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Exam 16: Statement of Cash Flows

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Question 41

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In preparing the statement of cash flows, the correct order of reporting cash activities is Financing, Operating, Investing.

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B) False

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Question 42

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Kennedy, Inc. reported the following data: Prepare the cash flows for operating activities under the indirect method as it would appear on the statement of cash flows.

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Question 43

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If cash dividends of $135,000 were paid during the year and the company sold 1,000 shares of common stock at $30 per share, the statement of cash flows would report net cash flow from financing activities as $165,000.

Baxter Company reported a net loss of $13,000 for the year ended December 31, 2010. During the year, accounts receivable decreased by $5,000, merchandise inventory increased by $8,000, accounts payable increased by $10,000, and depreciation expense of $4,000 was recorded. During 2010, operating activities

The net income reported on an income statement for the current year was $63,000. Depreciation recorded on fixed assets for the year was $24,000. 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.

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

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.

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

Which of the following represents an inflow of cash and therefore would be reported on the statement of cash flows?

Depreciation on factory equipment would be reported in the statement of cash flows prepared by the indirect method in

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?

Net income was $51,000 for the year. The accumulated depreciation balance increased by $14,000 over the year. There were no sales of fixed assets or changes in noncash current assets or liabilities. Under the indirect method, the cash flow from operations is $37,000.

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:

Which of the following should be shown on a statement of cash flows under the financing activity section?

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.

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?

Select 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:

When using the worksheet method to analyzing noncash accounts , no order of analysis is required, but it is more efficient to start with Retained Earnings and proceed upward in the account listing.

Rarely would 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.

Free cash flow is cash from operations, less cash for