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Exam 13: Statement of Cash Flows

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Question 41

Multiple Choice

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Which of the following would be classified as a financing activity on the statement of cash flows?

A) Paying suppliers for inventory purchases.
B) Interest paid to lenders.
C) Lending money to another company.
D) Repurchasing capital stock from owners.

E) C) and D)
F) B) and C)

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Question 42

True/False

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When computing the net cash provided by operating activities under the indirect method on the statement of cash flows, an increase in prepaid expenses would be added to net income.

A) True
B) False

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Question 43

Multiple Choice

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In a statement of cash flows, which of the following would be classified as an investing activity?

Buying property, plant, or equipment would be reported as a cash outflow on the investing activities section of the statement of cash flows.

Mattix Corporation's balance sheet and income statement appear below: The company sold equipment for $20 that was originally purchased for $7 and that had accumulated depreciation of $1.It paid a cash dividend during the year and did not issue any bonds payable or repurchase any of its own common stock. Required: Determine the net cash provided by (used in)operating activities for the year using the indirect method.

Manila Corporation's comparative balance sheet appears below: The company's net income (loss)for the year was $0 and its cash dividends were $2,000.It did not dispose of any property, plant, and equipment, issue any bonds payable, or repurchase any of its own common stock during the year. Required: Compute the change in each balance sheet account denoted with an asterisk (*).Indicate whether the change in each balance will be recorded in the operating, investing, or financing activities section of the statement of cash flows.For items recorded in the operating activities section, also indicate whether the change will be added to or subtracted from net income.For all other items, indicate whether the change will be added as a cash inflow or subtracted as a cash outflow.The first entry has been filled in as an example.

Clayborn Corporation's net cash provided by operating activities was $111,000; its net income was $101,000; its income taxes were $43,000; its capital expenditures were $90,000; and its cash dividends were $28,000. Required: Determine the company's free cash flow.

Furis Corporation's cash and cash equivalents consist of cash and marketable securities.Last year the company's cash account decreased by $12,000 and its marketable securities account increased by $19,000.Net cash provided by (used in) operating activities was $18,000.Net cash provided by (used in) financing activities was $(12,000) .Based on this information, the net cash provided by (used in) investing activities on the statement of cash flows was:

The net cash provided by (used in) operating activities for the year was:

Kaze Corporation's cash and cash equivalents consist of cash and marketable securities.Last year the company's cash account increased by $25,000 and its marketable securities account decreased by $15,000.Net cash provided by (used in) operating activities was $38,000.Net cash provided by (used in) investing activities was $9,000.Based on this information, the net cash provided by (used in) financing activities on the statement of cash flows was:

What is Stone's net cash provided by (used in) operating activities?

Beacham Corporation's net cash provided by operating activities was $115; its net income was $95; its capital expenditures were $65; and its cash dividends were $17.The company's free cash flow was:

Alden Corporation's most recent comparative Balance Sheet is as follows: Alden's net income was $34,000.No equipment was purchased and no long-term investments were sold.There was a gain of $3,000 when equipment was sold.The accumulated depreciation on the equipment that was sold was $12,000.Cash dividends of $20,000 were declared and paid during the year. Required: Prepare Alden's statement of cash flows using the indirect method.

Swinger Corporation's comparative balance sheet appears below: The company did not dispose of any property, plant, and equipment during the year.Its net income for the year was $10,000.The net cash provided by (used in) operating activities is:

The net cash provided by (used in) financing activities for the year was:

Morbeck Corporation's net income last year was $56,000.The company paid a cash dividend of $31,000 and did not sell or retire any property, plant, and equipment last year.Changes in selected balance sheet accounts for the year appear below: Based solely on this information, the net cash provided by (used in) operating activities under the indirect method on the statement of cash flows would be:

Which of the following would be considered a cash inflow in the financing activities section of the statement of cash flows?

The net cash provided by (used in) financing activities for the year was:

Based solely on the information above, the net cash provided by (used in) financing activities on the statement of cash flows would be:

The statement of cash flows relies on a fundamental principle of double-entry bookkeeping; namely, the change in the cash balance must equal the change in total liabilities and stockholders' equity.