FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 14: Statement of Cash Flows

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 31

Multiple Choice

Review LaterAdd Note

Review Later

Which of the following represents an inflow of cash and therefore would be reported on the statement of cash flows?

A) retirement of bond payable
B) acquisition of treasury stock
C) declaration of stock dividends
D) issuance of long-term debt

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

Correct Answer

verified

Show Answer

Question 32

True/False

Review LaterAdd Note

Review Later

The manner of reporting cash flows from investing and financing activities will be different under the direct method as compared to the indirect method.

A) True
B) False

Correct Answer

verified

Show Answer

Question 33

Multiple Choice

Review LaterAdd Note

When using the spreadsheet work sheet for the statement of cash flows,indirect method,entries made on the spreadsheet are

Income tax was $175,000 for the year.Income tax payable was $30,000 and $40,000 at the beginning and end of the year,respectively.Cash payments for income tax reported on the statement of cash flows using the direct method is

Cash dividends of $50,000 were declared during the year.Cash dividends payable were $10,000 and $5,000 at the beginning and end of the year,respectively.The amount of cash for the payment of dividends during the year is

To arrive at cash flows from operations,it is necessary to convert the income statement from an accrual basis to the cash basis of accounting.

Cash paid to purchase long-term investments would be reported in the statement of cash flows in

Which of the following can be found on the statement of cash flows?

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

When using the Spreadsheet work sheet method to analyze noncash accounts,it is best to start with

If $475,000 of bonds payable are sold at 101,$475,000 would be reported in the cash flows from financing activities section of the statement of cash flows.

Using the indirect method,if land costing $85,000 was sold for $145,000,the amount reported in the financing activities section of the statement of cash flows would be $85,000.

On the statement of cash flows prepared by the indirect method,a $50,000 gain on the sale of investments would be

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

If a gain of $11,000 is realized in selling for cash office equipment having a book value of $55,000,the total amount reported in the cash flows from investing activities section of the statement of cash flows is

If land costing $145,000 was sold for $205,000,the $60,000 gain on the sale would be added to net income in the operating activities section of the statement of cash flows prepared by 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?

Cash,as the term is used for the statement of cash flows,could indicate either cash or cash equivalents.

The net income reported on the income statement for the current year was $210,000.Depreciation recorded on equipment and a building amount to $62,500 for the year.Balances of the current asset and current liabilities accounts at the beginning and end of the year are as follows: $\begin{array}{|l|r|r|}\hline &\text {End of Year} & \text { Beginning of Yea}\\\hline \text { Cash } & \$ 56,000 & \$ 59,500 \\\hline \text { Accounts receivable net } & 71,000 & 73,400 \\\hline \text { Inventories } & 140,000 & 126,500 \\\hline \text { Prepaid expenses } & 7,800 & 8,400 \\\hline \text { Accounts payable merchandise creditors } & 62,600 & 66,400 \\\hline \text { Salaries payable } & 9,000 & 8,250\\\hline \end{array}$ Required: 1. Prepare the cash flows from operating activities section of the statement of cash flows,using the indirect method. 2. If the direct method had been used,would the net cash flow from operating activities have been the same? Explain.

Complete each of the columns on the table below,indicating in which section each item would be reported on the statement of cash flows operating,investing,or financing,the amount that would be reported,and whether the item would create an increase or decrease in cash.For item that affect more than one section of the statement,indicate all affected.Assume the indirect method of reporting cash flows from operating activities. The first item has been completed as an example.