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Exam 16: Statement of Cash Flows

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Question 41

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On the basis of the following data for Larson Co. for the year ending December 31 Year 2, and the preceding year ended December 31, Year 1, prepare a statement of cash flows. Use the indirect method of reporting cash flows from operating activities. In addition to the balance sheet data, assume that:Equipment costing $125,000 was purchased for cash.Equipment costing $85,000 with accumulated depreciation of $65,000 was sold for $15,000.The stock was issued for cash.​The only entries in the retained earnings account were net income of $51,000 and cash dividends declared of $13,000.​

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Question 42

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On the basis of the details of the common stock account presented below, calculate the total amount to be recorded in the financing section of the statement of cash flows. Assume any stock issues were at par.​Indicate whether the amount results in an increase or decrease in cash.

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Question 43

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Accounts receivable from sales transactions were $51,000 at the beginning of the year and $64,000 at the end of the year. Net income reported on the income statement for the year was $105,000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows prepared by the indirect method would be

Equipment with an original cost of $75,000 and accumulated depreciation of $20,000 was sold at a loss of $7,000. As a result of this transaction, cash would

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. -Increase in accounts receivable balance

The last item on the statement of cash flows prior to the schedule of noncash investing and financing activities reports

Lamar Corporation purchased land for $150,000. Later in the year, the company sold land with a book value of $190,000 for $200,000. Show how the effects of these transactions are reported on the statement of cash flows using the indirect method.

Net income for the year was $29,500. Accounts receivable increased $2,500, and accounts payable increased $5,400. There were no other changes in noncash current assets and liabilities. Under the indirect method, the cash flow from operations is $32,400.

Cash paid for equipment would be reported on the statement of cash flows in

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

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.

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

Selected data taken from the accounting records of Laser Inc. for the current year ended December 31 are as follows:? $\begin{array} { | l | r | r | } \hline & \begin{array} { c } \text { Balance, } \\\text { December } 31\end{array} & \begin{array} { c } \text { Balance, } \\\text { January } 1\end{array} \\\hline \text { Accrued expenses payable } & \$ 5,590 & \$ 6,110 \\\hline \text { Accounts payable (merchandise creditors) } & 41,730 & 46,020 \\\hline \text { Inventories } & 77,350 & 84,110 \\\hline \text { Prepaid expenses } & 3,250 & 3,900 \\\hline\end{array}$ During the current year, the cost of merchandise sold was $448,500, and the operating expenses other than depreciation were $78,000. The direct method is used for presenting the cash flows from operating activities on the statement of cash flows. ?Required Determine the amount reported on the statement of cash flows for: (a) Cash payments for merchandise (b) Cash payments for operating expenses

The cost of merchandise sold during the year was $50,000. Merchandise inventories were $12,500 and $10,500 at the beginning and end of the year, respectively. Accounts payable were $6,000 and $5,000 at the beginning and end of the year, respectively. Using the direct method of reporting cash flows from operating activities, cash payments for merchandise total

Indicate whether each of the following would be added to or deducted from net income in determining net cash flow from operating activities by the indirect method: (a)Increase in prepaid expenses (b)Amortization of patents (c)Increase in salaries payable (d)Gain on sale of fixed assets (e)Decrease in accounts receivable (f)Increase in notes receivable due in 60 days (g)Amortization of discount on bonds payable (h)Decrease in merchandise inventory (i)Depreciation of fixed assets (j)Loss on retirement of long-term debt (k)Decrease in accounts payable (l)Increase in notes payable due in 30 days (m)Increase in income taxes payable

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 an increase of

Cash inflows and outflows are not netted in the investing or financing sections of the statement of cash flows but are separately disclosed to give the reader full information.

The income statement disclosed the following items for the current year:​​ Balances of the current assets and current liabilities accounts changed between December 31, last year, and December 31, this year, as follows:​​ Prepare the Cash flows from operating activities section of the statement of cash flows using the indirect method.

Which of the following is a noncash investing and financing activity?

Cash dividends of $45,000 were declared during the year. Cash dividends payable were $10,000 at the beginning of the year and $15,000 at the end of the year. The amount of cash for the payment of dividends during the year is