Exam 12: Statement of Cash Flows

The statement of cash flows classifies cash receipts and cash payments into two categories: operating activities and nonoperating activities.

The income statement of Reagan Inc. for the year ended December 31, 2017, reported the following condensed information: Reagan has no depreciable assets. Accounts payable pertains to operating expenses. Instructions Prepare the operating activities section of the statement of cash flows using the direct method.

Financing activities involve

Planner Corporation's comparative balance sheets are presented below. Additional information: 1. Net income was $27,900. Dividends declared and paid were $22,500. 2. All other changes in noncurrent account balances had a direct effect on cash flows, except the change in accumulated depreciation. The land was sold for $5,900. Instruction (a) Prepare a statement of cash flows for 2017 using the indirect method. (b) Compute free cash flow.

The following information is available for Sally Corporation for the year ended December 31, 2017: Collection of principal on long-term loan to a supplier \ 15,000 Acquisition of equipment for cash 10,000 Proceeds from the sale of long-term investment at book value 20,000 Issuance of common stock for cash 27,000 Depreciation expense 28,000 Redemption of bonds payable at carrying (book) value 35,000 Payment of cash dividends 15,000 Net income 25,000 Purchase of land by issuing bonds pavable 45,000 In addition, the following information is available from the comparative balance sheet for Sally at the end of 2016 and 2017: Instructions Prepare Sally's statement of cash flows for the year ended December 31, 2017 using the indirect method.

A measure that describes the cash remaining from operations after adjustment for capital expenditures and dividends is

Which of the following adjustments to convert net income to net cash provided by operating activities is correct?

A comparative balance sheet for Halpern Corporation is presented below: Additional information: 1. Net loss for 2017 is $20,000. 2. Cash dividends of $14,000 were declared and paid in 2017. 3. Land was sold for cash at a loss of $4,000. This was the only land transaction during the year. 4. Equipment with a cost of $15,000 and accumulated depreciation of $10,000 was sold for $5,000 cash. 5. $22,000 of bonds were retired during the year at carrying (book) value. 6. Equipment was acquired for common stock. The fair value of the stock at the time of the exchange was $25,000. Instructions Prepare a statement of cash flows for the year ended 2017, using the indirect method.

Which of the following steps is not required in preparing the statement of cash flows?

A statement of cash flows indicates the sources and uses of cash during a period.

Using the indirect method, patent amortization expense for the period

A statement of cash flows summarizes the operating, ____________, and ___________ activities of an entity.

Pare Company reported a net loss of $30,000 for the year ended December 31, 2017. During the year, accounts receivable decreased $15,000, inventory increased $25,000, accounts payable increased by $30,000, and depreciation expense of $20,000 was recorded. During 2017, operating activities

Each of the following would be reported under operating activities except cash receipts

Towson Company prepared the tabulation below at December 31, 2017. Instructions Show how each item should be reported in the statement of cash flows. Use parentheses for deductions.

Of the items below, the one that appears first on the statement of cash flows is

Indicate where the purchase of land for cash would appear, if at all, on the indirect statement of cash flows.

Operating expenses + an increase in prepaid expenses - a decrease in accrued expenses payable = cash payments for operating expenses.

Garton Company had net income of $195,000 in 2017. Depreciation expense for the year is $50,000. During the year, Accounts Receivable increased $8,000 and Prepaid Expenses decreased $1,000. The company also sold equipment at a loss of $3,000. Instructions Calculate net cash flows from operating activities using the indirect method.

Dredd Company has begun a worksheet for preparing a statement of cash flows. The following additional information is provided: 1. Cash dividends of $8,000 were paid during the year. 2. Land which originally cost $60,000 was sold for $52,000. 3. Common stock was issued at par value for cash. Instructions Complete the worksheet for Dredd Company.