Exam 12: The Statement of Cash Flows

Dickinson Inc. has the following debt outstanding on December 31, 2015: On this date, Dickinson retired the entire bond issue by paying cash of $610,000. REQUIRED: 1. Identify the accounting equation effects of recording the bond retirement. 2. Describe how the bond retirement would be reported on the statement of cash flows assuming that Dickinson uses the indirect method.

Use the information below for Focal Point Corp. for 2015 and 2016 to answer the following question. Assume that there were no retained earnings transactions other than those dealing with dividends and net income. How much dividends did Focal Point declare during 2016?

When using the indirect method, how is the issuance of stock to retire a long-term debt shown on a statement of cash flows?

Which of the following is not a financing activity?

Which balance sheet accounts are most affected by investing activities?

O'Bryan Company began the year with a balance of $18,000 in Salaries and Wages Payable and ended the year with $11,000 in the account. Salaries and Wages Expense for the period amounted to $91,000. Under the direct method, O'Bryan will report cash payments for salaries and wages of:

Goldman Corp. reported the following information for 2015 and 2016. How much cash was paid for merchandise purchases during 2016?

Use the following codes to indicate how the cash flow effect, if any, of each transaction or event would be reported on a statement of cash flows if the operating activities section is prepared using the indirect method. -Issued stock to retire bonds.

The Financial Accounting Standards Board FASB has expressed a strong preference for the indirect method, but allows companies to use the direct method in calculating the cash flow from operating activities.

The amount of cash provided from operating activities is under both the direct and indirect methods.

Operating, investing, and financing activities affect certain balance sheet accounts. Which of the following statements is true?

Use the following codes to indicate how the cash flow effect, if any, of each transaction or event would be reported on a statement of cash flows if the operating activities section is prepared using the indirect method. -Issued twenty-year bonds.

Klein Corp. acquired land by issuing its common stock. How should this transaction be disclosed when a statement of cash flows is prepared?

Cash flow per share is computed by dividing cash on the balance sheet by the number of shares outstanding.

Assuming the indirect method for preparing the statement of cash flows is used, indicate whether these items should be added to net income A, deducted from net income D, or not be reported in the operating section of the statement under the indirect method NR. -Exchange of a note for equipment

Upon review of Young's Garden Center statement of cash flows, the following was noted: From this information, the most likely explanation is that Young's is

Craft Corp. began operations on January 1, 2015. The statement of cash flows for the first year reported dividends paid of $160,000. The balance sheet at the end of the first year reported $40,000 in dividends payable and $580,000 in ending retained earnings. Determine Craft's net income for its first year of operations.

Which of the following statements is true?

Planet & Co. reported net income for the current year. Which of the following business transactions would cause cash from operating activities to be higher than the amount of net income?

Which method of preparing the operating activities section of a statement of cash flows adjusts net income to remove the effects of deferrals and accruals for revenues and expenses?