,000 on its income statement for the year 2017. If the balance in accrued liabilities has increased by $6,000 during the year, then $6,000 needs to be added to $63,000 to calculate payments to suppliers for operating expenses.