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Exam 16: Statement of Cash Flows

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Question 51

True/False

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The manner of reporting cash flows from investing and financing activities will be different under the direct method as compared to the indirect method.

A) True
B) False

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Question 52

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​Which of the following would not be on the statement of cash flows?

A) ​cash flows from investing activities
B) ​cash flows from financing activities
C) ​cash flows from operating activities
D) cash flows from contingent activities

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

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Question 53

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Identify the section of the statement of cash flows (a-d) where each of the following items would be reported. -Sale of machinery held for use by the company

The main disadvantage of the direct method of reporting cash flows from operating activities is that the necessary data are often costly to accumulate.

The statement of cash flows reports a firm's major sources of cash receipts and major uses of cash for a period of time.

Cash paid to purchase long-term investments would be reported on the statement of cash flows in

There are two alternatives to reporting cash flows from operating activities in the statement of cash flows: (1) the direct method and (2) the indirect method.

Identify the section of the statement of cash flows (a-d) where each of the following items would be reported. -Increase in accounts receivable

Dorman Company reported the following data:​​ Prepare the Cash flows from operating activities section of the statement of cash flows using the indirect method.

State the section (s) of the statement of cash flows prepared by the indirect method (operating activities, investing activities, financing activities, or not reported) and the amount that would be reported for each of the following transactions:? (a)Received $120,000 from the sale of land costing $70,000. (b)Purchased investments for $75,000. (c)Declared $35,000 cash dividends on stock. $5,000 dividends were payable at the beginning of the year, and $6,000 were payable at the end of the year. (d)Acquired equipment for $64,000 cash. (e)Declared and issued 100 shares of $20 par common stock as a stock dividend, when the market price of the stock was $32 a share. (f)Recognized depreciation for the year, $37,000. (g)Issued 85,000 shares of $10 par common stock for $25 a share, receiving cash. (h)Issued $500,000 of 20-year, 10% bonds payable at 99. (i)Borrowed $43,000 from Regional Bank, issuing a five-year, 8% note for that amount.

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

Selected data for the current year ended December 31 are as follows:? During the current year, the cost of merchandise sold was $620,000 and the operating expenses other than depreciation were $142,000. The direct method is used for presenting the cash flows from operating activities on the statement of cash flows.Determine the amount reported on the statement of cash flows for (a) cash payments for merchandise and (b) cash payments for operating expenses.?

The following information is available from the current period financial statements:​ The net cash flow from operating activities using the indirect method is

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

Zenith Corporation sells some of its used store fixtures. The acquisition cost of the fixtures is $12,500, and the accumulated depreciation on these fixtures is $9,750 at the time of sale. The fixtures are sold for $5,300. The value of this transaction in the investing section of the statement of cash flows is

If $475,000 of bonds payable are sold at 101, $475,000 would be reported in the Cash flows from financing activities section of the statement of cash flows.

The net income reported on the income statement for the current year was $250,000. 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?

Net income for the year was $45,500. Accounts receivable increased by $5,500, and accounts payable increased by $11,200. Under the indirect method, the cash flow from operations is

Free cash flow is cash flow from operations less cash used to purchase fixed assets to maintain productive capacity.

Accounts receivable resulting from sales to customers amounted to $40,000 and $31,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $120,000. Exclusive of the effect of other adjustments, the net cash flows from operating activities to be reported on the statement of cash flows using the indirect method is