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Exam 12: Reporting and Analyzing Cash Flows

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Question 61

Multiple Choice

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If a company is using the indirect method to prepare the statement of cash flows,identify where an increase in the accounts receivable account should be reported:

A) An increase in cash flows from operating activities
B) An increase in cash flows from investing activities
C) A decrease in cash flows from operating activities
D) A decrease in cash flows from investing activities
E) An increase in cash flows from financing activities

F) B) and C)
G) D) and E)

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Question 62

True/False

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Investing activities include: (a)the purchase and sale of long-term assets,(b)lending and collecting on notes receivable,and (c)the purchase and sale of short-term investments in the securities of other entities,other than cash equivalents and trading securities.

A) True
B) False

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Question 63

Multiple Choice

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Northington,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 financing activities:

Receipts of cash dividends and interest earned on loans are classified as investing activities.

Use the following information about the current year's operations of a company to calculate the cash paid for merchandise. $\begin{array} { l r } \text { Cost of goods sold } & \$ 500,000 \\\text { Merchandise inventory, January 1 } & 85,000 \\\text { Merchandise inventory, December 31 } & 97,000 \\\text { Accounts payable, January 1 } & 68,000 \\\text { Accounts payable, December 31 } & 60,000\end{array}$

The statement of cash flows is:

Preparation of the statement of cash flows does not involve:

The payment of cash dividends never changes the balance of retained earnings.

Use the following information about the calendar-year cash flows of Park Company to prepare a statement of cash flows (direct method)and a schedule of noncash investing and financing activities.

Equipment costing $200,000 with accumulated depreciation of $160,000 is sold at a loss of $10,000.This implies that $30,000 cash was received from the sale.

Use the following information to calculate cash paid for income taxes:

The appropriate section in the statement of cash flows for reporting the purchase of equipment for cash is:

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.

Which of the following is included in the cash flows from financing activities section of the statement of cash flows?

Which of the following transactions or events should be reported as a source of cash from operating activities when using the direct method?

Use the following information to calculate the net cash provided or used by financing activities for the Streams Corporation: (a)Net income,$10,000 (b)Sold common stock for $40,000 cash (c)Paid cash dividend of $13,000 (d)Paid bond payable,$28,000 (e)Purchased equipment for $12,000 cash

Marshland Company is preparing the company's statement of cash flows for the fiscal year just ended.The following information is available: The amount of cash paid for dividends was:

The accountant for Crusoe Company is preparing the company's statement of cash flows for the fiscal year just ended.The following information is available: The amount of cash dividends paid during the year would be:

A cash equivalent is:

A company's Inventory balance at the end of the year was $188,000 and $200,000 at the beginning of the year.Its Accounts Payable balance at the end of the year was $84,000 and $80,000 at the beginning of the year,and its cost of goods sold for the year was $720,000.The company's total amount of cash payments for merchandise during the year equals: