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Exam 13: Statement of Cash Flows

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Question 41

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A corporation uses the indirect method for preparing the Statement of Cash Flows. A fixed asset has been sold for $25,000 representing a gain of $4,500. The value in the operating activities section regarding this event would be:

A) $25,000
B) ($4,500)
C) $29,500
D) $4,500

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

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Question 42

Multiple Choice

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

A) the cash flows from operating activities section
B) the cash flows from financing activities section
C) the cash flows from investing activities section
D) a separate schedule

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

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Question 43

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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.

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

The current period statement of cash flows includes the flowing: The cash balance at the end of the period is

Cash flows from operating activities, as part of the statement of cash flows, include cash transactions that enter into the determination of net income.

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

Selected data for the current year ended December 31 are as follows:

On the basis of the following data for Breach Co. for the year ended December 31, 2011 and the preceding year, prepare a statement of cash flows using the indirect method of reporting cash flows from operating activities. Assume that equipment costing $25,000 was purchased for cash and no long term assets were sold during the period. Stock was issued for cash - 3,200 shares at par. Net income for 2010 was $76,000. Cash dividends declared and paid were $13,000.

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

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

A cash flow per share amount should be reported on the statement of cash flows.

There are two alternatives to reporting cash flows from operating activities in the statement of cash flows: (1) the direct method and (2) the indirect method.

The net income reported on an income statement for the current year was $58,000. Depreciation recorded on fixed assets for the year was $24,000. In addition, equipment with an original cost of $130,000 and accumulated depreciation of $115,000 on the date of the sale, was sold for $20,000. Balances of the current asset and current liability accounts at the end and beginning of the year are listed below. Prepare the cash flows from operating activities section of a statement of cash flows using the indirect method.

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

On the basis of the details of the common stock account presented below, calculate the total amount to be recorded in financing section of the statement of cash flows. Indicate whether the amount results in an increase or decrease in cash.

The comparative balance sheet of Barry Company, for 2011 and the preceding year ended December 31, 2010, appears below in condensed form:

The following selected account balances appeared on the financial statements of the Washington Company: The Washington Company uses the direct method to calculate net cash flow from operating activities. Cash paid to suppliers is

The Dickinson Company reported net income of $155,000 for the current year. Depreciation recorded on buildings and equipment amounted to $65,000 for the year. In addition, a building with an original cost of $250,000 and accumulated depreciation of $190,000 on the date of the sale, was sold for $75,000. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows:

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