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Exam 14: Statement of Cash Flows

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Question 81

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A building with a book value of $54,000 is sold for $63,000 cash Using the indirect method, this transaction should be shown on the statement of cash flows as follows:

A) an increase of $54,000 from investing activities
B) an increase of $63,000 from investing activities and a deduction from net income of $9,000
C) an increase of $9,000 from investing activities
D) an increase of $54,000 from investing activities and an addition to net income of $9,000

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Question 82

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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 83

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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 and (b) cash payments for operating expenses.

Free cash flow is cash from operations, less cash for

A business issues 20-year bonds payable in exchange for preferred stock. This transaction would be reported on the statement of cash flows in

For each of the following, identify whether it would be disclosed as an operating , financing , or investing activity on the statement of cash flows under the indirect method.

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

Which of the following is not one of the four basic financial statements?

On the basis of the following data for Grant Co. for 2011 and the preceding year ended December 31, 2010, prepare a statement of cash flows. Use the indirect method of reporting cash flows from operating activities. Assume that equipment costing $125,000 was purchased for cash and equipment costing $85,000 with accumulated depreciation of $65,000 was sold for $15,000; that the stock was issued for cash; and that the only entries in the retained earnings account were net income of $56,000 and cash dividends declared of $18,000.

On the basis of the following data for Breach Co. for the year ended December 31, 2011 and the preceding year, prepare a statement of cash flows using the indirect method of reporting cash flows from operating activities. Assume that equipment costing $25,000 was purchased for cash and no long term assets were sold during the period. Stock was issued for cash - 3,200 shares at par. Net income for 2010 was $76,000. Cash dividends declared and paid were $13,000.

The cash flows from operating activities are reported by the direct method on the statement of cash flows. Determine the following:

Sales for the year were $600,000. Accounts receivable were $100,000 and $80,000 at the beginning and end of the year. Cash received from customers to be reported on the cash flow statement using the direct method is

Cash flows from investing activities, as part of the statement of cash flows, include receipts from the sale of land.

To determine cash payments for merchandise for the cash flow statement using the direct method, a decrease in accounts payable is added to the cost of merchandise sold.

The main disadvantage of the direct method of reporting cash flows from operating activities is that the necessary data are often costly to accumulate.

Balances of the current asset and current liability accounts at the end and beginning of the year are as follows: Use the direct method to prepare the cash flows from operating activities section of a statement of cash flows.

The board of directors declared cash dividends total $168,000 during 2014. The comparative balance sheet indicated dividends payable of $46,000 at the beginning of the year and $42,000 at the end of the year. What was the amount of cash payment to stockholders during the year?

The statement of cash flows shows the effects on cash of a company's operating, investing, and financing activities.

Under the indirect method, expenses that do not affect cash are added to net income in the operating activities section of the statement of cash flows.

Fortune Corporation's comparative balance sheet for current assets and liabilities was as follows: