Exam 24: The Statement of Cash Flows

Chattel Company sold for $7,000 equipment that originally cost $40,000 and had depreciation in the amount of $34,000 taken.What amount is reported in the Cash Flows from Investing Activities section of the Statement of Cash Flows?

The income statement shows a loss of $5,000 on the sale of equipment.As a result,the statement of cash flows would report

The payment of interest is considered to be

Why is the Statement of Cash Flows important?

The method used by most corporations to prepare the statement of cash flows is the

Why are depreciation expense and amortization expense added to Net Income under the indirect method?

The Natural Company's cash balance at December 31,2016,was $150,000.The following information was reported on the company statement of cash flows for 2017: The Natural Company's Statement of Cash Flows would report Cash Flows from Investing Activities totaling:

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.

The payment of cash dividends to stockholders would be classified as a cash outflow resulting from a financing activity.

Cinders Inc,reported net income of $50,000 and loss on sale of plant assets of $15,000.The cash received from the sale of plant assets was $45,000.Cinders also issued additional shares of stock for $25,000 and paid dividends of $4,500.Calculate the increase or decrease in cash from investing activities.

Cannon Manufacturing Co.sold equipment that cost $18,000 for $6,000.A loss on sale of $1,000 was recorded.How is the Cash Flows from Operating Activities affected?

By analyzing past cash flows,financial statement users can identify the primary sources and uses of cash.

Information from Zurich Company's income statement is as follows: net income $12,300,depreciation expense $12,000;gain on sale of equipment $4,000;proceeds from the sale of land $10,000.The net cash provided by operating activities is:

A decrease in accounts payable from $60,000 to $50,000 will be reflected on the statement of cash flows as a:

When the net income is reconciled with the net cash provided by operating activities,depreciation expense is added to the net income.

Bastion Corporation paid $15,600 on its mortgage loan.The principal portion was $5,000 and the interest was $10,600.The $5,000 constitutes what on the Statement of Cash Flows?

When the net income is adjusted to arrive at the net cash provided by operating activities,the amount of the bond premium amortized is added to the net income.

Chattel Company sold for $5,000 equipment that originally cost $40,000 and had depreciation in the amount of $34,000 taken.What amount is reported in the Cash Flows from Operating Activities section of the Statement of Cash Flows?

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.

An increase in accounts payable is