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Exam 13: Statement of Cash Flows

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Question 41

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A company had net income of $252,000.Depreciation expense is $26,000.During the year,accounts receivable and inventory increased by $15,000 and $40,000,respectively.Prepaid expenses and accounts payable decreased by $2,000 and $4,000,respectively.There was also a loss on the sale of equipment of $3,000.How much was the net cash flow from operating activities on the statement of cash flows using the indirect method?

A) $217,000
B) $224,000
C) $284,000
D) $305,000

E) A) and C)
F) All of the above

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Question 42

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In calculating cash flows from operating activities using the indirect method,a gain on the sale of equipment is

A) added to net income
B) deducted from net income
C) ignored because it does not affect cash
D) reported supplementally as a noncash investing and financing activity

E) All of the above
F) C) and D)

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Question 43

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A building with a book value of $54,000 is sold for $63,000 cash.Using the indirect method,this transaction should be shown on the statement of cash flows as follows:

Selected data taken from the accounting records of Laser Inc.for the current year ended December 31 are as follows: ​ During the current year,the cost of goods sold was $448,500,and the operating expenses other than depreciation were $78,000.The direct method is used for presenting the cash flows from operating activities on the statement of cash flows. ​ Required: Determine the amount reported on the statement of cash flows for: (a)Cash payments for merchandise (b)Cash payments for operating expenses

Using the indirect method,if land costing $85,000 was sold for $145,000,the amount reported in the financing activities section of the statement of cash flows would be $85,000.

Net income was $51,000 for the year.The accumulated depreciation balance increased by $14,000 over the year.There were no sales of fixed assets or changes in noncash current assets or liabilities.Under the indirect method,the cash flow from operations is $37,000.

The order of presentation of activities on the statement of cash flows is

Based on the following,what is free cash flow? Cash flows from investing include the purchase of a replacement asset for $100,000 and the sale of the one used in production,which is now obsolete,for $70,000.Cash flows from financing include $70,000 of borrowing.

Equipment with an original cost of $75,000 and accumulated depreciation of $20,000 was sold at a loss of $7,000.As a result of this transaction,cash would

Balances of the current asset and current liability accounts at the end and beginning of the year are as follows: ​ Use the direct method to prepare the cash flows from operating activities section of a statement of cash flows.

Which of the following would not be classified as an operating activity?

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

The following two scenarios are independent of one another.

Cash dividends of $45,000 were declared during the year.Cash dividends payable were $10,000 at the beginning of the year and $15,000 at the end of the year.The amount of cash for the payment of dividends during the year is

The net income reported on an income statement for the current year was $63,000.Depreciation recorded on fixed assets for the year was $24,000.Balances of the current asset and current liability accounts at the end and beginning of the year are listed below.Prepare the Cash Flows from Operating Activities section of the statement of cash flows using the indirect method.

A business issues 20-year bonds payable in exchange for preferred stock.This transaction would be reported on the statement of cash flows in

The statement of cash flows reports a firm's major sources of cash receipts and major uses of cash for a period of time.

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

Which of the following types of transactions would be reported as a cash flow from investing activity on the statement of cash flows?

​Norris Company declared cash dividends of $60,000 during the year.Cash dividends payable were $20,000 at the beginning of the year and $25,000 at the end of the year.The amount of cash Norris Co.used for payment of dividends during the year was