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Exam 16: Statement of Cash Flows

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Question 91

True/False

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Rarely will the cash flows from operating activities,as reported on the statement of cash flows,be the same as the net income reported on the income statement.

A) True
B) False

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Question 92

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Baxter Company reported a net loss of $13,000 for the year ended December 31.During the year,accounts receivable decreased by $5,000,merchandise inventory increased by $8,000,accounts payable increased by $10,000,and depreciation expense of $4,000 was recorded.During the year,operating activities under the indirect method

A) provided net cash of $8,000
B) provided net cash of $2,000
C) used net cash of $8,000
D) used net cash of $2,000

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

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Question 93

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A major disadvantage of the indirect method of reporting cash flows from operating activities is that the difference between the net amount of cash flows from operating activities and net income is emphasized.

The statement of cash flows is not one of the basic financial statements.

For each of the following activities that may take place during the accounting period, indicate the effect (a-g) on the statement of cash flows prepared using the indirect method. Choices may be selected as the answer for more than one question. -Sale of land

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

Cost of merchandise sold reported on the income statement was $155,000.The accounts payable balance increased $8,000,and the inventory balance increased by $21,000 over the year.Determine the amount of cash paid for merchandise.

Changes in current assets and current liabilities are reported on the statement of cash flows,using the indirect method,in the

Which of the following increases cash?

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.

For each of the following activities that may take place during the accounting period, indicate the effect (a-g) on the statement of cash flows prepared using the indirect method. Choices may be selected as the answer for more than one question. -Decrease in accounts payable balance

The comparative balance sheets of Posner Company,for Years 1 and 2 ended December 31,appear below in condensed form.​ The income statement for the current year is as follows:​ Additional data for the current year are as follows:​ Prepare a statement of cash flows using the indirect method of reporting cash flows from operating activities.

The operating cash flow available for company use after purchasing the fixed assets that are necessary to maintain current productive capacity is called the

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.Codes may be used more than once,or not at all.Codes:​ Events:1.Paid the weekly payroll2.Paid an account payable3.Issued bonds payable for cash4.Declared and paid a cash dividend5.Paid cash for a new piece of equipment6.Purchased treasury stock for cash7.Paid cash for stock in another company8.Recorded depreciation9.Received cash for sales10.Sold a long-term stock investment for cash at book value

Which of the following should be added to net income in calculating net cash flow from operating activities using the indirect method?

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

When using the spreadsheet (work sheet) method to analyze noncash accounts,it is best to start with

Cash receipts received from the issuance of a mortgage notes payable would be classified as a (n)

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.

A cash flow per share amount should be reported on the statement of cash flows.