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Exam 13: Statement of Cash Flows

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Question 31

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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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Larson Co.
Statement of Cash Flows
For Y...

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Question 32

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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) B) and D)
F) B) and C)

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Question 33

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Identify the section of the statement of cash flows a-d where each of the following items would be reported. -Issuance of bond payable

The following information is available from the current period financial statements:

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

Sales reported on the income statement were $690,000.The accounts receivable balance declined $39,000 over the year.Determine the amount of cash received from customers.

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

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: 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.

On the statement of cash flows, the cash flows from operating activities section would include

Cash receipts received from the issuance of a mortgage notes payable would be classified as an

Land costing $140,000 was sold for $173,000 cash.The gain on the sale was reported on the income statement as other income.On the statement of cash flows, what amount should be reported as an investing activity from the sale of land?

Cash flows from investing activities, as part of the statement of cash flows, include payments for the acquisition of fixed assets.

Based on the following, what is free cash flow? Cash flows from operations include $2,000 for depreciation.Cash flows from investing include the purchase of a replacement asset for $100,000 and the sale of the one used in production, which is now obsolete, for $70,000.Cash flows from financing include $70,000 of borrowing.

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.

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. -exchange of land for common stock

Under the direct method of reporting cash flows from operations, the primary source of cash is cash received from customers.

The comparative balance sheet of ConnieJo Company, for December 31, Years 1 and 2 ended December 31 appears below in condensed form: Additional data for the current year are as follows: a Fully depreciated 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 $28,000. e All sales are on account. Prepare a statement of cash flows, using the direct method of reporting cash flows from operating activities.

The statement of cash flows shows the effects on cash of a company's operating, investing, and financing activities.

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% of this investment was used to replace machinery to maintain existing capacity. What is the free cash flow for Connor Designs?

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