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Exam 13: Statement of Cash Flows

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Question 31

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Sales reported on the income statement were $372,000.The accounts receivable balance declined $4,500 over the year.The amount of cash received from customers was $367,500.

A) True
B) False

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Question 32

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

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B) False

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Question 33

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Complete each of the columns on the table below,indicating in which section each item would be reported on the statement of cash flows (operating,investing,or financing),the amount that would be reported,and whether the item would create an increase or decrease in cash.For item that affect more than one section of the statement,indicate all affected.Assume the indirect method of reporting cash flows from operating activities. The first item has been completed as an example.

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

On the basis of the following data for Garrett Co.for Years 1 and 2 ended December 31,prepare a statement of cash flows using the indirect method of reporting cash flows from operating activities.Assume that equipment costing $125,000 was purchased for cash and equipment costing $85,000 with accumulated depreciation of $65,000 was sold for $15,000; that the stock was issued for cash; and that the only entries in the retained earnings account were for net income of $56,000 and cash dividends declared of $18,000.

In determining the cash flows from operating activities for the statement of cash flows by the indirect method,the depreciation expense for the period is added to the net income for the period.

Baxter Company reported a net loss of $13,000 for the year ended December 31.During the year,accounts receivable decreased by $5,000,inventory increased by $8,000,accounts payable increased by $10,000,and depreciation expense of $4,000 was recorded.During the year,operating activities

Dorman Company reported the following data: ​ ​ Prepare the cash flows from operating activities section of the statement of cash flows using the indirect method.

Cash receipts received from the issuance of a mortgage notes payable would be classified as a(n)

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.

The following information is available from the current period financial statements: ​ The net cash flow from operating activities using the indirect method is

Free cash flow is

Under the indirect method,expenses that do not affect cash are added to net income in the operating activities section of the statement of cash flows.

Identify the section of the statement of cash flows (a-d) where each of the following items would be reported. -Sale of machinery held for use by the company

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

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

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

To arrive at cash flows from operations,it is necessary to convert the income statement from an accrual basis to the cash basis of accounting.

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

Sales for the year were $600,000.Accounts receivable were $100,000 and $80,000 at the beginning and end of the year,respectively.Cash received from customers to be reported on the statement of cash flows using the direct method is