FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 16: The Statement of Cash Flows

Show Answer

Share

---

All types

Filters

Study Flashcards

Question 91

True/False

Review LaterAdd Note

Review Later

Texas Corp.uses the indirect method to prepare the statement of cash flows.Refer to the following section of the comparative balance sheet: The change in Accounts Payable is reported as a negative cash flow in the adjustments to net income.

A) True
B) False

Correct Answer

verified

Show Answer

Question 92

Multiple Choice

Review LaterAdd Note

Review Later

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

A) It reports cash receipts and cash payments that increase or decrease long-term assets.
B) It includes cash inflows and outflows related to long-term liabilities and equity.
C) It reports on activities that create revenue or expenses for the entity's business.
D) It reports on how cash flows affect the total assets and total liabilities.

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

Correct Answer

verified

Show Answer

Question 93

Multiple Choice

Review LaterAdd Note

Which of the following is considered an operating activity on the statement of cash flows prepared using the direct method?

Arena,Inc.uses the direct method to prepare its statement of cash flows.Use the following information reported for 2019 to compute the amount of cash paid for merchandise inventory. Cost of Goods Sold,$134,000 Merchandise Inventory,beginning balance,$27,000 Merchandise Inventory,ending balance,$67,000 Accounts Payable,beginning balance,$7600 Accounts Payable,ending balance,$5000

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

Redbird Company uses the indirect method to prepare its statement of cash flows.Using the following information,complete the worksheet for the year ended December 31,2018. - Net Income for the year ended December 31,2018 was $49,000 - Depreciation expense for 2018 was $12,000 - During 2018,plant assets with a book value of $10,000 (cost $10,000 and accumulated depreciation $0)were sold for $14,000 - Plant assets were acquired for $52,000 cash - Issued common stock for $28,000 - Issued long-term notes payable for $34,000 - Repaid long-term notes payable for $40,000 - Purchased treasury stock for 3,000 - Paid dividends of $10,000 Redbird Company

Jump Company uses the direct method to prepare its statement of cash flows.Refer to the following information reported for 2019: Cost of Goods Sold,$150,000 Merchandise Inventory,beginning balance,$26,000 Merchandise Inventory,ending balance,$64,000 Accounts Payable,beginning balance,$8100 Accounts Payable,ending balance,$5000 Operating expenses,$31,000 Accrued Liabilities,beginning balance,$2500 Accrued Liabilities,ending balance,$6400 Use the direct method to compute the cash paid to suppliers.(Accrued Liabilities relate to operating expenses. )

Which of the following sections from the statement of cash flows includes the cash paid for the purchase of Treasury Stock?

The net cash provided by operating activities is calculated in the same way,whether the company uses the direct or the indirect method of preparing the statement of cash flows.

Illinois Woodworking Company is preparing its statement of cash flows using the indirect method.During the year,Illinois Woodworking sold equipment for $5990 cash.The net book value of the asset was $4970.Which of the following statements is TRUE?

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

Which of the following will be shown under the investing activities section of the statement of cash flows?

California Corp.uses the indirect method to prepare the statement of cash flows.Refer to the following section of the comparative balance sheet: The change in Accrued Liabilities is shown as a negative cash flow in the adjustments to net income.

Arizona Company plans to purchase a property to build its corporate headquarters.An investor is willing to exchange land with a market value of $500,000 for common stock.This transaction would be shown in the financing activities section of the statement of cash flows.

The operating activities section of the statement of cash flows reflects the cash flows that affect current assets and current liabilities.

Which of the following sections of the statement of cash flows is presented differently between the direct method and indirect method?

To complete the statement of cash flows,the net change in cash and its effects on the beginning cash balance must be shown.

Using the direct method,interest expense paid on a note payable is included in the operating activities section of the statement of cash flows.

Wisconsin,Inc.owed one of its creditors $350,000,but it did not have enough cash to repay the debt.Following lengthy negotiations,the parties agreed that Wisconsin,Inc.would issue 50,000 shares of common stock to settle the debt.On the statement of cash flows,this transaction is shown in the ________.

For the year ending December 31,2018,Sparks Electric expects net cash provided by operations of $328,000,net cash used by investing activities of $141,000,and net cash provided by financing activities of $50,000.Sparks plans to spend $259,000 to add a warehouse for its operations and pays $35,000 in cash dividends.What is the amount of free cash flow?