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Exam 13: Differential Analysis: The Key to Decision Making

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Question 21

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Carriveau Corporation's most recent balance sheet appears below: Net income for the year was $172.Cash dividends were $35.The company did not sell or retire any property,plant,and equipment during the year.The net cash provided by (used in) operating activities for the year was:

A) $183
B) $246
C) ($11)
D) $161

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

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Question 22

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Stone Retail Corporation's most recent comparative Balance Sheet is as follows: Stone's net income was $46,000.No equipment was sold or purchased.Cash dividends of $40,000 were declared and paid.Stone uses the indirect method to prepare its statement of cash flows. What is Stone's net cash provided (used) by operating activities?

A) ($18,000)
B) ($33,000)
C) $69,000
D) $84,000

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

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Question 23

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Megan Corporation's net income last year was $98,000.Changes in the company's balance sheet accounts for the year appear below: The company paid a cash dividend of $36,000 and it did not dispose of any long-term investments or property,plant,and equipment.The company did not issue any bonds payable or repurchase any of its own common stock.The following questions pertain to the company's statement of cash flows. The net cash provided by (used in) operating activities last year was:

Buckley Corporation's most recent comparative balance sheet appears below: The company's net income for the year was $91 and it paid a cash dividend of $22.It did not dispose of any property,plant,and equipment during the year.The company did not retire any bonds payable or repurchase any of its own common stock. The net cash provided by (used in) financing activities for the year was:

Klicker Corporation's most recent balance sheet appears below: The company's net income for the year was $152 and it did not issue any bonds or repurchase any of its common stock during the year.Cash dividends were $40.The net cash provided by (used in) financing activities for the year was:

The amount of depreciation added to net income equals the sum of the debits to the Accumulated Depreciation account.

Spackel Corporation recorded the following events last year: On the statement of cash flows,some of these events are classified as operating activities,some are classified as investing activities,and some are classified as financing activities. Based solely on the information above,the net cash provided by (used in) financing activities on the statement of cash flows would be:

Under the indirect method of determining the net cash provided by operating activities on the statement of cash flows,a decrease in inventory would be added to net income.

When computing the net cash provided by operating activities using the indirect approach on the statement of cash flows,which item below would NOT be added to net income?

Free cash flow is net cash provided by operating activities less capital expenditures.

Last year Burch Corporation's cash account decreased by $6,000.Net cash provided by investing activities was $13,000.Net cash used in financing activities was $30,000.On the statement of cash flows,the net cash flow provided by (used in) operating activities was:

Alcoser Corporation's most recent balance sheet appears below: Net income for the year was $60.Cash dividends were $12.The company did not dispose of any property,plant,and equipment.It did not issue any bonds payable or repurchase any of its own common stock.The following questions pertain to the company's statement of cash flows. The net cash provided by (used in) operating activities for the year was:

Free cash flow will increase if a company increases its accounts payable balance by delaying payments to suppliers.

Hirshberg Corporation's comparative balance sheet appears below: The company's net income (loss) for the year was $11,000 and its cash dividends were $4,000.It did not sell or retire any property,plant,and equipment during the year. The company's net cash provided by operating activities is:

Buckley Corporation's most recent comparative balance sheet appears below: The company's net income for the year was $91 and it paid a cash dividend of $22.It did not dispose of any property,plant,and equipment during the year.The company did not retire any bonds payable or repurchase any of its own common stock. The free cash flow for the year was:

Buckley Corporation's most recent comparative balance sheet appears below: The company's net income for the year was $91 and it paid a cash dividend of $22.It did not dispose of any property,plant,and equipment during the year.The company did not retire any bonds payable or repurchase any of its own common stock. The net cash provided by (used in) investing activities for the year was:

Under the indirect method of determining the net cash provided by operating activities on the statement of cash flows,an increase in property,plant,and equipment is subtracted from net income.

Negative free cash flow suggests that the company generated enough cash flow from its operating activities to fund its capital expenditures and dividend payments.

Excerpts from Aultman Corporation's comparative balance sheet appear below: Which of the following is the correct treatment within the operating activities section of the statement of cash flows using the indirect method?

Marks Corporation's balance sheet appears below: Net income for the year was $77.Cash dividends were $13.The company did not dispose of any property,plant,and equipment,retire any bonds payable,or repurchase any of its own common stock during the year. Required: Prepare a statement of cash flows in good form using the indirect method.