Exam 16: Reporting and Analyzing Cash Flows

Genesis reported that bonds with a face value of $100,000 and a carrying value of$67,000 are retired for $60,000 cash, resulting in a loss of $7,000. The amount to be reported in the financing section is:

Preparation of the statement of cash flows involves:

Find the cash inflows from investing and financing activities using the data below assuming the company followed ASPE standards.

The statement of cash flows is:

Amy Corporation's income statement showed the following: net income, $72,000;depreciation expense, $8,000; and gain on sale of plant assets, $6,000. An examination of the company's current assets and current liabilities showed the following changes as a result of operating activities: accounts receivable decreased $5,700; merchandiseinventory increased $8,000; prepaid expenses decreased $2,100; accounts payable increased $1,700. Calculate the net cash provided or used) by operating activities.

The statement of cash flows explains how transactions and events impact the end-of-period cash balance to produce the end-of-period cash balance.

Use the information provided about the current year operations of Upper Down Company to calculate cash paid for merchandise.

Investments must be within 6 months of their maturity dates to be classified as cash equivalents.

The direct method calculates the net cash inflows outflows) from operating activities by adjusting accrual net income to a cash basis.

Under the indirect method, a decrease in accounts payable will be added to net income.

The statement of cash flows helps financial statement users evaluate a company's earnings performance at a point in time.

Under the indirect method, noncash operating expenses are added back to net income when preparing the investing section of the statement of cash flows.

Examples of transactions that must be disclosed as noncash investing and financing activities include:

Which of the following is included in cash flows from financing activities?

The appropriate statement of cash flows activity category for the purchase of land in exchange for common shares is:

Firms have the option of using either the direct or indirect method to prepare the statement of cash flows.

Most acquisitions of property, plant and equipment are reported on the statement of cash flows as cash used by investing activities.

A noncash investing transaction should be disclosed as a note to the statement of cash flows.

Under the indirect method, depreciation expense is subtracted from net income.

While analyzing Tektron's statement of cash flows, you note that there was a net cash outflow from investing activities of $87,000, while cash provided by operations was$95,000. This means that: