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Exam 13: Statement of Cash Flows

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Question 91

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On the basis of the following data for Breach Co.for the current and preceding years ended December 31,prepare a statement of cash flows for the current year using the indirect method. Assume that equipment costing $25,000 was purchased for cash and no long term assets were sold during the period. Stock was issued for cash-3,200 shares at par. Net income for the current year was $76,000. Cash dividends declared and paid were $13,000.

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Question 92

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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

A) $12,500
B) $5,300
C) $2,750
D) $2,550

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

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Question 93

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The net income reported on the income statement for the current year was $210,000.Depreciation recorded on equipment and a building amount to $62,500 for the year.Balances of the current asset and current liabilities accounts at the beginning and end of the year are as follows: ​ ​ ​

The cost of goods 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 (all owed to merchandise suppliers) 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

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

Which of the following can be found on the statement of cash flows?

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.

Cash flows from operating activities,as part of the statement of cash flows,include cash flow from transactions that enter into the determination of net income.

To determine cash payments for income taxes for the statement of cash flows using the direct method,an increase in income taxes payable is added to the income tax expense.

Each of the events below may have an effect on the statement of cash flows.Designate how the event should be reported within the statement of cash flows using the codes provided below.Codes may be used more than once,or not at all. Codes: ​ Events: 1. Paid the weekly payroll 2. Paid an account payable 3. Issued bonds payable for cash 4. Declared and paid a cash dividend 5. Paid cash for a new piece of equipment 6. Purchased treasury stock for cash 7. Paid cash for stock in another company 8. Received interest on a long-term bond investment 9. Received cash for sales 10. Sold a long-term stock investment for cash at book value

Cash collections from customers were

To determine cash payments for operating expenses for the statement of cash flows using the direct method,a decrease in prepaid expenses is added to operating expenses other than depreciation.

Depreciation on factory equipment would be reported in the statement of cash flows prepared by the indirect method in

Under the direct method of preparing a statement of cash flows,the gain on the sale of land is not adjusted or reported as part of cash flows from operating activities.

The declaration and issuance of a stock dividend would be reported on the statement of cash flows.