Question 1

Each of the following is an example of a significant noncash activity except

Accepted Answer

A)  conversion of bonds into common stock. 
B)  exchanges of plant assets. 
C)  issuance of debt to purchase assets. 
D)  stock dividends. 
A)  conversion of bonds into common stock. 
B)  exchanges of plant assets. 
C)  issuance of debt to purchase assets. 
D)  stock dividends.

Question 2

The following data are available for Springer Corporation.
Net cash provided by operating activities is:

Accepted Answer

A)  $240,000. 
B)  $330,000. 
C)  $360,000. 
D)  $420,000. 
A)  $240,000. 
B)  $330,000. 
C)  $360,000. 
D)  $420,000.

Question 3

Under the direct method, the two largest classes of items in the operating activities section for a merchandising company are cash ________________________ and cash _________________________.

Accepted Answer

receipts f

Question 4

When listing accounts in the statement of cash flows worksheet, the accumulated depreciation account is shown

Accepted Answer

A)  with accounts that have credit balances. 
B)  with accounts that have debit balances. 
C)  as a credit under the reconciling items. 
D)  as a debit under the reconciling items. 
A)  with accounts that have credit balances. 
B)  with accounts that have debit balances. 
C)  as a credit under the reconciling items. 
D)  as a debit under the reconciling items.

Question 5

Dolan Company's income statement showed revenues of $230,000 and operating expenses of $150,000. Accounts receivable decreased by $60,000 and accounts payable increased by $40,000 during the year.
Instructions
Compute (a) cash receipts from customers and (b) cash payments for operating expenses using the direct method.

Accepted Answer

(a) Cash receipts from custome

Question 6

The current sections of Robertson Inc.'s balance sheets at December 31, 2009 and 2010, are presented here.
Robertson's net income for 2010 was $203,000. Depreciation expense was $24,000.   
Instructions
Prepare the net cash provided by operating activities section of the company's statement of cash flows for the year ended December 31, 2010, using the indirect method.

Accepted Answer

The answer of The current sections of Robertson Inc.'s balance...

Question 7

In preparing a statement of cash flows, cash equivalents are subtracted from cash in order to compute the net change in cash during a period.

Accepted Answer

A) True 
 B)False

Question 8

The receipt of dividends from long-term investments in stock is classified as a cash inflow from investing activities.

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

A)  sale proceeds received are deducted in the operating activities section. 
B)  sale proceeds received are added in the operating activities section. 
C)  amount of the gain is added in the operating activities section. 
D)  amount of the gain is deducted in the operating activities section. 
A)  sale proceeds received are deducted in the operating activities section. 
B)  sale proceeds received are added in the operating activities section. 
C)  amount of the gain is added in the operating activities section. 
D)  amount of the gain is deducted in the operating activities section.

Question 10

Distinguish among the three types of activities reported in the statement of cash flows
The three activities are:

Accepted Answer

Operating activities include the cash ef

Question 11

Joy Elle's Vegetable Market had the following transactions during 2010:
1) Issued $50,000 of par value common stock for cash.
2) Repaid a 6 year note payable in the amount of $22,000.
3) Acquired land by issuing common stock of par value $100,000.
4) Declared and paid a cash dividend of $2,000.
5) Sold a long-term investment (cost $63,000) for cash of $6,000.
6) Acquired an investment in IBM stock for cash of $12,000.
What is the net cash provided by financing activities?

Accepted Answer

A)  $26,000 
B)  $50,000 
C)  $28,000 
D)  $18,000 
A)  $26,000 
B)  $50,000 
C)  $28,000 
D)  $18,000

Question 12

Why is the statement of cash flows useful?

Accepted Answer

The statement of cash flows is useful be

Question 13

Mover Company issued common stock for proceeds of $19,000 during 2010. The company paid dividends of $2,000. The company also issued a long-term note payable for $30,000 in exchange for equipment during the year. The company sold treasury stock that had a cost of $2,000 for $4,000.
Instructions
Compute net cash flows from financing activities.

Accepted Answer

Net cash flows from

Question 14

Newman Corporation's comparative balance sheets are presented below.   
Additional information:
1. Net income was $15,300. Dividends declared and paid were $13,400.
2. Equipment which cost $10,000 and had accumulated depreciation of $2,200 was sold for $3,800.
3. All other changes in noncurrent account balances had a direct effect on cash flows, except the change in accumulated depreciation.
Instruction
(a) Prepare a statement of cash flows for 2010 using the indirect method.
(b) Compute free cash flow.

Accepted Answer

(a)
 @#IMG-DLM& (b)

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

Which of the following steps is not required in preparing the statement of cash flows?

Accepted Answer

A)  Determine the net change in cash. 
B)  Determine the net cash provided by operating activities. 
C)  Determine cash from investing and financing activities. 
D)  Determine the change in current assets. 
A)  Determine the net change in cash. 
B)  Determine the net cash provided by operating activities. 
C)  Determine cash from investing and financing activities. 
D)  Determine the change in current assets.

Question 17

Land acquired from the issuance of common stock is reported

Accepted Answer

A)  as a financing activity. 
B)  as an investing activity. 
C)  as an operating activity. 
D)  in a separate schedule at the bottom of the statement. 
A)  as a financing activity. 
B)  as an investing activity. 
C)  as an operating activity. 
D)  in a separate schedule at the bottom of the statement.

Question 18

In the Freyfogle Company, land decreased $75,000 because of a cash sale for $75,000, the equipment account increased $20,000 as a result of a cash purchase, and Bonds Payable increased $70,000 from an issuance for cash at face value. The net cash provided by investing activities is

Accepted Answer

A)  $75,000. 
B)  $125,000. 
C)  $55,000. 
D)  $50,000. 
A)  $75,000. 
B)  $125,000. 
C)  $55,000. 
D)  $50,000.

Question 19

Largo Company has other operating expenses of $75,000. There has been a decrease in prepaid expenses of $4,000 during the year, and accrued liabilities are $6,000 larger than in the prior period. What were Largo's cash payments for operating expenses?

Accepted Answer

A)  $77,000 
B)  $73,000 
C)  $65,000 
D)  $75,000 
A)  $77,000 
B)  $73,000 
C)  $65,000 
D)  $75,000

Question 20

To determine the net cash provided (used) by operating activities, it is necessary to analyze

Accepted Answer

A)  the current year's income statement. 
B)  a comparative balance sheet. 
C)  additional information. 
D)  all of these. 
A)  the current year's income statement. 
B)  a comparative balance sheet. 
C)  additional information. 
D)  all of these.

Exam 17: Statement of Cash Flows

Each of the following is an example of a significant noncash activity except

The following data are available for Springer Corporation. Net cash provided by operating activities is:

Under the direct method, the two largest classes of items in the operating activities section for a merchandising company are cash ________________________ and cash _________________________.

When listing accounts in the statement of cash flows worksheet, the accumulated depreciation account is shown

In preparing a statement of cash flows, cash equivalents are subtracted from cash in order to compute the net change in cash during a period.

The receipt of dividends from long-term investments in stock is classified as a cash inflow from investing activities.

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

Distinguish among the three types of activities reported in the statement of cash flows The three activities are:

Why is the statement of cash flows useful?

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

Which of the following steps is not required in preparing the statement of cash flows?

Land acquired from the issuance of common stock is reported

In the Freyfogle Company, land decreased $75,000 because of a cash sale for $75,000, the equipment account increased $20,000 as a result of a cash purchase, and Bonds Payable increased $70,000 from an issuance for cash at face value. The net cash provided by investing activities is

Largo Company has other operating expenses of $75,000. There has been a decrease in prepaid expenses of $4,000 during the year, and accrued liabilities are $6,000 larger than in the prior period. What were Largo's cash payments for operating expenses?

To determine the net cash provided (used) by operating activities, it is necessary to analyze

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Accounting Information Systems

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Corporations: Organization and Capital Stock Transactions

Corporations: Dividends, Retained Earnings, and Income Reporting

Long-Term Liabilities

Investments

Financial Analysis: the Big Picture

Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit

Incremental Analysis

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Filters

Under the direct method, the two largest classes of items in the operating activities section for a merchandising company are cash and cash _.