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Exam 8: Reporting and Analyzing Cash Flows

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Question 61

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The full disclosure principle requires that noncash investing and financing activities be disclosed in a separate schedule attached to the statement of cash flows,or in the accompanying notes.

A) True
B) False

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Question 62

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From the records of Buco Corp.given below,calculate the cash provided (or used)by operations using the indirect method.Use a (+)or a (-)to indicate whether each item should be added to or subtracted from profit.

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Question 63

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Cash outflows to repurchase shares is an example of a cash flow from a financing activity.

The statement of cash flows helps analysts evaluate whether a company has enough cash to

Reconstruction analysis is used to identify the types of purchases and disposals of property,plant and equipment by reproducing the entries that occurred in the year.

The statement of cash flows helps financial statement users evaluate a company's earnings performance at a point in time.

A statement of cash flows should reconcile the differences between the beginning and ending balances of

Use the following information to prepare Talento Corp.'s statement of cash flows (according to the direct method)for the year ended December 31,2021.

A purchase of land in exchange for shares is disclosed in a separate schedule attached to the statement of cash flows or in a note to the statement.

Cash flows from selling non-current investments are reported in the statement of cash flows as

Firms have the option of using either the direct or indirect method to prepare the statement of cash flows.

Most acquisitions of property,plant and equipment are reported on the statement of cash flows as cash used by investing activities.

Use Anomeo Corp's income statement and balance sheet information to calculate the net cash provided by operating activities,using the:(a)Direct Method (b)Indirect Method

If taxes payable increased this year over last year's ending balance,cash payments to the government this year would be

The direct method of reporting operating cash flows

Both the direct and indirect methods yield the same net cash flow provided (used)by investing activities.

A transfer from retained earnings to common shares in a share dividend transaction should be reported in the statement of cash flows as

Under the indirect method,depreciation expense is subtracted from profit.

For each of the following independent cases,use the information provided to calculate the missing cash inflow/outflow:

While analyzing Tektron's statement of cash flows,you note that there was a net cash outflow from investing activities of $87,000,while cash provided by operations was $95,000.This means that