Exam 12: Statement of Cash Flows

The management team of Wickersham Brothers Inc.is preparing its annual financial statements.The statements are complete except for the statement of cash flows.The completed comparative balance sheets and income statements are summarized. Other information from the company's records includes the following: • Bought equipment for cash,$50,000. • Paid $10,000 on long-term note payable. • Issued new shares of common stock for $20,000 cash. • Cash dividends of $16,000 were declared and paid to stockholders. • Accounts Payable arose from inventory purchases on credit. • Income Tax Expense ($4,000)and Interest Expense ($3,000)were paid in full at the end of both years and are included in Other Expenses. Required: Prepare a schedule summarizing operating,investing,and financing cash flows using the T-account approach.

Equipment with a cost of $80,000 and accumulated depreciation of $75,000 is sold for $12,000 cash. Required: Part a.Prepare the journal entry to record this transaction. Part b.Explain how this transaction would be reported on the statement of cash flows prepared using the indirect method.

Which of the following statements about cash flows from investing activities is correct?

Match each term with the appropriate definition.Not all definitions will be used. -Working Capital

In determining cash flows related to investing activities,which accounts are analyzed?

Which of the following items would be reported on a statement of cash flows using the indirect method,but not on a statement prepared using the direct method?

Which of the following is included in the financing activities on a statement of cash flows?

A company's cash flows from investing activities include cash transactions relating to the purchase and disposal of which types of assets?

Which of the following would be classified as a financing activity on the statement of cash flows?

Consider the following information: Required: Part a.Compute the cash provided by (used in)investing activities. Part b.Compute the cash provided by (used in)financing activities. Part c.If you did not use any of the items listed in parts a or b,explain why,and indicate,if appropriate,how each item would be reported on the statement of cash flows.

Which of the following would be reported on the statement of cash flows,using the direct method,as a cash flow from operating activities?

Which method of preparing the operating activities section of the statement of cash flows consists of a summary of each component of operating transactions that result in either a debit or a credit to cash?

When the indirect method is used to determine net cash provided by (used in)operating activities,adding an increase in Interest Payable to net income eliminates the effect of recording expenses that:

Cash flows from investing activities include cash:

Skinner Butte,Inc.had the following information: Net income \ 4,000 Depreciation 6,000 Increase in accounts receivable 2,000 Decrease in prepaid rent (800) Increase in accrued liabilities 1,800 Cash paid to purchase office equipment 8,000 What is Skinner Butte's net cash provided by operating activities?

Which of the following are used to determine cash flows from financing activities?

Which of the following statements about calculation of cash flows from operating activities under the indirect method is correct?

The statement of cash flows cannot be used to determine:

Free cash flow may be used for all of the following except:

The starting point for preparing the operating activities section using the indirect method is: