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Exam 12: Reporting Cash Flows

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Question 111

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Use the following information to calculate the net cash provided or used by financing activities for the Hulu Corporation: (a) Net income, $10,000 (b) Sold common stock for $40,000 cash (c) Paid cash dividend of $13,000 (d) Paid bond payable, $28,000 (e) Purchased equipment for $12,000 cash

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Question 112

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When the operating activities section of the statement of cash flows is reported using the direct method:

A) Net income is adjusted for changes in noncurrent assets and noncurrent liabilities.
B) Operating cash receipts minus operating cash payments equals net cash provided (used by) operating activities.
C) Footnotes to the financial statements disclose the difference between net income and the cash provided or used by financing activities.
D) The income statement is prepared under the cash basis of accounting.
E) Noncash investing and financing activities is included in the statement of cash flows.

F) A) and C)
G) B) and C)

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Question 113

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Use the information provided to calculate the missing cash paid for merchandise for the period.

The statement of cash flows cannot help address questions such as:

The cash flow on total assets ratio is computed by dividing average total assets by operating income.

The cash flows from operating activities section of an indirect method of cash flows begins with net income or loss.

The following transactions and events occurred during the year. Assuming that this company uses the indirect method to report cash provided by operating activities, indicate where each item would appear on its statement of cash flows by placing an x in the appropriate column. Statement of Cash Flows (Indirect Method)

In preparing a company's statement of cash flows for the year just ended, the following information is available: Net cash flows from financing activities for the year were:

Activities that involve the production or purchase of merchandise and the sale of goods and services to customers, including expenditures related to administering the business, are classified as:

In preparing a company's statement of cash flows for the most recent year, Jeffers Corp. reported the following information: Net cash flows from financing activities for the year were:

Use the information provided to calculate the missing cash received for interest for the period.

Explain the purpose and format of the statement of cash flows. Also describe its relevance to decision makers.

Explain how the cash flows from operating activities section of the statement of cash flows is prepared using the indirect method.

A main purpose of the statement of cash flows is to report all the major cash ________ and cash ________.

The appropriate section in the statement of cash flows for reporting the receipt of cash dividends from investments in securities is:

Use the following information to calculate cash received from dividends:

A company reported operating cash flows in Year 1 of $33,100 and $26,220 in Year 2. Its average total assets in Year 1 were $262,000 and $313,000 in Year 2. Calculate the cash flow on total assets ratio for both years. Comment on the results.

For each of the following items, indicate whether it would be classified as an (O) operating activity, an (I) investing activity, a (F) financing activity, or a significant (N) noncash financing and investing activity. ________ (1) Received interest from investments in trading securities. ________ (2) Collected accounts receivable from customers. ________ (3) Issued bonds payable for cash. ________ (4) Paid wages to employees. ________ (5) Issued stock for cash. ________ (6) Sold equipment for cash. ________ (7) Purchased land in exchange for a note payable. ________ (8) Paid cash dividends. ________ (9) Received dividends from stock investments. ________ (10) Purchases of land for cash.

In preparing a company's statement of cash flows using the indirect method, the following information is available: Net cash provided by operating activities was:

The appropriate section in the statement of cash flows for reporting the issuance of common stock for cash is: