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Exam 13: Statement of Cash Flows

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Question 31

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If 800 shares of $40 par common stock are sold for $43,000, the $43,000 would be reported in the cash flows from financing activities section of the statement of cash flows.

A) True
B) False

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Question 32

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In preparing the statement of cash flows, the correct order of reporting cash activities is financing, operating, and investing.

A) True
B) False

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Question 33

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Accounts receivable resulting from sales to customers amounted to $40,000 and $31,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $120,000. Exclusive of the effect of other adjustments, the net cash flows from operating activities to be reported on the statement of cash flows using the indirect method is

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.

Cash dividends paid on capital stock would be reported in the statement of cash flows in

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

Norris Company declared cash dividends of $60,000 during the year. Cash dividends payable were $20,000 at the beginning of the year and $25,000 at the end of the year. The amount of cash Norris Co. used for payment of dividends during the year was

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

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.

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

Free cash flow is the measure of operating cash flow available for corporate purposes after providing sufficient fixed asset additions to maintain current productive capacity.

Free cash flow is flow cash from operations less cash used for

If accounts payable have increased during a period,

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.

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?

Which of the following would not be on the statement of cash flows?

The comparative balance sheet of Barry Company for Years 1 and 2 ended December 31 appears below in condensed form: Additional data for the current year are as follows: (a) Net income, $75,800. (b) Depreciation reported on income statement, $38,000. (c) Fully depreciated equipment costing $60,000 was scrapped, no salvage, and equipment was purchased for $150,000. (d) Bonds payable for $75,000 were retired by payment at their face amount. (e) 2,500 shares of common stock were issued at $30 for cash. (f) Cash dividends declared and paid, $40,000. (g) Investments of $100,000 were sold for $125,000. Prepare a statement of cash flows using the indirect method.

Free cash flow is cash flow from operations less cash used to purchase fixed assets to maintain productive capacity.

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

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