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Exam 5: The Statement of Cash Flows

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Question 21

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The Statement of Cash Flows can be based on (a) cash only or (b) cash plus cash equivalents.

A) True
B) False

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Question 22

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Generally,only investments with original maturities (to the investor) of less than three months qualify as a cash equivalent.

A) True
B) False

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Question 23

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The following information was provided by the records of QRS for the current reporting year: $\begin{array}{|l|r|}\hline \text { Cost of goods sold (as reported on the income statement) .. } & \$ 80,000 \\\hline \text { Inventory increase } & 20,000 \\\hline \text { Accounts payable increase } & 3,000 \\\hline\end{array}$ The cash paid to suppliers was:

In preparing a Statement of Cash Flows,you encountered the following transaction of February 1,2013: acquired a small office building in exchange for 5,000 of our common shares; market value $15 per share.How should this transaction be reported on the Statement of Cash Flows?

The Statement of Cash Flows is dated at a specific point in time like the balance sheet.

Given the following data: Income Statement For Year Ended Dec. 31, 2011 Additional information: 1.Increase in accounts receivable during 2011 - $25,000 2.Decrease in inventory during 2011 - $13,000 3.Decrease in accounts payable during 2001 - $28,000 4.Sale of old equipment for cash - $65,000 5.Dividends declared - $45,000; dividends paid - $40,000 6.New building acquired by issuing common shares - $42,000 7.Sold bonds for cash - proceeds of $75,000 What was net cash inflow (outflow) from operating activities during 2011?

You are preparing a Statement of Cash Flows.Complete the following schedule to compute cash flow from operating activities: Statement of Cash Flows

The income statement for CBA reported a net loss of $14,000.Also,the statement reported depreciation expense of $12,000 and amortization of patents of $6,000.Assuming no additional "adjustments to reconcile net income to cash from operating activities," the cash flow from operations would be a:

Which of the following would cause an inflow of cash?

Under IFRS,dividends received may be classified as operating or financing activities.

Cash paid to suppliers is accrual based cost of goods sold plus the increase in inventory plus the increase in accounts payable for the year.

Reported net income for ABC for 2013 was $20,000.Additional information is as follows: The Statement of Cash Flows,indirect method,would report cash flow from operations of $_______________________.

The following item is found on the income statement of a corporation: Gain from sale of equipment,$5,000.The equipment sold during the year originally cost $20,000,had accumulated depreciation of $16,000 and was sold for cash.The Statement of Cash Flows should show an inflow of cash from investing activities of:

Under IFRS,dividends received may be classified as:

When preparing the Statement of Cash Flows,which of the following sources of information should be consulted after considering all others?

KWB made the following cash outflows during 2011: $\begin{array} { l } \text {Cash for dividend payment on KWB common shares }&\$5,000 \\ \text {Cash for capital assets }&50,000 \\ \text {Cash for interest. }&3,000 \\ \text {Cash for purchase of JCK common stock. }& 40,000\\\end{array}$ What would be KWB's cash outflows for investing and financing activities for 2011 under IFRS? Note: Under IFRS,dividends and interest paid may also be classified as operating cash flows.

Cash flows from investing activities would include all of these except:

A loss on the sale of machinery in the ordinary course of business should be presented in a Statement of Cash Flows as a(n) :

Which of the following is not an inflow of cash?

Which method or format for preparing the Statement of Cash Flows reports the major operating cash flows on an individual line-item basis?