Exam 12: Statement of Cash Flows

The general ledger of Link Company provides the following information: The company's net sales for the year was $2,200,000 and cost of goods sold amounted to $1,500,000. Instructions Compute the following: (a) Cash receipts from customers. (b) Cash payments to suppliers.

Free _______________ equals cash provided by operations less capital expenditures and cash dividends.

Cash receipts from interest and dividends are classified as

For each of the following items, indicate by using the appropriate code letter, how the item should be reported in the statement of cash flows, using the direct method.

130. Which of the following statements concerning the statement of cash flows is true?

Selected transactions for the Ecker Company are listed below. 1. Collected accounts receivable. 2. Declared and paid dividends on common stock. 3. Sold long-term investments for cash. 4. Issued stock for equipment. 5. Repaid five year note payable. 6. Paid employee wages. 7. Converted bonds payable to common stock. 8. Acquired long-term investment with cash. 9. Sold buildings and equipment for cash. 10. Sold merchandise to customers. Instructions Classify each transaction as either (a) an operating activity, (b) an investing activity, (c) a financing activity, or (d) a noncash investing and financing activity.

Noncash investing and financing activities must be reported in the body of a statement of cash flows.

The category that is generally considered to be the best measure of a company's ability to continue as a going concern is

The primary purpose of the statement of cash flows is to

At January 1, 2017, Benny Enterprises reported a balance in the Equipment account of $45,000. During the year the company purchased equipment with a cost of $60,000 and sold equipment with a book value of $30,000. The company reported a loss on the sale of equipment of $4,000. Assume the indirect method is used. Instructions Determine what amount will be reported in (a) the operating activities section and (b) the investing activities section with regard to the purchase and sale of equipment.

The net income reported on the income statement for the current year was $220,000. Depreciation recorded on plant assets was $35,000. Accounts receivable and inventories increased by $2,000 and $8,000, respectively. Prepaid expenses and accounts payable decreased by $2,000 and $12,000 respectively. How much cash was provided by operating activities?

If a gain of $12,000 is incurred in selling (for cash) office equipment having a book value of $110,000, the total amount reported in the cash flows from investing activities section of the statement of cash flows is

In computing cash payments for income taxes, a decrease in income taxes payable is ______________ to (from) income tax expense.

Jean's Vegetable Market had the following transactions during 2017: 1) Issued $50,000 of par value common stock for cash. 2) Repaid a 6 year note payable in the amount of $22,000. 3) Acquired land by issuing common stock of par value $50,000. 4) Declared and paid a cash dividend of $7,000. 5) Sold a long-term investment (cost $3,000) for cash of $6,000. 6) Acquired an investment in IBM stock for cash of $10,000. What is the net cash provided by financing activities?

The cash effects of transactions that create revenues and expenses are

Plexis Company reported net income of $148,000. For 2017, depreciation was $45,000, and the company reported a gain on sale of investments of $12,000. Accounts receivable increased $25,000 and accounts payable decreased $23,000. Instructions Compute net cash provided by operating activities using the indirect method.

In preparing a statement of cash flows, increases in the Common Stock and Treasury Stock accounts during a period would be investing activities.

If accounts payable have increased during a period,

Significant noncash transactions would not include

The operating activities section of the statement of cash flows may be prepared using the ______________ method or the ______________ method.