Exam 13: Financial Analysis: the Big Picture

Adama Company reported a net loss of $6,000 for the year ended December 31, 2017.During the year, accounts receivable increased $15,000, merchandise inventory decreased $12,000, accounts payable decreased by $20,000, and depreciation expense of $12,000 was recorded.During 2017, operating activities

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

Cash provided by operating activities fails to take into account that a company must invest in new fixed assets just to maintain its current level of operations.

The statement of cash flows classifies cash receipts and payments as operating, nonoperating, financial, and extraordinary 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 calculating net cash provided by operating activities using the indirect method, an increase in prepaid expenses during a period is

LRRP Company had credit sales of $650,000.The beginning accounts receivable balance was $15,000 and the ending accounts receivable balance was $140,000.What were the cash collections from customers during the period?

The cash effects of transactions that create revenues and expenses are

The net income reported on the income statement for the current year was $245,000.Depreciation was $40,000.Account receivable and inventories decreased by $12,000 and $35,000, respectively.Prepaid expenses and accounts payable increased, respectively, by $1,000 and $8,000.How much cash was provided by operating activities?

Cash provided by operations is generally equal to operating income.

Tomas Pest Control Products has the following information available: Net Income \ 25,000 Cash Provided by Operations 33,000 Cash Sales 65,000 Capital Expenditures 10,000 Dividends Paid 2,000 What is Tomas' free cash flow?

Which of the following would be subtracted from net income using the indirect method?

In Lynne Company, there was an increase in the land account during the year of $43,000.Analysis reveals that the change resulted from a cash sale of land at cost $115,000, and a cash purchase of land for $158,000.In the statement of cash flows, the change in the land account should be reported in the investment section:

If a company reports a net loss, it

Under the direct method, the formula for computing cash collections from customers is sales revenues plus the increase in accounts receivable or minus the decrease in accounts receivable.

Rubble Company reported net income of $70,000 for the year.During the year, accounts receivable increased by $6,000, accounts payable decreased by $5,000 and depreciation expense of $8,000 was recorded.Net cash provided by operating activities for the year is

Ale Company has other operating expenses of $80,000.There has been a decrease in prepaid expenses of $6,000 during the year, and accrued liabilities are $5,000 larger than in the prior period.What were Ale's cash payments for operating expenses?

Generally, the most important category on the statement of cash flows is cash flows from

In the Buans Company, land decreased $80,000 because of a cash sale for $80,000, the equipment account increased $35,000 as a result of a cash purchase, and Bonds Payable increased $60,000 from an issuance for cash at face value.The net cash provided by investing activities is

Each of the following is added to net income in computing net cash provided by operating activities except