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Exam 14: Statement of Cash Flows

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Question 71

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The following information is available from the current period financial statements: The net cash flow from operating activities using the indirect method is

A) $230,000
B) $188,000
C) $198,000
D) $156,000

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

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Question 72

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The following selected account balances appeared on the financial statements of the Washington Company: $\begin{array}{l}\begin{array}{lll}\text { Accounts receivable, Jan. } 1 \\\text { Accounts receivable, Dec. } 31 \\\text { Accounts payable, Jan. } 1 \\\text { Accounts payable, Dec. } 31 \\\text { Merchandise inventory, Jan. } 1 \\\text { Merchandise inventory, Dec. } 31 \\\text { Sales } \\\text { Cost of merchandise sold }\end{array}\begin{array}{lll}\$13,000 \\9,000 \\4,000 \\7,000 \\10,000 \\15,000 \\56,000 \\31.000\end{array}\end{array}$ The Washington Company uses the direct method to calculate net cash flow from operating activities. -Cash collections from customers were

A) $56,000
B) $52,000
C) $60,000
D) $45,000

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

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Question 73

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Cash flows from financing activities,as part of the statement of cash flows,would include any payments for dividends.

The statement of cash flows is not one of the basic financial statements.

Kennedy,Inc.reported the following data: $\begin{array}{|l|r|}\hline \text { Net income } & \$ 118,000 \\\hline \text { Depreciation expense } & 15,000 \\\hline \text { Loss on disposal of equipment } & 10,000 \\\hline \text { Gain on sale of building } & 20,000 \\\hline \text { Increase in accounts receivable } & 7,000 \\\hline \text { Decrease in accounts payable } & 2,000 \\\hline\end{array}$ Prepare the cash flows from operating activities section of the statement of cash flows using the indirect method.

The net income reported on the income statement for the current year was $275,000.Depreciation recorded on fixed assets and amortization of patents for the year were $40,000 and $9,000,respectively.Balances of current asset and current liability accounts at the end and at the beginning of the year are as follows: $\begin{array}{l}\begin{array}{lll}\\\text { Cash}\\\text { Accounts receivable}\\\text { Inventories}\\\text { Prepaid expenses}\\\text { Accounts payable merchandise creditors}\\\end{array}\begin{array}{lll}\underline { \text { End}}\\\$ 50,000 \\112,000 \\105,000 \\4,500 \\75,000\end{array}\begin{array}{lll}\underline { \text { Beginning}}\\\$ 60,000 \\108,000 \\93,000 \\6,500 \\89,000\end{array}\end{array}$ What is the amount of cash flows from operating activities reported on the statement of cash flows prepared by the indirect method?

A ten-year bond was issued at par for $250,000 cash.This transaction should be shown on a statement of cash flows under

The last item on the statement of cash flows prior to the schedule of noncash investing and financing activities reports

Which of the following should be added to net income in calculating net cash flow from operating activities using the indirect method?

Durrand Corporation's accumulated depreciation increased by $12,000,while patents decreased by $2,200 between consecutive balance sheet dates.There were no purchases or sales of depreciable or intangible assets during the year.In addition,the income statement showed a gain of $4,300 from sale of land.Reconcile a net income of $65,000 to net cash flow from operating activities.

Depreciation on factory equipment would be reported in the statement of cash flows prepared by the indirect method in

To determine cash payments for operating expenses for the statement of cash flows using the direct method,a decrease in accrued expenses is added to operating expenses payable other than depreciation.

Cash paid to acquire treasury stock should be shown on the statement of cash flows under investing activities.

Which of the following should be deducted from net income in calculating net cash flow from operating activities using the indirect method?

Under the direct method of reporting cash flows from operations,the primary source of cash is cash received from customers.

Cash outflows from financing activities include the payment of cash dividends,the acquisition of treasury stock,and the repayment of amounts borrowed.

A cash flow per share amount should be reported on the statement of cash flows.

Free cash flow is flow cash from operations less cash used for

The statement of cash flows is an optional financial statement.

Which of the following should be shown on a statement of cash flows under the financing activities section?