Exam 12: Statement of Cash Flows

Which of the following activities would be classified as an investing activity?

Under IFRS, the cash flow statement can be prepared using

The statement of cash flows will not report the

A primary objective of the statement of cash flows is to show the income or loss on investing and financing transactions.

Assume that the E-Zip Corporation uses the indirect method to depict cash flows. Indicate where, if at all, land and building purchased with a mortgage would be classified on the statement of cash flows.

A company had net income of $990,000. Depreciation expense is $110,000. During the year, accounts receivable and inventory increased $60,000 and $160,000, respectively. Prepaid expenses and accounts payable decreased $8,000 and $16,000, respectively. There was also a loss on the sale of equipment of $12,000. How much cash was provided by operating activities?

How is it possible for a company to suffer a net loss for a given year, yet produce a positive net cash flow from operating activities?

The primary purpose of the statement of cash flows is to

Using the indirect method, patent amortization expense for the period

Westwind Corporation shows income tax expense of $180,000. There has been a $20,000 decrease in federal income taxes payable and a $28,000 increase in state income taxes payable during the year. Using the direct method of reporting cash flows from operating activities, what was Westwind 's cash payment for income taxes?

The net income reported on the income statement for the current year was $440,000. Depreciation was $62,000. Accounts receivable and inventories decreased by $20,000 and $32,000, respectively. Prepaid expenses and accounts payable increased, respectively, by $2,000 and $16,000. How much cash was provided by operating activities?

The following information is available for Chenard Corporation for the year ended December 31, 2014. Beginning cash balance 35,000 Accounts payable decrease 3,200 Depreciation expense 76,000 Accounts receivable increase 8,200 Inventory increase 13,000 Net income 269,100 Cash received for sale of land at bookvalue 35,000 Sales revenue 747,000 Cash dividends paid 12,000 Income taxpayable increase 4,700 Cash used to purchase building 144,000 Cash used to purchase treasury stock 32,000 Cash received from issuing bonds 206,000 Instructions Prepare a statement of cash flows using the indirect method.

In preparing the statement of cash flows, determining the net increase or decrease in cash requires the use of

A company had net income of $242,000. Depreciation expense is $26,000. During the year, accounts receivable and inventory increased $15,000 and $40,000, respectively. Prepaid expenses and accounts payable decreased $2,000 and $14,000, respectively. There was also a loss on the sale of equipment of $17,000. How much cash was provided by operating activities?

If a gain of $13,500 is incurred in selling (for cash) office equipment having a book value of $100,000, the total amount reported in the cash flows from investing activities section of the statement of cash flows is

Financing activities involve

For external reporting, a company must prepare either an income statement or a statement of cash flows, but not both.

The activity from the balance sheet to be presented in the financing activities section of the statement of cash flows is based on an analysis of stockholders' equity only.

The income statement for McDonald's Corporation shows cost of goods sold $6,175.6 million and operating expenses (including depreciation expense of $1,214.1 million) $18,907.6 million. The comparative balance sheet for the year shows that inventory increased $12.9 million, prepaid expenses increased $102.9 million, accounts payable (merchandise suppliers) decreased $44.6 million, and accrued expenses payable increased $162.4 million. Instructions Using the direct method, compute (a) cash payments to suppliers and (b) cash payments for operating expenses.