Exam 17: Statement of Cash Flows

Which of the following adjustments to convert net income to net cash provided by operating activities is incorrect? Add to Net Income Deduct from Net Income A) Accounts Receivable decrease increase B) Prepaid Expenses increase decrease C) Inventory decrease increase D) Accounts Payable increase decrease

Pare Company reported a net loss of $30000 for the year ended December 31 2016. During the year accounts receivable decreased $15000 merchandise inventory increased $25000 accounts payable increased by $30000 and depreciation expense of $20000 was recorded. During 2016 operating activities

Ware Company had purchases of $260000. The comparative balance sheet analysis revealed a $15000 decrease in inventory and a $25000 increase in accounts payable. What were Ware's cash payments to suppliers?

In calculating cash flows from operating activities using the indirect method a gain on the sale of equipment is

Plough Company reported net income of $180000 for the current year. Depreciation recorded on buildings and equipment amounted to $80000 for the year. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year Cash \ 20,000 \ 15,000 Accounts receivable 24,000 32,000 Inventories 50,000 65,000 Prepaid expenses 9,500 5,000 Accounts payable 12,000 18,000 Income taxes payable 1,600 1,200 Instructions Prepare the cash flows from the operating activities section of the statement of cash flows using the indirect method.

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

The net income reported on the income statement for the current year was $245000. Depreciation was $40000. Account receivable and inventories decreased by $12000 and $35000 respectively. Prepaid expenses and accounts payable increased respectively by $1000 and $8000. How much cash was provided by operating activities?

Identify several alternatives for presenting significant noncash activities in financial statements. (b) Give three examples of significant noncash transactions.

Financial statement readers can determine future investing and financing transactions by examining a company's statement of cash flows.

Which of the following would not appear in the operating activities section of a statement of cash flows prepared under the direct method?

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

Jean's Vegetable Market had the following transactions during 2016: 1) Issued $50000 of par value common stock for cash. 2) Repaid a 6 year note payable in the amount of $22000. 3) Acquired land by issuing common stock of par value $50000. 4) Declared and paid a cash dividend of $7000. 5) Sold a long-term investment (cost $3000) for cash of $6000. 6) Acquired an investment in IBM stock for cash of $10000. What is the net cash provided by financing activities?

Condensed financial data of Drake Company appear below: Additional information: 1. New plant assets costing $100000 were purchased for cash in 2017. 2. Old plant assets costing $25000 were sold for $10000 cash when book value was $13000. 3. Bonds with a face value of $40000 were converted into $40000 of common stock. 4. A cash dividend of $15000 was declared and paid during the year. 5. Accounts payable pertain to merchandise purchases. Instructions Prepare a statement of cash flows for the year using the direct method.

Which of the following would not be an adjustment to net income using the indirect method?

If a company reports a net loss it

The three accounts shown below appear in the general ledger of Lawson Corp. during 2016. Instructions From the postings in the accounts indicate how the information is reported on a statement of cash flows using the indirect method. The loss on sale of equipment was $7000. (Hint: Cost of equipment constructed is reported in the investing activities section as a decrease in cash of $56000.)

Lager Company has other operating expenses of $260000. There has been an increase in prepaid expenses of $20000 during the year and accrued liabilities are $15000 lower than in the prior period. Using the direct method of reporting cash flows from operating activities what were Lager's cash payments for operating expenses?

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

LRRP Company had credit sales of $650000. The beginning accounts receivable balance was $15000 and the ending accounts receivable balance was $140000. What were the cash collections from customers during the period?