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Exam 16: Statement of Cash Flows

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Question 31

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

A) cash
B) net income
C) retained earnings
D) revenue

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

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Question 32

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Rarely will the cash flows from operating activities, as reported on the statement of cash flows, be the same as the net income reported on the income statement.

A) True
B) False

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Question 33

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A company purchases equipment for $32,000 cash. This transaction should be shown on the statement of cash flows under

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

Use the information below for Washington Company to answer the following questions. ​ The following selected account balances appeared on the financial statements of Washington Company: ​ Washington Company uses the direct method to calculate net cash flow from operating activities. ​ -Cash collections from customers were

For each of the following activities that may take place during the accounting period, indicate the effect (a-g) on the statement of cash flows prepared using the indirect method. Choices may be selected as the answer for more than one question. -Amortization of intangible assets

Repayments of bonds would be shown as a cash outflow in the investing section of the statement of cash flows.

Purchasing equipment by issuing a six-month note should be shown on the statement of cash flows under the investing activities section.

Identify the section of the statement of cash flows (a-d) where each of the following items would be reported. -Amortization of patent

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

The statement of cash flows is not one of the basic financial statements.

Cash outflows from financing activities include the payment of cash dividends, the acquisition of treasury stock, and the repayment of amounts borrowed.

The board of directors of Kendall Co. declared cash dividends totaling $390,000 during the current year. The comparative balance sheet indicates dividends payable of $58,000 at the beginning of the year and $73,000 at the end of the year. What was the amount of cash payments Kendall Co. made to stockholders during the year?

Identify the section of the statement of cash flows (a-d) where each of the following items would be reported. -Increase in income taxes payable

Cost of merchandise sold reported on the income statement was $155,000. The accounts payable balance increased $8,000, and the inventory balance increased by $21,000 over the year. Determine the amount of cash paid for merchandise.

Connor Designs Company has cash flows for operating activities of $425,000. Cash flows used for investments in property, plant, and equipment totaled $65,000, of which 70% was used to replace machinery to maintain existing capacity.?What is the free cash flow for Connor Designs?

A cash flow per share amount should be reported on the statement of cash flows.

There is no difference in the investing and financing sections of the statement of cash flows using the indirect and direct methods.

The net income reported on the income statement for the current year was $58,000. Depreciation recorded on fixed assets for the year was $24,000. In addition, equipment with an original cost of $130,000 and accumulated depreciation of $115,000 on the date of the sale was sold for $20,000. Balances of the current asset and current liability accounts at the end and beginning of the year are listed below. Prepare the Cash flows from operating activities section of a statement of cash flows using the indirect method. $\begin{array} { l r r } & \text { End } & \text { Beginning } \\\text { Cash } & \$ 65,000 & \$ 70,000 \\\text { Accounts Receivable (net) } & 70,000 & 63,000 \\\text { Inventories } & 85,000 & 102,000 \\\text { Prepaid Expenses } & 4,000 & 4,500 \\\text { Accounts Payable (merchandise creditors) } & 50,000 & 58,000 \\\text { Cash Dividends Payable } & 4,500 & 6,500 \\\text { Sal aries Payable } & 6,000 & 7,500\end{array}$

The board of directors declared cash dividends totaling $168,000 during the year. 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 payments to stockholders during the year?