Exam 12: Statement of Cash Flows

If a gain of $45,000 is incurred in selling (for cash) office equipment having a book value of $180,000, the total amount reported in the cash flows from investing activities section of the statement of cash flows is

Using the indirect method, which of the following adjustments to convert net income to net cash provided by operating activities is correct?

Using the following information, which company appears to be least solvent? (in \ Millions) Jones Company Parles Company Brady Company Chambers Company Cash provided by operating activities for 2014 140 295 110 200 Current liabilities for 2013 230 335 205 300 Current liabilities for 2014 280 375 240 360 Total liabilities for 2013 600 440 275 500 Total liabilities for 2014 720 530 325 540

If a loss of $27,000 is incurred in selling (for cash) office equipment having a book value of $200,000, the total amount reported in the cash flows from investing activities section of the statement of cash flows is

The cash ______________ is a measure of solvency that uses cash figures.

Authentic Exposure Company had the following transactions that took place during the year: I. Recorded credit sales of $2,500 II) Collected $1,500 owning from customers III) Recorded sales returns of $500 and credited the customer's account. What is the total effect of these transactions on Free Cash Flow, Current Cash Debt Coverage, and Cash Debt Coverage, respectively?

Free cash flow provides an indication of a company's ability to

The comparative balance sheets for Russell Company appear below: Additional information: 1. Net income for the year ending December 31, 2014, was $30,000. 2. Cash dividends of $12,000 were declared and paid during the year. 3. Stock investments that had a book value of $18,000 were sold for $13,000. 4. Sales for 2014 are $130,000. Instructions 1. Prepare a statement of cash flows for the year ended December 31, 2014, using the indirect method. 2. Compute the following cash based ratios: a. Current cash debt coverage b. Cash debt coverage

The income statement of Gise Company is shown below: Additional information: 1. Accounts receivable increased $600,000 during the year. 2. Inventory increased $250,000 during the year. 3. Prepaid expenses increased $150,000 during the year. 4. Accounts payable to merchandise suppliers increased $125,000 during the year. 5. Accrued expenses payable increased $180,000 during the year. Instructions Prepare the operating activities section of the statement of cash flows for the year ended December 31, 2014, for Gise Company, using the direct method.

Cash receipts from customers are greater than sales revenues when there is a(n)

Net cash provided/used by operating activities can be determined using the ____________ method or the ______________ method.

Cash from operations and net income are approximately the same during the

When equipment is sold for cash, the amount received is reflected as a cash

The acquisition of a building by issuing bonds would be considered an investing and financing activity that did not affect cash.

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

Use the following information to perform the calculations below (using the indirect method). Clearly label the amount of each answer as positive or negative and show all your calculations. Net income \ 401,000 Beginning accounts payable \ 119,000 Depreciation expense 97,000 Ending accounts payable 146,000 Beginning accounts receivable 420,000 Purchase of long-term assets 612,000 Ending accounts receivable 439,000 Issuance of long-term debt 220,000 Beginning inventory 516,000 Issuance of stock for cash 180,000 Ending inventory 550,000 Issuance of stock for long-term assets 110,000 Beginning prepaid insurance 42,000 Purchase of treasury stock 64,000 Ending prepaid insurance 48,000 Sale of long-term investment at cost 56,000 a. Calculate the amount of cash flows from operating activities. _____________ b. Calculate the amount of cash flows from investing activities. _____________ c. Calculate the amount of cash flows from financing activities. _____________ d. Calculate the net change in cash. _____________

Starting with net income and adjusting it for items that affected reported net income but which did not affect cash is called the

Information for two companies in the same industry, Tucker Corporation and Wiggins Corporation, is presented here. Instructions Using the cash-based measures presented in this chapter, compare the (a) liquidity and (b) solvency of the two companies.

If accounts payable have increased during a period

Investing activities include