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Exam 16: Reporting the Statement of Cash Flows

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Question 61

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Use the following information to calculate cash received from dividends:

A) $63,500.
B) $63,000.
C) $64,000.
D) $67,100.
E) $60,400.

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

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Question 62

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When preparing the operating activities section of the statement of cash flows using the indirect method,an increase in income taxes payable is added to net income.

A) True
B) False

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Question 63

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The following information is available for the Brookstone Company: Additional information: (1)There was no gain or loss on the sales of the long-term investments,nor on the bonds retired. (2)Old machinery with an original cost of $45,060 was sold for $2,520 cash. (3)New machinery was purchased for $81,060 cash. (4)Cash dividends of $40,320 were paid. (5)Additional shares of stock were issued for cash. Prepare a complete statement of cash flows for calendar-year 2013 using the indirect method.

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

Based on the following income statement and balance sheet for Bankowski Corporation,determine the cash flows from operating activities using the indirect method.

Analysis reveals that a company had a net increase in cash of $20,000 for the current year.Net cash provided by operating activities was $18,000;net cash used in investing activities was $10,000 and net cash provided by financing activities was $12,000.If the year-end cash balance is $24,000,the beginning cash balance was:

The following information is available for the Aarons Corporation: Additional information: (1)There was no gain or loss on the sales of the long-term investments,nor on the bonds retired. (2)Old equipment with an original cost of $37,550 was sold for $2,100 cash. (3)New equipment was purchased for $67,550 cash. (4)Cash dividends of $33,600 were paid. (5)Additional shares of stock were issued for cash. Prepare a complete statement of cash flows for calendar-year 2015 using the indirect method.

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

On a spreadsheet used to prepare the operating activities section of the statement of cash flows,depreciation expense does not require an entry in the Analysis of Changes columns because it is a noncash item.

To be classified as a cash equivalent,the only criterion an item must meet is that it must be readily convertible to a known amount of cash.

When preparing the operating activities section of the statement of cash flows using the indirect method,expenses with no cash outflows are added back to net income.

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

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

Mercury Company reports depreciation expense of $40,000 for Year 2.Also,equipment costing $150,000 was sold for its book value in Year 2.The following selected information is available for Mercury Company from its comparative balance sheet.Compute the cash received from the sale of the equipment.

Fernwood Company is preparing the company's statement of cash flows for the fiscal year just ended.The following information is available: The ending balance in retained earnings is:

Investing activities do not include the:

Jeffreys Company reports depreciation expense of $40,000 for Year 2.Also,equipment costing $240,000 was sold for a $10,000 loss in Year 2.The following selected information is available for Jeffreys Company from its comparative balance sheet.Compute the cash received from the sale of the equipment.

Information to prepare the statement of cash flows usually comes from (a)comparative balance sheets, (b)current income statement,and (c)additional information.

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

Typical cash flows from investing activities include each of the following except: