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Exam 13: Statement of Cash Flows

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Question 41

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Which of the following would not be found in a schedule of noncash investing and financing activities, reported at the end of a statement of cash flows?

A) equipment acquired in exchange for a note payable
B) bonds payable exchanged for capital stock
C) purchase of treasury stock
D) capital stock issued to acquire fixed assets

E) B) and D)
F) None of the above

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Question 42

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On the statement of cash flows, a $7,500 gain on the sale of fixed assets would be

A) added to net income in converting the net income reported on the income statement to cash flows from operating activities
B) deducted from net income in converting the net income reported on the income statement to cash flows from operating activities
C) added to dividends declared in converting the dividends declared to the cash flows from financing activities related to dividends
D) deducted from dividends declared in converting the dividends declared to the cash flows from financing activities related to dividends

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

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Question 43

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Sales reported on the income statement were $690,000.  The accounts receivable balance declined $39,000 over the year.  Determine the amount of cash received from customers.

The direct method of preparing the operating activities section of the statement of cash flows reports major classes of cash receipts and cash payments related to the day-to-day operations of the business.

Indicate the section (operating activities, investing activities, financing activities, or none) in which each of the following would be reported on the statement of cash flows prepared by the indirect method: (a) Gain on sale of fixed assets (b) Net income (c) Retirement of long-term debt (d) Sale of capital stock (e) Distribution of stock dividends (f) Payment of cash dividends (g) Purchase of fixed assets (h) Sale of fixed assets (i) Receipt of interest revenue (j) Payment of interest expense

Accounts receivable from sales transactions were $51,000 at the beginning of the year and $64,000 at the end of the year.  Net income reported on the income statement for the year was $105,000.  Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows prepared by the indirect method is

The order of presentation of activities on the statement of cash flows is

A corporation uses the indirect method for preparing the statement of cash flows. A fixed asset has been sold for $25,000 representing a gain of $4,500.  The value in the operating activities section regarding this event would be

Cash flows from investing activities, as part of the statement of cash flows, include payments for the acquisition of fixed assets.

The comparative balance sheet of ConnieJo Company, for December 31, Years 1 and 2 ended December 31 appears below in condensed form: Additional data for the current year are as follows: (a) Fully depreciated equipment costing $39,000 was scrapped, no salvage, and equipment was purchased for $157,000. (b) Bonds payable for $100,000 were retired by payment at their face amount. (c) 5,000 shares of common stock were issued at $15 for cash. (d) Cash dividends declared were paid $28,000. (e) All sales are on account. Prepare a statement of cash flows, using the direct method of reporting cash flows from operating activities.

The statement of cash flows reports a firm's major sources of cash receipts and major uses of cash for a period of time.

A company had net income of $252,000. Depreciation expense is $26,000.  During the year, accounts receivable and inventory increased by $15,000 and $40,000, respectively. Prepaid expenses and accounts payable decreased by $2,000 and $4,000, respectively. There was also a loss on the sale of equipment of $3,000.  How much was the net cash flow from operating activities on the statement of cash flows using the indirect method?

On the statement of cash flows, the cash flows from operating activities section would include

Selected data for the current year ended December 31 are as follows: During the current year, the cost of merchandise sold was $620,000 and the operating expenses other than depreciation were $142,000.  The direct method is used for presenting the cash flows from operating activities on the statement of cash flows. Determine the amount reported on the statement of cash flows for: (a) cash payments for merchandise (b) cash payments for operating expenses

Which of the following types of transactions would be reported as a cash flow from investing activity on the statement of cash flows?

State the section(s) of the statement of cash flows prepared by the indirect method (operating activities, investing activities, financing activities, or not reported) and the amount that would be reported for each of the following transactions: (a) Received $120,000 from the sale of land costing $70,000 (b) Purchased investments for $75,000 (c) Declared $35,000 cash dividends on stock. $5,000 dividends were payable at the beginning of the year, and $6,000 were payable at the end of the year (d) Acquired equipment for $64,000 cash (e) Declared and issued 100 shares of $20 par common stock as a stock dividend, when the market price of the stock was $32 a share (f) Recognized depreciation for the year, $37,000 (g) Issued 85,000 shares of $10 par common stock for $25 a share, receiving cash (h) Issued $500,000 of 20-year, 10% bonds payable at 99 (i) Borrowed $43,000 from Regional Bank, issuing a 5-year, 8% note for that amount

Which of the following should be added to net income in calculating net cash flow from operating activities using the indirect method?

Land costing $71,000 was sold for $50,000 cash.  The loss on the sale was reported on the income statement as other expense.  On the statement of cash flows, what amount should be reported as an investing activity from the sale of land?

When using the spreadsheet (work sheet) method to analyzing noncash accounts, no order of analysis is required, but it is more efficient to start with Retained Earnings and proceed upward in the account listing.

In calculating cash flows from operating activities using the indirect method, a gain on the sale of equipment is