Exam 17: Statement of Cash Flows

Which of the following adjustments to convert net income to net cash provided by operating activities is correct?

During 2010, Unruh Company had $160,000 in cash sales and $1,200,000 in credit sales. The accounts receivable balances were $180,000 and $212,000 at December 31, 2009 and 2010, respectively. Using the direct method of reporting cash flows from operating activities, what was the total cash collected from all customers during 2010?

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

Noncash investing and financing activities must be reported in the body of a statement of cash flows.

If $250,000 of bonds are issued during the year but $100,000 of old bonds are retired during the year, the statement of cash flows will show a(n)

Which of the following characteristics does not apply to cash equivalents?

Assume the indirect method is used to compute cash flows from operations. For each item listed below, indicate the effect on net income in arriving at cash flows from operations by choosing one of the following code letters. 1. Increase in accounts receivable 2. Increase in inventory 3. Decrease in prepaid expenses 4. Decrease in accounts payable 5. Increase in accrued liabilities 6. Increase in income taxes payable 7. Depreciation expense 8. Loss on sale of investment 9. Gain on disposal of equipment 10. Amortization expense

If a gain of $15,000 is incurred in selling (for cash) office equipment having a book value of $100,000, the total amount reported in the cash flows from investing activities section of the statement of cash flows is

During 2010, Klugman Industries reported cash provided by operations of $690,000, cash used in investing of $1,029,000, and cash used in financing of $135,000. In addition, cash spent for fixed assets during the period was $414,000. No dividends were paid. Based on this information, what was Klugman's free cash flow?

The acquisition of land by issuing common stock is

Cash receipts from interest and dividends are classified as

The sale of land for cash would be classified as a cash inflow from an investing activity.

In preparing a statement of cash flows, a conversion of bonds into common stock will be reported in

A statement of cash flows summarizes the operating, ____________, and ___________ activities of an entity.

During the year, Salaries Payable decreased by $6,000. If Salary Expense amounted to $170,000 for the year, the cash paid to employees (including deductions from gross pay) is

Hiller Company had total operating expenses of $155,000 in 2010, which included Depreciation Expense of $25,000. Also during 2010, prepaid expenses decreased by $9,000 and accrued expenses increased by $7,500. Instructions Calculate the amount of cash payments for operating expenses in 2010 using the direct method.

The adjusted trial balance is the only item needed to prepare the Statement of Cash Flows.

Accounts receivable arising from sales to customers amounted to $80,000 and $70,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $280,000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows is

Meyer Company reported net income of $70,000 for the year. During the year, accounts receivable increased by $7,000, accounts payable decreased by $3,000 and depreciation expense of $5,000 was recorded. Net cash provided by operating activities for the year is

The following information is available for Greer Corporation for the year ended December 31, 2010: In addition, the following information is available from the comparative balance sheet for Greer at the end of 2009 and 2010: Instructions Prepare Greer's statement of cash flows for the year ended December 31, 2010 using the indirect method.