FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 16: Reporting the Statement of Cash Flows

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 81

True/False

Review LaterAdd Note

Review Later

Information to prepare the statement of cash flows usually comes from (a)comparative balance sheets, (b)current income statement, and (c)additional information.

A) True
B) False

Correct Answer

verified

Show Answer

Question 82

Multiple Choice

Review LaterAdd Note

Review Later

The purchase of long-term assets by issuing a note payable for the entire amount is reported on the statement of cash flows in the:

A) Financing activities.
B) Investing activities.
C) Schedule of noncash financing and investing activities.
D) Operating activities.
E) Reconciliation of cash balance.

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

Correct Answer

verified

Show Answer

Question 83

Multiple Choice

Review LaterAdd Note

Use the following information to calculate cash paid for income taxes: $\begin{array}{l|r}\text { Income tax expense } & \$ 43,000 \\\hline \text { Income tax payable, January 1 } & 9,100 \\\hline \text { Income tax payable, December 31 } & 10,200\end{array}$

Marshland Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available: $\begin{array} { l } \text {Cash dividends declared for the year }&\$40,000 \\ \text {Cash dividends payable at the beginning of the year }& 17,000\\ \text { Cash dividends payable at the end of the year}&13,000 \\\end{array}$ The amount of cash paid for dividends was: A) $\$ 57,000$ B) $\$ 53,000$ . C) $\$ 36,000$ . D) $\$ 40,000$ . E) $\$ 44,000$

Equipment costing $100,000 with accumulated depreciation of $40,000 is sold at a loss of $10,000. This implies that $40,000 cash was received from the sale.

When using the indirect method to calculate and report the net cash provided or used by operating activities, net income is adjusted for all but which of the following?

Alvez Company reports net income of $305,000 for the year ended December 31. It also reports $93,700 depreciation expense and a $10,000 loss on the sale of equipment. Its comparative balance sheet reveals a $40,200 increase in accounts receivable, a $10,200 decrease in prepaid expenses, a $15,200 increase in accounts payable, a $12,500 decrease in wages payable, and a $100,000 decrease in notes payable. Calculate the cash provided (used) in operating activities using the indirect method.

Financing activities include receiving cash dividends from investments in other companies' stocks.

Jamison Company reports depreciation expense of $35,000 for Year 2. Also, equipment costing $140,000 was sold for a $5,000 gain in Year 2. The following selected information is available for Jamison Company from its comparative balance sheet. Compute the cash received from the sale of the equipment. $\begin{array}{|l|l|l|}\hline \text { At December 31 } &{\text { Y ear 2 }} & \text { Y ear 1 } \\\hline \text { Equipment } & \$ 610,000 & \$ 750,000 \\\hline \text { Accumulated Depreciation-Equipment } & 428,000 & 500,000\\\hline\end{array}$

If a company borrows money from a bank, the interest paid on this loan should be reported on the statement of cash flows as a(n) :

Investing activities do not include the:

The reporting of net cash provided or used by operating activities that lists the major items of operating cash receipts, such as receipts from customers, and subtracts the major items of operating cash disbursements, such as cash paid for merchandise, is referred to as the:

Both the direct and indirect methods yield the identical net cash flow amount provided or used by operating activities.

The reporting of financing activities in the statement of cash flows is identical under either the direct or indirect methods.

The direct method separately lists each major item of operating cash receipts and cash payments.

The payment of cash dividends to shareholders is classified as a financing activity.

Bagwell's net income for the year ended December 31, Year 2 was $185,000. Information from Bagwell's comparative balance sheets is given below. Compute the cash received from the sale of its common stock during Year 2. $\begin{array}{|l|l|l|}\hline \text { At December } 31 &{\text { Y ear 2 }} & \text { Y ear 1 } \\\hline \text { Common Stock, } \$ 5 \text { par value } & \$ 500,000 & \$ 450,000 \\\hline \text { Paid-in capital in excess of par } & 948,000 & 853,000 \\\hline \text { Retained earnings } & 688,000 & 582,000 \\\hline\end{array}$

Cash flow amounts and their timing should be considered when planning and analyzing operating activities.

The indirect method for computing and reporting net cash flows from operating activities involves adjusting the net income figure to obtain net cash provided or used by operating activities.

The primary purpose of the statement of cash flows is to report all major cash receipts (inflows)and cash payments (outflows)during a period.