Exam 16: The Cash Flow Statement

Stapp Corp. had an increase in inventory of $40,000. The cost of goods sold was $90,000. There was a $5,000 decrease in accounts payable from the prior period. What were Stapp's cash payments to suppliers?

The cash flow statement must always balance to the change in the cash position of the company during the period.

Starting with profit and adjusting it for items that affected reported profit but which did NOT affect cash is called the

Significant investing and financing activities that do not affect cash are NOT reported in the body of the cash flow statement.

Under ASPE, dividends are classified as financing activities.

The indirect and direct methods of preparing the cash flow statement are identical except for the

Which of the following characteristics does NOT apply to cash equivalents?

In order to determine whether a company is financially sound or not, it is essential to understand its cash flows.

Which of the following would be added to profit using the indirect method?

If a company has both an inflow and outflow of cash related to property, plant, and equipment, the

In preparing a cash flow statement, a conversion of bonds into common shares will be reported in

Issuing bonds for land is

All gains and losses from investing activities must be eliminated from profit in order to arrive at net cash from investing activities.

Cash receipts from customers are greater than sales revenue when there is

Nevada Steamships Inc. reported retained earnings of $463,600 at June 30, 2015, its most recent year end. On July 1, 2014, the opening retained earnings had been $475,000. During the year, ended June 30, 2015, Nevada declared stock dividends on common shares and cash dividends on preferred shares. The stock dividends resulted in a reduction of retained earnings of $200,000. Profit for the year was $225,000 and total comprehensive income was $248,500. Instructions Calculate the amount of cash dividends on the preferred shares.

The indirect method and direct method only apply when calculating the cash flow from investing activities.

A company with a stronger operating cash flow would be more favourable to an investor than one with a stronger cash flow from investments.

Which one of the following affects cash during a period?

The Fisheries Processing Corporation prepared the following income statement and comparative balance sheet for 2014: Instructions Prepare a cash flow statement for 2014, using the indirect method.

Under IFRS, cash paid on interest and dividends is classified as