Exam 23: Statement of Cash Flows

anthe Corporation had the following transactions occur in the current year:1. Cash sale of merchandise inventory. 2. Sale of delivery truck at book value. 3. Sale of Xanthe common stock for cash. 4. Issuance of a note payable to a bank for cash. 5. Sale of a security held as an available-for-sale investment. 6. Collection of loan receivable.

Under IFRS, companies are not required to prepare a statement of cash flows if the transactions are reported elsewhere in the financial statements.

Classification of cash flows.Note that X in the following statement of cash flows identifies a dollar amount and the letters (A) through (F) identify specific items which appear in the major sections of the statement prepared using the indirect method. InstructionsFor each of the following items, indicate by letter in the blank spaces below, the section or sections where the effect would be reported. Use the code (A through F) from above. If the item is not required to be reported on the statement of cash flows, write the word "none" in the blank. Assume that generally accepted accounting principles have been followed in determining net income and that there are no short-term securities which are considered cash equivalents. 1. After the retirement of an officer, the insurance policy was canceled, and a cash settlement was received by the firm. These proceeds were in excess of the book value of the policy. 2. Sales discounts lapsed and not taken by customers. (Sales are recorded at net originally.) 3. Accrued estimated income taxes for the period. These taxes will be paid next year. 4. Amortization of premium on bonds payable. 5. Premium amortized on investment in bonds. 6. The book value of trading securities was reduced to fair value. 7. Purchase of available-for-sale securities. 8. Declaration of stock dividends (not yet issued). 9. Issued preferred stock in exchange for equipment. 10. Bad debts (under allowance method) estimated and recorded for the period (receivables classified as current). 11. Gain on disposal of old machinery. 12. Payment of cash dividends (previously declared in a prior period). 13. Trading securities are sold at a loss. 14. Two-year notes issued at discount for a patent. 15. Amortization of Discount on Notes Receivable (long-term). 16. Decrease in Retained Earnings Appropriated for Self-insurance.

Use the following information for questions 51 through 55. Harlan Mining Co. has recently decided to go public and has hired you as an independent CPA. One statement that the enterprise is anxious to have prepared is a statement of cash flows. Financial statements of Harlan Mining Co. for 2015 and 2014 are provided below. The following additional data were provided: 1. Dividends for the year 2015 were $144,000. 2. During the year, equipment was sold for $180,000. This equipment cost $264,000 originally and had a book value of $216,000 at the time of sale. The loss on sale was incorrectly charged to cost of sales. 3. All depreciation expense is in the selling expense category. -The net cash provided (used) by financing activities is

When preparing a statement of cash flows (indirect method), an increase in ending inventory over beginning inventory will result in an adjustment to reported net earnings because

Which of the following would be classified as a financing activity on a statement of cash flows?

IFRS requires that noncash investing and financing activities be excluded from the statement of cash flows.

Use the following information for questions 106 through 108. Jamison Corp.'s balance sheet accounts as of December 31, 2015 and 2014 and information relating to 2015 activities are presented below. Information relating to 2015 activities: $\bullet$ Net income for 2015 was $1,300,000. $\bullet$ Cash dividends of $400,000 were declared and paid in 2015. $\bullet$ Equipment costing $1,000,000 and having a carrying amount of $320,000 was sold in 2015 for $360,000. $\bullet$ A long-term investment was sold in 2015 for $320,000. There were no other transactions affecting long-term investments in 2015. $\bullet$ 20,000 shares of common stock were issued in 2015 for $25 a share. $\bullet$ Short-term investments consist of treasury bills maturing on 6/30/16. -Net cash provided by Jamison's 2015 operating activities was

Cashman Company reported net income of $265,000 for the year ended 12/31/15. Included in the computation of net income were: depreciation expense, $45,000; amortization of a patent, $24,000; income from an investment in common stock of Linda Inc., accounted for under the equity method, $36,000; and amortization of a bond premium, $9,000. Cashman also paid a $60,000 dividend during the year. The net cash provided by operating activities would be reported at

Declaration of a cash dividend on common stock affects cash flows from operating activities under the direct and indirect methods as follows:

How should significant noncash transactions be reported in the statement of cash flows according to FASB Statement No. 95?

Use the following information for questions 111 and 112. A company acquired a building, paying a portion of the purchase price in cash and issuing a mortgage note payable to the seller for the balance. -In a statement of cash flows, what amount is included in financing activities for the above transaction?

Net cash flow from operating activities for 2015 for Graham Corporation was $330,000. The following items are reported on the financial statements for 2015: Depreciation and amortization \ 20,000 Cash dividends paid on common stock 12,000 Increase in accounts receivable 24,000 Based only on the information above, Graham's net income for 2015 was:

The net changes in the balance sheet accounts of Eusey, Inc. for the year 2015 are shown below: Additional information: 2. Cash dividends of $128,000 were declared December 15, 2015, payable January 15, 2016. A 5% stock dividend was issued March 31, 2015, when the market value was $22.00 per share.3. The long-term investments were sold for $140,000.4. A building and land which cost $480,000 and had a book value of $350,000 were sold for $400,000. The cost of the land, included in the cost and book value above, was $20,000. 6. A fully depreciated copier machine which cost $28,000 was written off.7. Preferred stock of $60,000 par value was redeemed for $80,000.8. The company sold 12,000 shares of its common stock ($10 par) on June 15, 2015 for $25 a share. There were 87,600 shares outstanding on December 31, 2015.9. Bonds were sold at 104 on December 31, 2015."10. Land that was condemned had a book value of $240,000. InstructionsPrepare a statement of cash flows (indirect method). Ignore tax effects."

In reporting extraordinary transactions on a statement of cash flows (indirect method), the

What amount of cash was collected from 2015 accounts receivable?

Use the following information for questions 63 through 67. Financial statements for Kiner Company are given below: Total assets on the balance sheet at December 31, 2015 are $4,432,000. Accumulated deprecia-tion on the equipment sold was $224,000. -The balance in the Retained Earnings account at December 31, 2015 was

Use the following information for questions 63 through 67. Financial statements for Kiner Company are given below: Total assets on the balance sheet at December 31, 2015 are $4,432,000. Accumulated deprecia-tion on the equipment sold was $224,000. -The accounts payable at December 31, 2015 were

Use the following information for questions 98 and 99. Fleming Company provided the following information on selected transactions during 2015: Dividends paid to preferred stockholders 250,000 Loans made to affiliated corporations 700,000 Proceeds from issuing bonds 800,000 Proceeds from issuing preferred stock 1,050,000 Proceeds from sale of equipment 400,000 Purchases of inventories 1,200,000 Purchase of land by issuing bonds 300,000 Purchases of treasury stock 600,000 -The net cash provided (used) by financing activities during 2015 is

Foxx Corp.'s comparative balance sheet at December 31, 2015 and 2014 reported accumulated depreciation balances of $830,000 and $600,000, respectively. Property with a cost of $50,000 and a carrying amount of $38,000 was the only property sold in 2015. Depreciation charged to operations in 2015 was