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Exam 13: Statement of Cash Flows

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Question 31

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An increase in accounts receivable of $1,000 over the course of a year would be shown on the company's statement of cash flows prepared under the indirect method as:

A) an addition to net income of $1,000 in order to arrive at net cash provided by operating activities.
B) a deduction from net income of $1,000 in order to arrive at net cash provided by operating activities.
C) an addition of $1,000 under financing activities.
D) a deduction of $1,000 under financing activities.

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

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Question 32

Multiple Choice

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Which of the following would be added to net income in the operating activities section of a statement of cash flows prepared using the indirect method?

A) an increase in accounts receivable.
B) an increase in prepaid expenses.
C) an increase in accrued liabilities.
D) an increase in property, plant and equipment.

E) All of the above
F) None of the above

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Question 33

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Norbury Corporation's net income last year was $34,000.The company did not sell or retire any property, plant, and equipment last year.Changes in selected balance sheet accounts for the year appear below: Based solely on this information, the net cash provided by (used in) operating activities under the indirect method on the statement of cash flows would be:

The net cash provided by (used in) financing activities last year was:

Cash received from the sale of equipment the company had used in its own operations would be considered an operating activity on a statement of cash flows.

Tani Corporation's most recent balance sheet appears below: The company's net income for the year was $18 and it did not sell or retire any property, plant, and equipment during the year.Cash dividends were $4.The net cash provided by (used in) investing activities for the year was:

Cash payments to insurers and utility providers are considered operating activities on the statement of cash flows.

Shoshoni Corporation prepares its statement of cash flows using the indirect method.Which of the following would be added to net income in the operating activities section of the statement?

Adah Corporation prepares its statement of cash flows using the indirect method.Which of the following would be subtracted from net income in the operating activities section of the statement?

The net cash provided by operating activities on the statement of cash flows does not include any dividends paid to the company's own shareholders.

Birchett Corporation's most recent balance sheet appears below: The company's net income for the year was $91 and it did not sell or retire any property, plant, and equipment during the year.Cash dividends were $22.The net cash provided by (used in) operating activities for the year was:

Which of the following is correct regarding the operating activities section of the statement of cash flows?

An increase in accrued liabilities of $1,000 during a year would be shown on the company's statement of cash flows prepared under the indirect method as:

Sonier Corporation's most recent balance sheet appears below: The net income for the year was $97.Cash dividends were $19.The company did not issue any bonds or repurchase any of its common stock during the year.The net cash provided by (used in) financing activities for the year was:

The data given below are from the accounting records of the Kuhn Corporation: Based on this information, the net cash provided by (used in) operating activities using the indirect method would be:

The Warrel Corporation reported the following data for last year: Based solely on this information, the net cash provided by (used in) financing activities on the statement of cash flows would be:

Which one of the following transactions should be classified as a financing activity on the statement of cash flows?

When a company pays cash to repurchase its own common stock, this is reported as a cash outflow in the financing activities section of the statement of cash flows.

Under the indirect method of determining the net cash provided by operating activities on the statement of cash flows, a loss on the sale of an asset would be added to net income.

Thunder Corporation's balance sheet and income statement appear below: The company did not dispose of any property, plant, and equipment, issue any bonds payable, or repurchase any of its own common stock during the year.The company declared and paid a cash dividend of $24. Required: Prepare a statement of cash flows in good form using the indirect method.