Exam 12: The Statement of Cash Flows

Which of the following is not a financing activity?

The work sheet used to prepare a statement of cash flows (indirect method to determine cash flows from operating activities) should have a total in the Changes column equal to total assets.

When using the direct method, how is the sale of long-term investments for cash reported on the statement of cash flows?

Each of the following transactions would be classified as either an investing or a financing activity except

If the balance of prepaid insurance was the same on January 1, 2016, and December 31, 2016, then the insurance expense would ____________________ the cash payments made for insurance during the year.

Under the direct method, depreciation expense is treated as an outflow in the Investing Activities section of the statement of cash flows.

Use the following codes to indicate how the cash flow effect, if any, of each transaction would be reported on a statement of cash flows if the operating activities section is prepared using the direct method. -Repaid a long-term bank loan.

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). -Purchase of new factory equipment

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

When using the direct method, how are salaries paid to employees reported on the statement of cash flows?

Where would you tell someone to find the information needed to compute the cash flow adequacy ratio?

The following items were reported on the balance sheets and income statement for Centerton Inc., a service company: Accounts payable, December 31, 2016 \ 64,000 Accounts payable, December 31, 2017 48,000 Operating expenses-2017 170,000 What amount would be reported in the operating activities section of the statement of cash flows for payments for operating expenses under the direct method?

Most experts now agree that there has been a tendency to rely far too heavily on net income and its companion, earnings per share, and in many cases to ignore a company's cash flows.

A work sheet is an alternative to T accounts to help in the preparation of a statement of cash flows.

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). -Decrease in prepaid insurance

Upon review of Young's Garden Center statement of cash flows, the following was noted: Cash flows from operating activities \ 15,000 Cash flows from investing activities 80,000 Cash flows from financing activities (60,000) From this information, the most likely explanation is that Young's is

Eduardo's Texas Cantina had the following results for December 31, 2016 and 2017, respectively: 2016 2017 Cash \ 42,000 \ 49,000 Noncash current assets 162,000 175,000 Cash flows from financing activities 313,000 Cash flows from operating activities 72,000 What was the amount of cash flows from investing activities for 2017?

Use the following codes to indicate how the cash flow effect, if any, of each transaction would be reported on a statement of cash flows if the operating activities section is prepared using the direct method. -Recorded depreciation for the year.

For each of the following items, indicate whether it would appear on a statement of cash flows prepared using the Direct method (a) or the Indirect method (b). -Decrease in accounts payable

In place of _____________, a worksheet is a useful device to help in the preparation of a statement of cash flows.