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Exam 13: Statement of Cash Flows

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Question 61

True/False

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Repayments of bonds would be shown as a cash outflow in the investing section of the statement of cash flows.

A) True
B) False

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Question 62

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The net income reported on the income statement for the current year was $275,000. 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?

A) $198,000
B) $324,000
C) $352,000
D) $296,000

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

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Question 63

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The statement of cash flows shows the effects on cash of a company's operating, investing, and financing activities.

There is no difference in the Investing and Financing sections of the statement of cash flows using the indirect and direct method.

An analysis of the general ledger accounts indicates that equipment, with an original cost of $134,000 and accumulated depreciation of $105,000 on the date of sale, was sold for $20,000 during the year. Using this information, indicate the items to be reported on the statement of cash flows using the indirect method.

In preparing the cash flows from operating activities section of the statement of cash flows by the indirect method, the amortization of bond discount for the period is deducted from the net income for the period.

The cost of merchandise sold during the year was $50,000. Merchandise inventories were $12,500 and $10,500 at the beginning and end of the year, respectively. Accounts payable were $6,000 and $5,000 at the beginning and end of the year, respectively. Using the direct method of reporting cash flows from operating activities, cash payments for merchandise total

On the basis of the following data for Branch 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 $125,000 was purchased for cash and the land was sold for $15,000. The stock was issued for cash and the only entries in the retained earnings account were net income of $56,000 and cash dividends declared and paid of $18,000.

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.

Balances of the current asset and current liability accounts at the end and beginning of the year are as follows:

The cost of merchandise sold during the year was $45,000. Merchandise inventories were $13,500 and $10,500 at the beginning and end of the year, respectively. Accounts payable were $7,000 and $5,000 at the beginning and end of the year, respectively. Using the direct method of reporting cash flows from operating activities, cash payments for merchandise total

Investing activities include

Cash paid for equipment would be reported in the statement of cash flows in

The statement of cash flows is not useful for:

Indicate 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:

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

Cash dividends paid on capital stock would be reported in the statement of cash flows in

Which of the following does not represent an outflow of cash and therefore would not be reported on the statement of cash flows as a use of cash?

Based on the following, what is free cash flow?

Using the indirect method, if land costing $85,000 was sold for $145,000, the amount reported in the financing activities section of the statement of cash flows would be $85,000.