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Exam 24: The Statement of Cash Flows

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Question 61

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For each of the following operating activities, indicate whether it is a source of cash, a use of cash or neither under the indirect method. -----(a) increase in Accounts Receivable -----(b) increase in Prepaid Expense -----(c) increase in Inventory -----(d) increase in Accounts Payable -----(e) decrease in Supplies -----(f) increase in Accumulated Depreciation

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(a) use, (b) use, (c...

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Question 62

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A list of sources and uses of cash are given below. Select on the line provided whether each is an operating, investing, or financing activity. -sale of office equipment

A) operating
B) investing
C) financing activity.

D) All of the above
E) None of the above

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Question 63

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Chattel Company sold equipment that originally cost $46,000 and accumulated depreciation in the amount of $38,200 for $8,000 cash. -What amount is reported in the Cash Flows from Financing Activities section of the Statement of Cash Flows for the sale of this equipment?

Net income must be adjusted for changes in current assets and liabilities, such as accounts receivable and accounts payable, when determining the net cash provided by---------- .

For each of the following operating activities, indicate whether it is a under the indirect method:

A list of sources and uses of cash are given below. Indicate on the line provided whether each is an (O) operating, (I) investing, (F) financing, or a significant (N) noncash financing and investing activity. -purchased equipment for cash

A corporation received $130,000 in cash from the sale of a building and paid $68,000 in cash for the purchase of some new machinery. As a result, the statement of cash flows would report:

A decrease in merchandise inventory is:

Information from Zwatsch Company's income statement is as follows: net income $32,000, depreciation expense $5,200; loss on sale of plant assets $1,600; gain on retirement of bonds $10,000; an increase in accounts receivable of $4,200 and dividend payments of $4,400. The net cash provided by operating activities is:

A list of sources and uses of cash are given below. Indicate on the line provided whether each is an (O) operating, (I) investing, (F) financing, or a significant (N) noncash financing and investing activity. -paid advertising expenses

An increase or decrease in accounts payable during a fiscal period has no effect on the net cash provided by operating activities.

For each of the following operating activities, select whether it is a source of cash, a use of cash, neither under the indirect method. -increase in Wages Payable

If a firm's accounts receivable increased during the fiscal period, it is necessary to subtract the amount of the increase from the net income when computing the net cash provided by operating activities.

Decreases in current assets must be deducted from net income to arrive at cash flows from operating activities.

The statement of cash flows is often said to complement the income statement and the balance sheet. Explain the significance of this comparison.

Which of the following is reported on the statement of cash flows as a financing activity?

Doff Manufacturing Co. sold equipment that cost $13,300 and accumulated depreciation of $11,000 for $3,000 cash. How is the Cash Flows from Operating Activities affected?

A complete set of published financial statements for a corporation must include a statement of cash flows.

A list of sources and uses of cash are given below. Indicate on the line provided whether each is an operating, investing, or financing activity. -----(a) purchase of land -----(b) repayment of bond indebtedness -----(c) sale of merchandise -----(d) pay salaries and wages -----(e) pay interest expense -----(f) sale of office equipment -----(g) dividends paid -----(h) resale of Treasury Stock -----(i) borrowing through a note payable -----(j) dividend income

An example of a financing activity is: