Exam 16: The Cash Flow Statement

Under the direct method, when accounts receivable increase during the period, it means that less cash was collected from customers than was recorded as revenue by the company.

Upshaw Corporation prepared the tabulation below for the current year: Adjustments to reconcile profit to net cash provided by operating activities: Instructions Show how each item should be reported in the cash flow statement and the total cash provided (used) by operating activities prepared using the indirect method. Use parentheses for deductions.

Which of the following transactions does NOT affect cash during a period?

The acquisition of land by issuing common shares is

If accounts payable have increased during a period,

Killarney Holdings Ltd's comparative balance sheet at December 31, 2014 is presented below. Killarney's profit for the year was $88,510. Land was acquired for future expansion. Equipment and a long-term investment were purchased during the year, but none were sold. Dividends were paid to the common shareholders. Instructions a. Determine cash flow provided (used) by operating activities. Show all calculations. b. Determine cash flow provided (used) by investing activities. Show all calculations. c. Determine cash flow provided (used) by financing activities. Show all calculations.

Ellis Inc. had cash sales of $300,000 and credit sales of $500,000. The accounts receivable balance increased $10,000 during the year. How much cash did Ellis receive from its customers during the year?

If $200,000 of bonds are issued during the year but $120,000 of old bonds are retired during the year, the cash flow statement will show a(n)

Summary financial information for Klinger Corporation for the year ended July 1, 2013 is listed below: Klinger's free cash flow for 2013 is

Use the following information for questions When preparing the financial statements for 2014, John Grinder, CFO for Ocean Technologies Inc., noticed that during the year the company sold equipment with an original cost of $50,000 for cash proceeds of $18,000. At the time of the sale, the equipment had a carrying amount of $20,000. Ocean Technologies uses the direct method to prepare its cash flow statement. -On the 2014 cash flow statement, the company should report

In calculating net cash provided by operating activities using the indirect method, an increase in prepaid expenses during a period is

When a long-lived asset is sold, only the proceeds from the sale of the asset are reported in the investing activities.

Grand Investments Inc., a public corporation, had the following transactions: Instructions Complete the above table (as demonstrated by item 1) indicating: a. Whether each transaction should be classified as an Operating (O), Investing (I) or Financing (F) activity; and b. The amount of cash inflow (+), outflow (-) or if it has no effect on cash (NE).

Assuming a cash flow statement is prepared using the indirect method, indicate the reporting of the transactions and events listed below by major categories on the statement. Use the following code letters to indicate the appropriate category under which the item would appear on the cash flow statement. Code

Financing activities involve

A comparative balance sheet is required in order to prepare a cash flow statement.

The following information has been gathered by the accountant for Sangsters' Clothing Ltd.: Instructions a. Determine cash received from customers. b. Determine cash paid to suppliers. c. Determine cash paid to employees.

If the balance of prepaid insurance increases during a period, it indicates more cash was expended for insurance than is reported in the income statement.

In the direct method, cash payments to employees would include the salary expense reported in the income statement plus any decrease during the period in salaries payable.

Companies reporting under IFRS have a choice where to classify interest and investments.