Exam 17: Statement of Cash Flows

The statement of cash flows should help investors and creditors assess each of the following except the

Using the indirect method an increase in accounts payable during a period is deducted from net income in calculating cash provided by operations.

A comparative balance sheet for Halpern Corporation is presented below: HALPERN CORPORATION Comparative Balance Sheet 2017 2016 Assets Cash \ 36,000 \ 31,000 Accounts receivable (net) 70,000 60,000 Prepaid insurance 25,000 17,000 Land 18,000 40,000 Equipment 70,000 60,000 Accumulated depreciation ) ) Total Assets Liabilities and Stockholders' Equity Accounts payable \ 11,000 000 Bonds payable 27,000 19,000 Common stock 140,000 115,000 Retained earnings 21,000 55,000 Total liabilities and stockholders' equity \ 199,000 \ 195,000 Additional information: 1. Net loss for 2017 is $20000. 2. Cash dividends of $14000 were declared and paid in 2017. 3. Land was sold for cash at a loss of $4000. This was the only land transaction during the year. 4. Equipment with a cost of $15000 and accumulated depreciation of $10000 was sold for $5000 cash. 5. $22000 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 $25000. Instructions Prepare a statement of cash flows for the year ended 2017 using the indirect method.

If a loss of $25000 is incurred in selling (for cash) office equipment having a book value of $90000 the total amount reported in the cash flows from investing activities section of the statement of cash flows is

Financing activities include the obtaining of cash from issuing debt and repaying the amounts borrowed.

The following data are available for Sampson Corporation. Net income \ 200,000 Depreciation expense 60,000 Dividends paid 90,000 Loss on sale of land 15,000 Decrease in accounts receivable 30,000 Decrease in accounts payable 45,000 Net cash provided by operating activities is:

During a period cost of goods sold + an increase in inventory + an increase in accounts payable = cash paid to suppliers.

The general ledger of Link Company provides the following information: End of Year Beginning of Year Accounts Receivable \ 55,000 \ 94,000 Inventory 310,000 210,000 Accounts Payable 40,000 65,000 The company's net sales for the year was $2200000 and cost of goods sold amounted to $1500000. Instructions Compute the following: (a) Cash receipts from customers. (b) Cash payments to suppliers.

During 2016 Harvey Industries reported cash provided by operations of $670000 cash used in investing of $1039000 and cash used in financing of $145000. In addition cash spent for fixed assets during the period was $404000. No dividends were paid. Based on this information what was Harvey's free cash flow?

Using the indirect method if equipment is sold at a gain the

Investing activities include

Selected transactions for the Ecker Company are listed below. 1. Collected accounts receivable. 2. Declared and paid dividends on common stock. 3. Sold long-term investments for cash. 4. Issued stock for equipment. 5. Repaid five year note payable. 6. Paid employee wages. 7. Converted bonds payable to common stock. 8. Acquired long-term investment with cash. 9. Sold buildings and equipment for cash. 10. Sold merchandise to customers. Instructions Classify each transaction as either (a) an operating activity (b) an investing activity (c) a financing activity or (d) a noncash investing and financing activity.

Rubble Company reported net income of $70000 for the year. During the year accounts receivable increased by $6000 accounts payable decreased by $5000 and depreciation expense of $8000 was recorded. Net cash provided by operating activities for the year is

The statement of cash flows will not provide insight into

Dredd Company has begun a worksheet for preparing a statement of cash flows. The following additional information is provided: 1. Cash dividends of $8000 were paid during the year. 2. Land which originally cost $60000 was sold for $52000. 3. Common stock was issued at par value for cash. Instructions Complete the worksheet for Dredd Company.

The following data are available for Two-off Company. Increase in accounts payable \ 120,000 Increase in bonds payable 300,000 Sale of investments 150,000 Issuance of common stock 160,000 Payment of cash dividends 90,000 Net cash provided by financing activities is:

The information in a statement of cash flows helps investors and creditors assess the company's ability to pay dividends and meet obligations.

Hogan Company uses the direct method in determining net cash provided by operating activities During the year operating expenses were $295000 prepaid expenses increased $23000 and accrued expenses payable increased $33000. Cash payments for operating expenses were

Garton Company had net income of $195000 in 2016. Depreciation expense for the year is $50000. During the year Accounts Receivable increased $8000 and Prepaid Expenses decreased $1000. The company also sold equipment at a loss of $3000. Instructions Calculate net cash flows from operating activities using the indirect method.

When a worksheet is used all but one of the following statements is correct. The incorrect statement is