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Exam 12: Statement of Cash Flows

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Question 101

Multiple Choice

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

A) receipts from the issuance of capital stock.
B) receipts from the sale of investments.
C) payments for the acquisition of investments.
D) cash receipts from sales activities.

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Question 102

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The cash debt coverage is computed by dividing net cash provided by operating activities by

A) average current liabilities.
B) net sales.
C) average long-term liabilities.
D) average total liabilities.

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Question 103

Multiple Choice

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The indirect and direct methods of preparing the statement of cash flows are identical except for the

Cash flow from investing activities is considered the most important category on the statement of cash flows because it is considered the best measure of expected income.

The payment of a cash dividend would be classified as a(n)

Typically a value below what amount for the current cash debt coverage ratio should be further investigated?

Each of the following is an adjustment to convert net income to net cash provided by operating activities except

Using the indirect method, if equipment is sold at a gain, the

Catalina Company reported a net loss of $10,000 for the year ended December 31, 2014. During the year, accounts receivable decreased $5,000, inventory increased $8,000, accounts payable increased by $10,000, and depreciation expense of $6,000 was recorded. During 2014, operating activities

During 2014, Ecuyer Industries reported cash provided by operations of $397,000,000, cash used in investing of $343,000,000, and cash used in financing of $95,000,000. In addition, cash spent for fixed assets during the period was $138,000,000. Average current liabilities were $325,000,000 and average total liabilities were $858,000,000. No dividends were paid. Based on this information, what was Ecuyer's cash debt coverage?

During the _______________, cash from operations and net income are approximately the same.

Selected transactions for the Hamiltion Company are listed below. 1. Collected accounts receivable. 2. Declared and paid dividends on common stock. 3. Sold long-term investments for cash. 4. Issued stock for equipment. 5. Repaid five year note payable. 6. Paid employee wages. 7. Converted bonds payable to common stock. 8. Acquired long-term investment with cash. 9. Sold buildings and equipment for cash. 10. Sold merchandise to customers. Instructions Classify each transaction as either (a) an operating activity, (b) an investing activity, (c) a financing activity, or (d) a noncash investing and financing activity.

In preparing a statement of cash flows, the issuance of debt should be reported separately from the retirement of debt.

Using the following information, which company appears to be most liquid? $\begin{array} { | l | r | r | r | r | } \hline \text { (in } \$ \text { Millions) } & \begin{array} { c } \text { Jones } \\\text { Company }\end{array} & \begin{array} { c } \text { Parksh } \\\text { Company }\end{array} & \begin{array} { c } \text { Brady } \\\text { Company }\end{array} & \begin{array} { c } \text { Chambers } \\\text { Company }\end{array} \\\hline \text { Cash provided by operating activities for } 2014 & 140 & 295 & 110 & 200 \\\hline \text { Current liabilities for } 2013 & 230 & 335 & 205 & 300 \\\hline \text { Current liabilities for } 2014 & 280 & 375 & 240 & 360 \\\hline \text { Total liabilities for } 2013 & 600 & 440 & 275 & 500 \\\hline \text { Total liabilities for } 2014 & 720 & 530 & 325 & 540 \\\hline\end{array}$

To determine the net cash provided (used) by operating activities, it is necessary to analyze

* 173. During 2014, Bronze Company had $130,000 in cash sales and $970,000 in credit sales. The accounts receivable balances were $180,000 and $212,000 at December 31, 2013 and 2014, respectively. Using the direct method of reporting cash flows from operating activities, what was the total cash collected from all customers during 2014?

Cash from investing becomes positive and cash from financing becomes more negative during the

Significant noncash transactions would not include

Vangaurd Company purchased treasury stock with a cost of $55,000 during 2014. During the year, the company paid dividends of $20,000 and issued bonds payable for proceeds of $836,000. Cash flows from financing activities for 2014 total

Tito Company reports a $20,000 increase in inventory and a $5,000 decrease in accounts payable during the year. Cost of Goods Sold for the year was $182,000. Using the direct method of reporting cash flows from operating activities, cash payments made to suppliers were