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Exam 12: Statement of Cash Flows

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Question 41

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Howard Company uses the direct method to prepare its operating activities section of the statement of cash flows. Indicate how each event affects net income and the three types of activities on the statement of cash flows. In the net income column, use the letter "I" to indicate increase, the letter "D" to indicate decrease, and the letters "NA" to indicate that the income statement is not affected. In the three cash flow columns, use the letter "I" to indicate cash inflow, the letter "D" to indicate cash outflow, and the letters "NA" to indicate that the cash flow statement is not affected. On July 6, Year 1, Howard Company received an interest check relating to a note receivable. The interest revenue had not been previously accrued.

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(I)(I)(NA)(NA)
Cash flows reported as op...

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Question 42

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Valdez Company sold land that had cost $48,000 for $60,000 cash.Which of the following statements is true about this transaction?

A) The $12,000 gain would be subtracted from net income in the operating activities section using the direct method.
B) $48,000 would appear as a cash inflow from investing activities and $12,000 would be added in the operating activities section using the indirect method.
C) $60,000 would appear as a cash inflow from investing activities.
D) The $12,000 gain would be subtracted from net income in the operating activities section prepared using the indirect method and $60,000 would be reported as a cash inflow from investing activities.

E) B) and C)
F) A) and B)

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Question 43

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List the three categories of cash inflows and outflows shown on the statement of cash flows.

How would the issuance of a mortgage note in exchange for a building be reported on the statement of cash flows?

When using the indirect method to complete the cash flows from operating activities section of the statement of cash flows, what is the proper disposition of depreciation expense?

During Year 1, El Paso Company had the following changes in account balances: The Accumulated Depreciation account had a beginning balance of $87,500 and an ending balance of $122,500. The increase was due to depreciation expense.The Long-Term Notes Payable account had a beginning balance of $140,000 and an ending balance of $75,000. The decrease was due to repayment of debt.The Equipment Account had a beginning balance of $125,000 and an ending balance of $327,500. The increase was due to the purchase of other operational assets.The Long-Term Investments Account (Marketable Securities) had a beginning balance of $90,000 and an ending balance of $62,500. The decrease was due to the sale of investments at cost.The Dividends Payable account had a beginning balance of $60,000 and an ending balance of $50,000. There were $100,000 of dividends declared during the period.The Interest Payable account had a beginning balance of $11,250 and an ending balance of $6,250. The difference was due to the payment of interest.What is the net cash flow from investing activities?

During Year 1, El Paso Company had the following changes in account balances:The Accumulated Depreciation account had a beginning balance of $25,000 and an ending balance of $35,000. The increase was due to depreciation expense.The Long-Term Notes Payable account had a beginning balance of $40,000 and an ending balance of $15,000. The decrease was due to repayment of debt.The Equipment Account had a beginning balance of $25,000 and an ending balance of $92,500. The increase was due to the purchase of other operational assets.The Long-Term Investments Account (Marketable Securities) had a beginning balance of $18,000 and an ending balance of $12,500. The decrease was due to the sale of investments at cost.The Dividends Payable account had a beginning balance of $12,000 and an ending balance of $10,000. There were $20,000 of dividends declared during the period.The Interest Payable account had a beginning balance of $2,250 and an ending balance of $1,250. The difference was due to the payment of interest.What is the net cash flow from financing activities?

The following information is for Cleveland Company: Additional data for the current year:(1) Sales on account for the period were $246,000.(2) Operating expenses for the period were $133,000. Based on this limited information, what was the net cash inflow from operating activities?

How are cash receipts from interest on a note receivable classified on a statement of cash flows prepared using the direct method?

Barry Company uses the indirect method to prepare the operating activities section of its statement of cash flows. Required:Indicate whether each of the following items would be added to net income, subtracted from net income, or not included in the operating activities section of the statement of cash flows. (Use the letter "A" for added to net income, use the letter "S" for subtracted from net income, or use the letter "N" for not listed in operating activities section.)

Chisholm Associates uses the indirect method to prepare the operating activities section of the statement of cash flows. The following accounts and balances were drawn from the company's accounting records: Net income for the period was $67,000. What is the net cash flows from operating activities?

Which of the following describes the only difference between the direct and indirect methods of preparing the statement of cash flows?

On January 1, Year 2, the balance of Jacobs Corporation's Accounts Receivable was $34,000. Sales on account for Year 2 amounted to $188,000 and the ending balance of Accounts Receivable was $53,000. What is the amount of cash collected from customers?

Assuming a transaction increases interest receivable and interest revenue, what effect does it have on the amount of cash generated by operating activities?

For the year ended December 31, Year 1, Carsem Company had cash collections from customers of $220,000, cash paid to employees of $32,000, cash paid to suppliers of $100,000, cash used to retire long-term bonds of $32,000, and cash payments for dividends of $20,000. Based on this information, what is the net cash provided from operating activities?

A review of Pueblo Company's balance sheet revealed a beginning balance in its Land account of $150,000. The ending balance in the account was $325,000. All transactions associated with the purchase or sale of land were cash transactions. Based on this information alone, Pueblo would show a

Belvedere Corporation had a balance in its Equipment account on January 1, Year 2 of $340,400. During the year, equipment originally costing $92,700 and having Accumulated Depreciation of $24,200 was sold for $70,500. The ending balance of the Equipment Account was $302,900. How much did the company spend to purchase additional equipment during Year 2?

Clarion Corporation provided the provided the following partial list of account balances for Year 2: Net income was $100,000 for Year 2. Required:Prepare the financing activities section of the statement of cash flows.

Baird Company reported depreciation expense of $10,000 and net income of $16,000 on its Year 2 income statement. During Year 2, the company's accounts receivable balance decreased by $4,000. Based on this information alone, what was the amount of cash flow from operating activities?

Bristol Corporation reported a beginning balance of $6,200 in accounts receivable. During the year, sales on account totaled $49,600. If the ending balance of accounts receivable amounts to $25,000, what was the amount of cash received from customers?