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Exam 14: Statement of Cash Flows

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Question 21

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The following selected account balances appeared on the financial statements of the Washington Company: The Washington Company uses the direct method to calculate net cash flow from operating activities. Cash paid to suppliers is

A) $39,000
B) $33,000
C) $29,000
D) $23,000

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

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Question 22

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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) $166,000
B) $184,000
C) $110,000
D) $240,000

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

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Question 23

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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.

To determine cash payments for merchandise for the cash flow statement using the direct method,a decrease in accounts payable is added to the cost of merchandise sold.

Which of the following below increases cash?

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

Indicate the section (operating activities,investing activities,financing activities,or none)in which each of the following would be reported on the statement of cash flows prepared by the indirect method:

The net income reported on the income statement for the current year was $250,000.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: What is the amount of cash flows from operating activities reported on the statement of cash flows prepared by the indirect method?

If $475,000 of bonds payable are sold at 101,$475,000 would be reported in the cash flows from financing activities section of the statement of cash flows.

To determine cash payments for income tax for the cash flow statement using the direct method,an increase in income taxes payable is added to the income tax expense.

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

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

The statement of cash flows is not useful for:

A company purchases equipment for $32,000 cash.This transaction should be shown on the statement of cash flows under

Which of the following is not one of the four basic financial statements?

Lamar Corporation purchased land for $150,000.Later in the year the company sold land with a book value of $190,000 for $200,000.Show how the effects of these transactions are reported on the statement of cash flows using the indirect method. Adjustments to reconcile net income to net cash from operating activities: Gain on sale of land ($10,000)

Repayments of bonds would be shown as a cash outflow in the investing section of the statement of cash flows.

If a business issued bonds payable in exchange for land,the transaction would be reported in a separate schedule on the statement of cash flows.

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

Based on the following,what is free cash flow? Operations includes $2,000 for depreciation.Investing includes 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.Financing is made up of $70,000 of borrowing and $25,000 of dividends paid.