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Exam 11: Statement of Cash Flows

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Question 21

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Wireless Technologies reports operating expenses of $2 million.Operating expenses include rent expense.Prepaid rent at the beginning and end of the year are $20,000 and $70,000,respectively.All other operating expenses were paid in cash as incurred.What is the amount of cash paid for operating expenses?

A) $2,000,000.
B) $2,070,000.
C) $1,950,000.
D) $2,050,000.

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

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Question 22

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Which of the following is an example of a noncash activity?

A) Sale of land for less than its cost.
B) Purchase of land by issuing debt.
C) Sale of land for more than its cost.
D) Purchase of land using cash proceeds from issuance of common stock.

E) A) and B)
F) None of the above

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Question 23

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Assume net income was $100,000,depreciation expense was $8,000,accounts receivable decreased by $7,500,and accounts payable decreased by $2,500.The amount of cash flows from operating activities is:

Assuming Net Income for the year is $115,000,what is the Operating Cash Flows given the following information:

Which of the following is deducted from net income as an adjustment under the indirect method of preparing the statement of cash flows?

Cash received from issuing common stock would be classified in which section of the Statement of Cash Flows?

Mobile Video Systems sold land,investments,and issued their own common stock for $10 million,$15 million,and $20 million,respectively.Mobile Video also purchased treasury stock,equipment,and a patent for $2 million,$4 million,and $6 million,respectively.What amount should the company report as net cash flows from investing activities? What amount should the company report as net cash flows from financing activities?

The balance sheet of Storage Solutions reports total assets of $300,000 and $350,000 at the beginning and end of the year,respectively.The cash return on assets for the year is 10%.What is Storage Solutions' net cash flows from operating activities for the year?

The balance sheet of Tech Track reports total assets of $400,000 and $500,000 at the beginning and end of the year,respectively.Sales revenues are $1,080,000($800,000 in the previous year) ,net income is $40,000,and net cash flows from operating activities are $50,000.How does Tech Track's asset turnover compare to the industry average of 2.4 times?

During the year, Next Tec Corp. had the following cash flows: receipt from customers, $10,000; receipt from the bank for long-term borrowing, $6,000; payment to suppliers, $5,000; payment of dividends, $1,000, payment to workers, $2,000; and payment for machinery, $8,000. What amount would be reported for investing cash flows on the Statement of Cash Flows?

Under the indirect method,an increase in accounts payable is added to net income to arrive at net cash flows from operating activities.

The balance sheet of Computer World reports total assets of $350,000 and $450,000 at the beginning and end of the year,respectively.Sales revenues are $800,000,net income is $100,000,and net cash flows from operating activities are $150,000.What is Computer Worlds' cash return on assets?

Data Solutions reports cost of goods sold of $75 million.Inventory at the beginning and end of the year are $8 million and $9 million,respectively.Accounts payable at the beginning and end of the year are $5 million and $3 million,respectively.What is the amount of cash paid to suppliers?

Wireless Technologies reports income tax expense of $800,000.Income tax payable at the beginning and end of the year are $50,000 and $70,000,respectively.What is the amount of cash paid for income taxes?

The balance sheet of Computer World reports total assets of $350,000 and $450,000 at the beginning and end of the year,respectively.Sales revenues are $800,000,net income is $100,000,and net cash flows from operating activities are $150,000.What is Computer World's cash flow to sales?

Which of the following transactions would not create a cash flow?

Under the indirect method,a decrease in accounts payable is added to net income to arrive at net cash flows from operating activities.

The issuance of notes payable for borrowing is classified in the statement of cash flows as a(n) :

Freedom Wireless reports operating expenses of $255,000.Operating expenses include both rent expense and salaries expense.Prepaid rent decreases during the year by $10,000 and salaries payable increases by $25,000.What is the cash paid for operating expenses during the year?

We calculate cash return on assets as