FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 12: Statement of Cash Flows

Show Answer

Share

---

All types

Filters

Study Flashcards

Question 41

Multiple Choice

Review LaterAdd Note

Review Later

Grace Company sold equipment for $40,000 cash.The equipment has cost $70,000 and had accumulated depreciation of $44,000 at the time of the sale.Based on this information alone,which of the following statements is true?

A) Cash flow from investing activities would be less if the sale of equipment is reported on the statement of cash flows under the direct method than if it is reported under the indirect method.
B) Cash flow from investing activities would be greater if the sale of equipment is reported on the statement of cash flows under the direct method than if it is reported under the indirect method.
C) Cash flow from investing activities would be the same regardless of whether the sale of equipment is reported on the statement of cash flows under the direct method or the indirect method.
D) The answer cannot be determined because the amount of the salvage value is unknown.

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

Correct Answer

verified

Show Answer

Question 42

Multiple Choice

Review LaterAdd Note

Review Later

Which of the following would not be reported in the body of the statement of cash flows?

A) The payment of a cash dividend
B) The issuance of preferred stock for cash
C) The purchase and retirement of treasury stock
D) A 2-for-1 stock split

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

Correct Answer

verified

Show Answer

Question 43

True/False

Review LaterAdd Note

The three main sections of the statement of cash flows are,in order,operating activities,investing activities,and financing activities.

Oglethorpe Corporation reported a beginning balance of $12,400 in its Prepaid Insurance account.During the year,Oglethorpe paid a total of $42,000 to purchase insurance,and the Prepaid Insurance account had an ending balance of $13,100.What was the amount of insurance expense for the year?

Which of the following would not be presented in the financing section of the statement of cash flows?

The direct method of preparing the operating activities section of the statement of cash flows is preferred by the Financial Accounting Standards Board.

[The following information applies to the questions displayed below.] During Year 1, El Paso Company had the following changes in account balances: . The Accumulated Depreciation account had a beginning balance of $25,000 and an ending balance of $35,000. The increase was due to depreciation expense. . The Long-Term Notes Payable account had a beginning balance of $40,000 and an ending balance of $15,000. The decrease was due to repayment of debt. . The Equipment Account had a beginning balance of $25,000 and an ending balance of $92,500. The increase was due to the purchase of other operational assets. . The Long-Term Investments Account (Marketable Securities) had a beginning balance of $18,000 and an ending balance of $12,500. The decrease was due to the sale of investments at cost. . The Dividends Payable account had a beginning balance of $12,000 and an ending balance of $10,000. There were $20,000 of dividends declared during the period. . The Interest Payable account had a beginning balance of $2,250 and an ending balance of $1,250. The difference was due to the payment of interest. -What is the net cash flow from financing activities?

Baird Company reported depreciation expense of $10,000 and net income of $16,000 on its Year 2 income statement.During Year 2,the company's accounts receivable balance decreased by $4,000.Based on this information alone,what was the amount of cash flow from operating activities?

In preparing the operating activities section of the statement of cash flows by the indirect method,gains are added to net income.

On January 1,Year 1,Chisolm Company purchased equipment for $36,000 cash.On December 31,Year 1,depreciation of $9,000 was recorded.Which of the following correctly shows the combined effect of these two events on the income statement and statement of cash flows? Chisolm uses the direct method. Cash Flows Net Income Operating Investing Financing

The indirect method for preparing the operating activities section of the statement of cash flows begins with the amount of sales revenue reported on the income statement.

When using the indirect method to complete the cash flows from operating activities section of the statement of cash flows,what is the proper disposition of depreciation expense?

Jones Company requires prepayment from all customers.Jones Company reported revenue of $258,000 on its Year 1 income statement.The balance in its Unearned Revenue account was $12,000 at the start of Year 1 and $4,000 at the end of the year.Based on this information alone,the amount of cash that Jones collected from customers for Year 1 was $250,000.

[The following information applies to the questions displayed below.] On August 1, Year 1, Jackson Company issued a one-year $80,000 face value interest-bearing note with a stated interest rate of 9% to Galaxy Bank. Jackson accrues interest expense on December 31, Year 1, its calendar year-end. -What is the amount of interest expense and the total cash outflow related to the note during the year ending December 31,Year 2? Interest Expense $\quad$$\quad$$\quad$ Cash Outflow

Ervin Company began the accounting period with $64,000 in accounts receivable.The ending balance in accounts receivable was $40,000.If the credit sales during the period were $588,000,what is the amount of cash received from customers?

What effect does the following journal entry have on the amount of cash generated by operating activities? $\begin{array}{|l|l|l|}\hline \text { Interest receivable}&150 \\\hline \text { Interest revenue}& &150\\\hline \end{array}$

Rapid growth of a company can cause it to be short of cash.

How are cash receipts from interest on a note receivable classified on a statement of cash flows prepared using the direct method?

Which of the following transactions would be disclosed on a schedule of noncash investing and financing activities?

Hilliard Company,a small consulting firm,charges all of its operating expenses on Accounts Payable.On January 1,Year 2,Hilliard's Accounts Payable balance was $24,000 and,during Year 2,an additional $216,000 of operating expenses were charged on account.On December 31,Year 2,the Accounts Payable balance was $72,000.What is the amount of cash paid for expenses during Year 2?