Tasbet Company reported net income of $400,000 for the current year. Included in the computation of net income was: \[\begin{array} { | l | r | } \hline \text { Depreciation expense } & \$ 70,000 \\ \hline \text { Amortization of a patent } & 32,000 \\ \hline \text { Income from an equity-method investment } & 35,000 \\ \hline \text { Dividends received on equity-method investment } &0 \\ \hline \text { Amortization of a bond discount } &15,000\\ \hline \text { Paid a dividend on preferred stock } & 80,000 \\ \hline \end{array}\] What is the amount of net cash provided by operating activities that would be reported as a result of these transactions?

A) $400,000 B) $482,000 C) $520,000 D) $537,000 A) $400,000 B) $482,000 C) $520,000 D) $537,000

Exam 22: The Statement of Cash Flows

The investing cash flows section of the statement of cash flows is based on an analysis of the balance sheet accounts for noncurrent assets and noncurrent liabilities.

(True/False)

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Question 61

Comparative financial statements for Tomtric Company follow: $Comparative financial statements for Tomtric Company follow: \begin{array}{c} \text {Tomtric Company }\\ \text {Income Statement}\\ \text { For the year ended December 31, 2019}\\\begin{array}{|l|r|} \hline \text { Sales } & \$ 70,000 \\ \hline \text { Cost of goods sold } & \underline{40,000} \\ \hline \text { Gross margin } & 30,000 \\ \hline \text { Depreciation expense } & 5,000 \\ \hline \text { Other operating expenses } & 15,000 \\ \hline \text { Operating income } & 10,000 \\ \hline \text { Loss on sale of equipment } & \underline{4,000} \\ \hline \text { Income before taxes } & 6,000 \\ \hline \text { Income tax expense } & \underline{2,400} \\ \hline \text { Net income } & \$ 3,600 \\ \hline \end{array}\end{array} Additional data on activities during 2019 are as follows: • During 2019, Tomtric Company sold used equipment for $3,000 that had cost $15,000 with accumulated depreciation of $8,000. • New equipment was purchased for $12,000 cash. • Cash dividends totaling $8,000 were paid. • Long-term investments that had cost $18,000 when purchased were sold for $18,000. • Common stock was issued for $10,000. Prepare the investing activities section of the statement of cash flows.$ Tomtric Company Income Statement For the year ended December 31, 2019 Sales \ 70,000 Cost of goods sold Gross margin 30,000 Depreciation expense 5,000 Other operating expenses 15,000 Operating income 10,000 Loss on sale of equipment Income before taxes 6,000 Income tax expense Net income \ 3,600 Additional data on activities during 2019 are as follows: • During 2019, Tomtric Company sold used equipment for $3,000 that had cost $15,000 with accumulated depreciation of $8,000. • New equipment was purchased for $12,000 cash. • Cash dividends totaling $8,000 were paid. • Long-term investments that had cost $18,000 when purchased were sold for $18,000. • Common stock was issued for $10,000. Prepare the investing activities section of the statement of cash flows.

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Question 62

How are the direct method and the indirect method alike for the statement of cash flows?

(Essay)

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Question 63

Under the indirect method, adjustments to net income are based on accounting equation relationships.

(True/False)

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Question 64

The statement of cash flows is divided into three sections under U.S. GAAP and four sections under IFRS.

(True/False)

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Question 65

On the statement of cash flows, the financing activities section is based on an analysis of the balance sheet accounts for noncurrent liabilities and equity.

(True/False)

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Question 66

What types of accounts are typically affected by financing cash flows in the statement of cash flows?

(Essay)

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Question 67

Tasbet Company reported net income of $400,000 for the current year. Included in the computation of net income was: Depreciation expense \ 70,000 Amortization of a patent 32,000 Income from an equity-method investment 35,000 Dividends received on equity-method investment 0 Amortization of a bond discount 15,000 Paid a dividend on preferred stock 80,000 What is the amount of net cash provided by operating activities that would be reported as a result of these transactions?

(Multiple Choice)

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Question 68

Cash equivalents are short-term, highly liquid investments with original maturities of one year or less when acquired.

(True/False)

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Question 69

List five ways that the statement of cash flows assists the users of financial statements?

(Essay)

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Question 70

Which of the following items would not be reported in the financing activities section of the statement of cash flows?

(Multiple Choice)

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Question 71

Which of the following is added to net income when computing net cash from operating activities under the indirect method?

(Multiple Choice)

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Question 72

Bank overdrafts are considered to be a reduction of cash under IFRS, but not under U.S. GAAP.

(True/False)

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Question 73

On the statement of cash flows, cash flows from financing activities include receipts of cash from issuing bonds and capital stock.

(True/False)

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Question 74

In determining net cash flow from operating activities, a decrease in accounts payable during a period ________.

(Multiple Choice)

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Question 75

In 2019, BayKing Company sold used equipment for $17,000. The equipment had an original cost of $80,000 and accumulated depreciation as of the date of sale was $60,000. BayKing also purchased held-to-maturity securities for $7,000. Net income for the year was $75,000. There were no other transactions conducted during the period. 1. What is the gain or loss on the sale of the equipment? 2. What are the 2019 net operating cash flows for BayKing? 3. What are the 2019 net investing cash flows for BayKing?

(Essay)

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Question 76

When preparing the investing activities section of the cash flow statement under both U.S. GAAP and IFRS, firms report acquisitions of fixed assets separate from sales of fixed assets.

(True/False)

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Question 77

IFRS does not require that the increase or decrease in cash and cash equivalents explained in the statement of cash flows agree to the line item Cash and Cash Equivalents, ending balance, in the balance sheet.

(True/False)

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Question 78

On the statement of cash flows, cash receipts from the collection of notes receivable are classified as investing activities.

(True/False)

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Question 79

On the statement of cash flows, the purchase of treasury stock is a source of cash from financing activities.

(True/False)

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Question 80

Showing 61 - 80 of 134

Exam 22: The Statement of Cash Flows

The investing cash flows section of the statement of cash flows is based on an analysis of the balance sheet accounts for noncurrent assets and noncurrent liabilities.

How are the direct method and the indirect method alike for the statement of cash flows?

Under the indirect method, adjustments to net income are based on accounting equation relationships.

The statement of cash flows is divided into three sections under U.S. GAAP and four sections under IFRS.

On the statement of cash flows, the financing activities section is based on an analysis of the balance sheet accounts for noncurrent liabilities and equity.

What types of accounts are typically affected by financing cash flows in the statement of cash flows?

Cash equivalents are short-term, highly liquid investments with original maturities of one year or less when acquired.

List five ways that the statement of cash flows assists the users of financial statements?

Which of the following items would not be reported in the financing activities section of the statement of cash flows?

Which of the following is added to net income when computing net cash from operating activities under the indirect method?

Bank overdrafts are considered to be a reduction of cash under IFRS, but not under U.S. GAAP.

On the statement of cash flows, cash flows from financing activities include receipts of cash from issuing bonds and capital stock.

In determining net cash flow from operating activities, a decrease in accounts payable during a period ________.

When preparing the investing activities section of the cash flow statement under both U.S. GAAP and IFRS, firms report acquisitions of fixed assets separate from sales of fixed assets.

IFRS does not require that the increase or decrease in cash and cash equivalents explained in the statement of cash flows agree to the line item Cash and Cash Equivalents, ending balance, in the balance sheet.

On the statement of cash flows, cash receipts from the collection of notes receivable are classified as investing activities.

On the statement of cash flows, the purchase of treasury stock is a source of cash from financing activities.

The Financial Reporting Environment

Financial Reporting Theory

Judgment and Applied Financial Accounting Research

Review of the Accounting Cycle

Statements of Net Income and Comprehensive Net Income

Statements of Financial Position and Cash Flows and the Annual Report

Accounting and the Time Value of Money

Revenue Recognition

Extenssion: Ol Revenue Recognition Previous Standard

Short-Term Operating Assets: Cash and Receivables

Short-Term Operating Assets: Inventory

Long-Term Operating Assets: Acquisition, Cost Allocation

Long-Term Operating Assets: Departures From Historical Cost

Operating Liabilities and Contingencies

Financing Liabilities

Accounting for Stockholders Equity

Investing Assets

Accounting for Income Taxes

Accounting for Leases

Extension: Ol Accounting for Leases Current Standard

Accounting for Employee Compensation and Benefits

Earnings Per Share

Accounting Corrections and Error Analysis

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