Exam 14: Statement of Cash Flows

The comparative balance sheet of ConnieJo Company, for December 31, Years 1 and 2 ended December 31 appears below in condensed form: Additional data for the current year are as follows: a) Fully depreciated equipment costing $39,000 was scrapped, no salvage, and equipment was purchased for $157,000. b) Bonds payable for $100,000 were retired by payment at their face amount. c) 5,000 shares of common stock were issued at $15 for cash. d) Cash dividends declared were paid $28,000. e) All sales are on account. Prepare a statement of cash flows, using the direct method of reporting cash flows from operating activities.

Cash flows from financing activities, as part of the statement of cash flows, would include any payments for dividends.

There is no difference in the investing and financing sections of the statement of cash flows using the indirect and direct method.

Rarely will the cash flows from operating activities, as reported on the statement of cash flows, be the same as the net income reported on the income statement.

The following information is available from the current period financial statements: Net income $165,000 Depreciation expense 28,000 Increase in accounts receivable 16,000 Decrease in accounts payable 21,000 The net cash flow from operating activities using the indirect method is

Which of the following is a noncash investing and financing activity?

Identify the section of the statement of cash flows a-d) where each of the following items would be reported. -Issuance of bond payable