Exam 21: Statement of Cash Flows

Identify each of the following transactions as an operating activity (O), an investing activity (I), a financing activity (F), or a transaction that is not reported on the statement of cash flows (N). a) ________ Decrease of supplies b) ________ Decrease of accounts payable c) ________ Declaration of cash dividends d) ________ Purchase of building for cash e) ________ Increase of accounts receivable f) ________ Sold plant equipment for cash g) ________ Borrowed money from a bank h) ________ Payment on principal of a note

The following information is given for Sunny Corporation: The indirect method is used. The beginning Cash balance is $23,000. Required: Answer the following questions with the information provided above. a) The cash flow from operating activities is ________. b) The cash flow from investing activities is ________. c) The cash flow from financing activities is ________. d) The net change in cash is ________. e) The ending balance of cash is ________.

The Accounts Payable balance has increased during the year. How would this event affect the statement of cash flows operations section-indirect method?

Issuing Treasury Stock is considered an investing activity.

Under the direct method, each line of the balance sheet is converted to cash paid or received.

Transactions involving the purchase and sale of fixed assets would be considered:

Which would go into the operating activities section of a statement of cash flows using the direct method?

If $31,000 net cash was used in operations, $12,000 was used for investing activities, and $25,000 was provided by financing activities, the cash balance would:

If there is a Prepaid Insurance increase of $550,000, this would be added to insurance expense.

For each of the following items, indicate (by placing an X) whether the item would be found on the statement of cash flows in column 1, the direct approach for determining the cash flows from operating activities, column 2, the indirect approach for determining the cash flows from operating activities, column 3, cash flows from investing activities, column 4, cash flows from financing activities. If you identify that an item affects the cash flows from operation, indirect method, also indicate whether it will be increasing (+) or decreasing (-) the cash flows. -

The records of Billie's Surfboards showed a purchase of equipment in the amount of $24,800; sale of equipment in the amount of $14,900; and a purchase of land in the amount of $30,500. The amount of Net Cash Flow from Investing Activities using the indirect method is:

If a company issues a comparative balance sheet showing the change in the cash balance, a statement of cash flows is needed.

For each of the following items, indicate (by placing an X) whether the item would be found on the statement of cash flows in column 1, the direct approach for determining the cash flows from operating activities, column 2, the indirect approach for determining the cash flows from operating activities, column 3, cash flows from investing activities, column 4, cash flows from financing activities. If you identify that an item affects the cash flows from operation, indirect method, also indicate whether it will be increasing (+) or decreasing (-) the cash flows. -

Which of the following items would be subtracted from Net Income to compute Net Cash Flow from Operating Activities under the indirect method?

If Cost of Goods Sold was $25,000, there was a decrease in Inventory of $5,000, and an increase in Accounts Payable of $5,700, what would be the cash amount paid for Merchandise Inventory?

If $38,000 was generated in sales and there was an increase to Accounts Receivable of $3,100, what would be the cash amount received from customers?

The purpose of a cash flow statement is to show the outflows of cash only.

An example of operating activities is Accounts Receivable.

If a loss of $80,000 is incurred in selling equipment having a book value of $220,000, cash flow will increase: