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Exam 13: Statement of Cash Flows

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Question 1

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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

A) $55,000
B) $50,000
C) $65,000
D) $60,000

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

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Question 2

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

A) True
B) False

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Question 3

Multiple Choice

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

Which of the following does not represent an outflow of cash and therefore would not be reported on the statement of cash flows as a use of cash?

For each of the following activities that may take place during the accounting period, Use the statement of cash flows prepared using the indirect method to indicate the effect on it. Choices may be selected as the answer for more than one question.

Cash paid for preferred stock dividends should be shown on the statement of cash flows under

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. -Repayment of long-term note payable

An analysis of the general ledger accounts indicates that equipment, with an original cost of $200,000 and accumulated depreciation of $170,000 on the date of sale, was sold for $20,000 during the year. Using this information, indicate the items to be reported on the statement of cash flows using the indirect method.

The comparative balance sheet of ConnieJo Company, for December 31, Years 1 and 2 ended December 31 appears below in condensed form: ​ The income statement for the current year is as follows: ​ Additional data for the current year are as follows: (a) Fully depreci ated equipment costing $\$ 39,000$ was scrapped, no salvage, and equipment was purchased for $\$ 157,000$ . (b) Bonds payable for $\$ 100,000$ were retired by payment at their face amount. (c) 5,000 shares of common stock were issued at $\$ 15$ for cash. (d) Cash dividends declared were paid $\$ 41,400$ . (e) All sales are on account. ​ Prepare a statement of cash flows, using the direct method of reporting cash flows from operating activities.

Financing activities include

In calculating cash flows from operating activities using the indirect method, a gain on the sale of equipment is

The cash flows from operating activities are reported by the direct method on the statement of cash flows. Determine the following: (a) If sales for the current year were $\$ 375,000$ and accounts receivable increased by $\$ 29,000$ during the year, what was the amount of cash received from customers? (b) If income tax expense for the current year was $\$ 39,000$ and income tax payable decreased by $\$ 21,000$ during the year, what was the amount of cash payments for income tax?

To determine cash payments for operating expenses for the statement of cash flows using the direct method, a decrease in prepaid expenses is added to operating expenses other than depreciation.

To determine cash payments for operating expenses for the statement of cash flows using the direct method, a decrease in accrued expenses is added to operating expenses other than depreciation.

Kennedy, Inc. reported the following data: $\begin{array}{|l|r|}\hline \text { Net income } & \$ 118,000 \\\hline \text { Depreciation expense } & 15,000 \\\hline \text { Loss on disposal of equipment } & (10,000) \\\hline \text { Gain on sale of building } & 20,000 \\\hline \text { Increase in accounts receivable } & 7,000 \\\hline \text { Decrease in accounts payable } & (2,000) \\\hline\end{array}$ ​ Prepare the cash flows from operating activities section of the statement of cash flows using the indirect method.

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

The following information is available from the current period financial statements: $\begin{array} { l r } \text { Net income } & \$ 165,000 \\\text { Depreciation expense } & 28,000 \\\text { Increase in accounts receivable } & 16,000 \\\text { Decrease in accounts payable } & 21,000\end{array}$ The net cash flow from operating activities using the indirect method is

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

The statement of cash flows is not useful for

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.