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Exam 16: Statement of Cash Flows

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Question 61

True/False

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Cash paid to acquire treasury stock should be shown on the statement of cash flows under investing activities.

A) True
B) False

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Question 62

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

A) payment of a cash dividend
B) payment of a six-month note payable
C) purchase of merchandise inventory on account
D) issuance of common stock to acquire land

E) A) and B)
F) All of the above

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Question 63

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Identify the section of the statement of cash flows (a-d) where each of the following items would be reported. -Exchange of land for note payable

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. -Payment of dividends

A building with a book value of $54,000 is sold for $63,000 cash.Using the indirect method,this transaction should be shown on the statement of cash flows as an increase of

Accounts receivable from sales to customers amounted to $40,000 and $32,000 at the beginning and end of the year,respectively.Income reported on the income statement for the year was $110,000.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

In preparing the Cash flows from operating activities section of the statement of cash flows by the indirect method,the net decrease in inventories from the beginning to the end of the period is added to net income for the period.

A 10-year bond was issued at par for $250,000 cash.This transaction should be shown on a statement of cash flows under

The direct method of preparing the operating activities section of the statement of cash flows reports major classes of cash receipts and cash payments related to the day-to-day operations of the business.

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. -Increase in accounts receivable balance

A company had net income of $252,000.Depreciation expense was $26,000.During the year,accounts receivable and inventory increased by $15,000 and $40,000,respectively.Prepaid expenses and accounts payable decreased by $2,000 and $4,000,respectively.There was also a loss on the sale of equipment of $3,000.How much was the net cash flow from operating activities on the statement of cash flows using the indirect method?

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

Cash paid to purchase long-term investments would be reported on the statement of cash flows in

The comparative balance sheets of ConnieJo Company,for Years 1 and 2 ended December 31,appear below in condensed form.​ The income statement for the current year is as follows:​ Additional data for the current year are as follows:​ Prepare a statement of cash flows using the direct method of reporting cash flows from operating activities.​

Use the information below for Washington Company to answer the following questions. ​ The following selected account balances appeared on the financial statements of Washington Company: ​ Washington Company uses the direct method to calculate net cash flow from operating activities. ​ -Cash collections from customers were

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

Accounts receivable from sales transactions were $51,000 at the beginning of the year and $64,000 at the end of the year.Net income reported on the income statement for the year was $105,000.Exclusive of the effect of other adjustments,the cash flows from operating activities to be reported on the statement of cash flows prepared by the indirect method would be

To determine cash payments for merchandise for the statement of cash flows using the direct method,a decrease in accounts payable is added to the cost of merchandise sold.

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.

Indicate whether each of the following would be added to or deducted from net income in determining net cash flow from operating activities by the indirect method: