Exam 12: Statement of Cash Flows

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

Zoum Corporation had the following transactions during 2014: 1) Issued $125,000 of par value common stock for cash. 2) Recorded and paid wages expense of $60,000. 3) Acquired land by issuing common stock of par value $50,000. 4) Declared and paid a cash dividend of $10,000. 5) Sold a long-term investment (cost $3,000) for cash of $3,000. 6) Recorded cash sales of $400,000. 7) Bought inventory for cash of $160,000. 8) Acquired an investment in Zynga stock for cash of $21,000. 9) Converted bonds payable to common stock in the amount of $500,000. 10) Repaid a 6 year note payable in the amount of $220,000. What is the net cash provided by investing activities?

Collections on accounts receivable will lag behind sales, and accrual sales during a period will exceed cash collections during the

Preferred stock issued in exchange for land would be reported in the statement of cash flows in

The growth phase of the product life cycle occurs when the company is purchasing fixed assets and beginning to produce and sell.

Anjili Company had credit sales of $1,400,000. The beginning accounts receivable balance was $165,000 and the ending accounts receivable balance was $280,000. Using the direct method of reporting cash flows from operating activities, what were the cash collections from customers during the period?

The primary purpose of the statement of cash flows is to provide information about a company's cash receipts and cash payments during an accounting period.

All of the following statements are true regarding cash flow presentations except

The current cash debt coverage is computed by dividing

Free cash flow is cash from operations less dividends.

Cash provided by operations is generally equal to operating income.

The issuance of debt to purchase assets would be classified as a(n)

Assume that the Quinn Corporation uses the indirect method to depict cash flows. Indicate where, if at all, income taxes paid would be classified on the statement of cash flows.

Why is the statement of cash flows useful?

Wave Rider Company completed its first year of operations on December 31, 2014. Its initial income statement showed that Wave Rider had revenues of $207,000 and operating expenses of $108,000. Accounts receivable and accounts payable at year-end were $80,000 and $28,000, respectively. Assume that accounts payable related to operating expenses. Ignore income taxes. Instructions Compute net cash provided by operating activities using the direct method.

The cash basis measure of liquidity is the cash debt coverage ratio.

Cash receipts from interest and dividends are classified as

Lacey Company prepared the tabulation below at December 31, 2014. Instructions Show how each item should be reported in the statement of cash flows. Use parentheses for deductions.

During 2014, Ecuyer Industries reported cash provided by operations of $397,000,000, cash used in investing of $343,000,000, and cash used in financing of $95,000,000. In addition, cash spent for fixed assets during the period was $138,000,000. Average current liabilities were $325,000,000 and average total liabilities were $858,000,000. No dividends were paid. Based on this information, what was Ecuyer's current cash debt coverage?

Accounts receivable arising from sales to customers amounted to $35,000 and $40,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $203,000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows is