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Exam 12: Reporting Cash Flows

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Question 41

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Use the following information about the calendar-year cash flows of Park Company to prepare a statement of cash flows (direct method) and a schedule of noncash investing and financing activities.

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Question 42

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The cash flow on total assets ratio is computed by dividing cash flows from operations by average total assets.

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Question 43

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Define and discuss the differences between operating, investing, and financing activities.

An investment that is readily convertible to a known amount of cash and that is sufficiently close to its maturity date so that its market value is unaffected by interest rate changes is a(n) :

When preparing the operating activities section of the statement of cash flows using the indirect method, a decrease in accounts receivable is subtracted from net income.

A company reported net income of $132,000, operating cash flows of $87,000, total cash flows of $112,000, and average total assets of $1,053,000. Calculate its cash flow on total assets ratio.

Based on the information in the following income statement and balance sheet for Monterey Corporation, determine the cash flows from operating activities using the direct method.

Northeast Inc. is preparing the company's statement of cash flows for the fiscal year just ended. Using the following information, determine the amount of cash flows from operating activities using the indirect method:

The appropriate section in the statement of cash flows for reporting the cash payment of wages is:

Use the following company information to prepare a schedule of significant noncash investing and financing activities: (a) Sold a building with a book value of $300,000 for $225,000 cash and sold land with a book value of $40,000 for $65,000 cash. (b) Issued 15,000 shares of $10 par value common stock in exchange for equipment with a market value of $175,000. (c) Retired a $100,000, 8% bond by issuing another $100,000, 7% bond issue. (d) Acquired land by issuing a twenty-year, 5%, $73,000 note payable.

Tate Company's current year income statement and changes in selected balance sheet accounts are given below. Calculate the company's net cash provided or used by operating activities using the direct method. The company also experienced the following during the current year:

What are the steps involved in the preparation of the statement of cash flows?

The statement of cash flows helps analysts evaluate all but which of the following?

Which of the following is included in the cash flows from financing activities section of the statement of cash flows?

An example of a transaction that must be disclosed as a noncash investing and financing activity includes all but which of the following?

Cash flow amounts and their timing should be considered when planning and analyzing operating activities.

A cash dividend payment to shareholders during the year should be reported on the statement of cash flows as:

The appropriate section in the statement of cash flows for reporting the purchase of equipment for cash is:

Cash flows from collections on credit sales are usually reported in the statement of cash flows as part of:

Use the following information to calculate cash paid for income taxes: