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Exam 12: Reporting Cash Flows

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Question 1

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Stormer Company reports the following amounts on its statement of cash flow: Net cash provided by operating activities was $28,000; net cash used in investing activities was $10,000 and net cash used in financing activities was $12,000. If the beginning cash balance is $5,000, what is the ending cash balance?

A) $55,000.
B) $45,000.
C) $31,000.
D) $6,000.
E) $11,000.

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E

Question 2

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Cash flow statements help users decide whether a company has enough cash to pay its debts.

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Question 3

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On a spreadsheet used to prepare the operating activities section of the statement of cash flows, depreciation expense does not require an entry in the Analysis of Changes columns because it is a noncash item.

A machine with a cost of $130,000 and accumulated depreciation of $85,000 is sold for $40,000 cash. The total amount that should be reported in the operating section of the statement of cash flow as per indirect method is:

For each of the following independent cases, use the information provided to calculate the missing cash inflow or cash outflow using the direct method.

Match each of the following items with the appropriate definitions.

Use the following information to calculate cash received from dividends:

Barclays Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available: The amount of cash paid for dividends was:

A cash equivalent must be readily convertible to a known amount of cash, and must be sufficiently close to its maturity so its market value is unaffected by interest rate changes.

The reporting of financing activities in the statement of cash flows is identical under the direct method and indirect method.

A company had net cash flows from operations of $120,000, cash flows from financing of $330,000, total cash flows of $500,000, and average total assets of $2,500,000. The cash flow on total assets ratio equals:

Conversion of preferred stock to common stock is disclosed in the financing section of the statement of cash flows.

The cash flow on total assets ratio:

Investing activities include: (a) the purchase and sale of long-term assets, (b) loaning money in return for notes receivable, and (c) the purchase and sale of short-term investments.

Cash flows from interest received on loans are reported in the statement of cash flows as part of:

The payment of cash dividends never changes the balance of retained earnings.

Depreciation expense is not reported on a statement of cash flows prepared under the direct method.

Cash receipts and cash payments are classified as operating, investing, or financing activities on the statement of cash flows.

Use the following information about the current year's operations of a company to calculate the cash paid for merchandise.

In preparing a company's statement of cash flows for the most recent year, the following information is available: Net cash flows from investing activities for the year were: