Exam 21: The Statement of Cash Flows

Because the statement of cash flows only reflects the cash flows from operating, investing, and financing activities, certain noncash transactions are omitted from the body of the statement. Required: Identify the types of activities that are not included in the body of the statement of cash flows, describe the types of transactions involved, and indicate where these items are disclosed on the statement.

The visual inspection method is used when a company has simple financial statements and when the relationships between the changes in account balances can be easily analyzed.

Which of the following statements is true regarding GAAP and reporting operating activities on the statement of cash flows?

The IFRS categories of cash flows are

The following is a list of items to be included in the 2016 statement of cash flows for the Winter Company: Required: Prepare the 2016 statement of cash flows using the visual method.

A company's unearned rental revenue account increases from the beginning to the end of the year. In the statement of cash flows using the direct method, the cash collected from tenants would be

The statement of cash flows classifies cash inflows and outflows into three different activities: operating, investing, and financing. Required: Describe the types of transactions that would be included under each of those three activities.

What are the four steps necessary to prepare the spreadsheet and its statement of cash flows?

Angel Heating Co. reported $27,000 of net income. The company uses the visual inspection method to complete the statement of cash flows. Additional information is listed below: The net cash provided by operating activities was

In a statement of cash flows, increases or decreases in noncurrent assets are most closely associated with

In a statement of cash flows prepared by the indirect method, which of the following events would be added to net income?

When reading the Cash Inflows from Operating Activities portion of the statement of cash flows using the direct method, you would expect to find which of the following? I. Collections from customers II) Interest and dividends collected III) Other operating receipts IV) Receipts from shareholders

The following information relates to the Joshua, Inc: What is the net cash provided by operating activities?

Under IFRS, a company is allowed to report dividends and interest received as either an operating or a financing cash inflow.

Selected accounting information for the Zebra Company for 2016 follows: Required: Prepare the 2016 Net Cash Flow from Operating Activities section of Zebra's statement of cash flows, using the indirect method.

According to current GAAP, cash flow per share statistics

On the statement of cash flows prepared using the direct method, cash from customers would be computed as sales plus

The visual inspection method does not provide supporting documentation for the statement of cash flows due to its simplistic nature.

One area of difference between GAAP and IFRS cash flow reporting is the

Exhibit 21-3 The Travis Company uses the spreadsheet method for completing the statement of cash flows. The balance sheet accounts and other information related to those accounts are presented below for Travis Company: Additional information related to 2017 activities: Additional information related to 2017 activities: 1. Net loss for 2017 was $40,000. 2. Cash dividends of $12,000 were declared and paid in 2017. 3. 4,000 shares of common stock were issued to bondholders converting bonds payable into common stock. 4. A long-term investment was sold for $100,000 cash. 5. Equipment costing $100,000 and having accumulated depreciation of $30,000 was sold for $50,000 cash. -Refer to Exhibit 21-3. Net cash provided used) in the financing activities section of Travis's 2017 statement of cash flows was