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Exam 13: Statement of Cash Flows

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Question 61

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

A) an increase in inventory
B) a decrease in accounts payable
C) preferred dividends declared and paid
D) a decrease in accounts receivable

E) B) and C)
F) None of the above

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Question 62

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

A) receipts from the sale of investments
B) payments for the acquisition of investments
C) receipts from a note receivable
D) receipts from the issuance of capital stock

E) C) and D)
F) None of the above

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Question 63

Multiple Choice

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The statement of cash flows is not useful for

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.

The net income reported on the income statement for the current year was $250,000.Depreciation recorded on fixed assets and amortization of patents for the year were $40,000,and $9,000,respectively.Balances of current asset and current liability accounts at the end and at the beginning of the year are as follows: ​ What is the amount of cash flows from operating activities reported on the statement of cash flows prepared by the indirect method?

Identify the section of the statement of cash flows (a-d) where each of the following items would be reported. -Dividends received on investment

Fortune Corporation's comparative balance sheet for current assets and liabilities was as follows: ​ Adjust Year 2 net income of $65,000 for changes in operating assets and liabilities to arrive at cash flows from operating activities using the indirect method.

Indicate the section (operating activities,investing activities,financing activities,or none)in which each of the following would be reported on the statement of cash flows prepared by the indirect method:

Samuel Company's accumulated depreciation-equipment increased by $6,000,while patents decreased by $2,200 between balance sheet dates.There were no purchases or sales of depreciable or intangible assets during the year.In addition,the income statement showed a loss of $3,200 from the sale of investments.Assume no changes in noncash current assets and liabilities. ​ Reconcile a net income of $92,000 to net cash flow from operating activities.

Which of the following is not one of the four basic financial statements?

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

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

Which of the following would not be found in a schedule of noncash investing and financing activities,reported at the end of a statement of cash flows?

Cost of goods sold reported on the income statement was $155,000.The accounts payable balance increased $8,000,and the inventory balance increased by $21,000 over the year.Determine the amount of cash paid for merchandise.

The main disadvantage of the direct method of reporting cash flows from operating activities is that the necessary data are often costly to accumulate.

Cash payments for merchandise were

Cash flows from investing activities,as part of the statement of cash flows,would include any receipts from the issuance of bonds payable.

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

The acquisition of land in exchange for common stock is an example of noncash investing and financing activity.

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