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Exam 12: Reporting and Analyzing Cash Flows

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Question 31

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Which of the following items is reported on the statement of cash flows under financing activities?

A) Declaration of a cash dividend.
B) Payment of a cash dividend.
C) Declaration of a stock dividend.
D) Payment of a stock dividend.
E) Stock split.

F) A) and D)
G) A) and C)

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Question 32

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The full disclosure principle requires that noncash investing and financing activities be disclosed in the financial statements.

A) True
B) False

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Question 33

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Bagwell's net income for the year ended December 31, Year 2 was $175,000. Information from Bagwell's comparative balance sheets is given below. Compute the cash paid for dividends during Year 2.

The statement of cash flows helps analysts evaluate all but which of the following?

Scranton, Inc. reports net income of $230,000 for the year ended December 31. It also reports $87,700 depreciation expense and a $5,000 gain on the sale of equipment. Its comparative balance sheet reveals a $35,500 decrease in accounts receivable, a $15,750 increase in accounts payable, and a $12,500 decrease in wages payable. Calculate the cash provided (used) in operating activities using the indirect method.

Investing activities do not include the:

The first line item in the operating activities section of a spreadsheet for a statement of cash flows prepared using the indirect method is:

Describe the format of the statement of cash flows, including the reporting of significant noncash investing and financing activities.

Which one of the following is representative of typical cash flows from operating activities?

Accounting standards require companies to include a statement of cash flows in a complete set of financial statements.

The statement of cash flows cannot help address questions such as:

Explain how the cash flows from operating activities section of the statement of cash flows is prepared using the direct method.

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

Information to prepare the statement of cash flows usually comes from three sources: (1) _______________, (2) _______________________, and (3) ____________________.

A company reported average total assets of $501,000 in Year 1 and $611,000 in Year 2. Its net operating cash flow in Year 1 was $41,500 and $55,250 in Year 2. Calculate its cash flow on total assets ratio for both years. Comment on the results.

Holly Oaks, Inc. is preparing the company's statement of cash flows for the fiscal year just ended. Using the following information, determine the amount of cash flows from operating activities using the indirect method:

Use the following information to calculate cash received as dividends from investments in other companies' stock:

A company had average total assets of $3,216,000, total cash flows of $1,320,000, cash flows from operations of $554,000, and cash flows for plant assets of $850,000. The cash flow on total assets ratio equals:

Cash flows from interest received on loans are reported in the statement of cash flows as part of:

A purchase of land in exchange for shares of stock is disclosed at the bottom of the statement of cash flows or in a note to the statement.