Exam 17: Statement of Cash Flows

Dividends received 16,000 Interest paid 20,000 Interest received 42,000 -With regard to the above information,which of the following is acceptable as part of preparation of the statement of cash flows? $\begin{array}{lr}&\text { Cash from operating activities } & \text { Cash from/(used by) investing activities } \\\hline a.&\text { \$0 } & \$ 42,000 \\b.&\$ 58,000 & (\$ 20,000) \\c.&\text { \$0 } & \$ 38,000 \\d.&\$(20,000) & \$ 58,000\end{array}$

Bruce Company reported net income for 2015 of $100,000.The company reported depreciation expense of $17,500 and amortization of $5,000.The company also reported a loss on the sale of equipment of $2,500.Based only on this information,the company would report cash flow from operating activities of

An increase in accounts receivable of $6,000 for the year

IFRS rules allow firms to classify dividends paid as a component of cash flows from operating activities in order to help users to determine the ability of an entity to pay dividends out of operating cash flows.

Issuing common stock in exchange for a building will create a cash inflow in the financing activities section of the cash flow statement.

For a firm using the indirect method to prepare cash flows from operating activities,a decrease in a company's pension liability account should be deducted from net income to arrive at cash flow from operating activities.

Changes in the balance sheet accounts at June 30, 2014 and 2015 for the Poker Company are presented below: $\begin{array}{lr}\text { Assets } & \begin{array}{r}\text { Increase } \\\text { (Decrease }\end{array} \\\text { Cash } & \$ 80,000 \\\text { Accounts receivable } & 200,000 \\\text { Lnventory } & 300,000 \\\text { Long-term investments } & 200,000 \\\text { Equipment } & (200,000 \\\text { Accumulated depreciation } & (60,000)\\\\\text { Liabilities and Stockholders' Equity }\\\text {Accounts payable }&\$(40,000)\\\text {Dividends payable}&400,000\\\text {Notes payable-Current }&(200,000)\\\text {Notes payable-Long-term }&400,000\\\text {Common stock, \$ 1.00 par }&300,000\\\text {Additional paid-in capital }&100,000\\\text {Retained eamings }&80,000\\\end{array}$ Additional Information for 2015: Net income was $480,000 and dividends of $400,000 were declared. Common stock was issued for cash. A Long-term investment was sold for $160,000. A new Long-term investment was acquired for $360,000. Equipment that cost $600,000 was sold for $200,000. The book value of those assets was $150,000. -The depreciation for 2015 is

The FASB addressed simultaneous financing and investing activities by requiring they be ignored.

Changes in the balance sheet accounts at June 30, 2014 and 2015 for the Poker Company are presented below: $\begin{array}{lr}\text { Assets } & \begin{array}{r}\text { Increase } \\\text { (Decrease }\end{array} \\\text { Cash } & \$ 80,000 \\\text { Accounts receivable } & 200,000 \\\text { Lnventory } & 300,000 \\\text { Long-term investments } & 200,000 \\\text { Equipment } & (200,000 \\\text { Accumulated depreciation } & (60,000)\\\\\text { Liabilities and Stockholders' Equity }\\\text {Accounts payable }&\$(40,000)\\\text {Dividends payable}&400,000\\\text {Notes payable-Current }&(200,000)\\\text {Notes payable-Long-term }&400,000\\\text {Common stock, \$ 1.00 par }&300,000\\\text {Additional paid-in capital }&100,000\\\text {Retained eamings }&80,000\\\end{array}$ Additional Information for 2015: Net income was $480,000 and dividends of $400,000 were declared. Common stock was issued for cash. A Long-term investment was sold for $160,000. A new Long-term investment was acquired for $360,000. Equipment that cost $600,000 was sold for $200,000. The book value of those assets was $150,000. -The gain on the sale of equipment for 2015 is

Changes in the balance sheet accounts at June 30, 2014 and 2015 for the Poker Company are presented below: $\begin{array}{lr}\text { Assets } & \begin{array}{r}\text { Increase } \\\text { (Decrease }\end{array} \\\text { Cash } & \$ 80,000 \\\text { Accounts receivable } & 200,000 \\\text { Lnventory } & 300,000 \\\text { Long-term investments } & 200,000 \\\text { Equipment } & (200,000 \\\text { Accumulated depreciation } & (60,000)\\\\\text { Liabilities and Stockholders' Equity }\\\text {Accounts payable }&\$(40,000)\\\text {Dividends payable}&400,000\\\text {Notes payable-Current }&(200,000)\\\text {Notes payable-Long-term }&400,000\\\text {Common stock, \$ 1.00 par }&300,000\\\text {Additional paid-in capital }&100,000\\\text {Retained eamings }&80,000\\\end{array}$ Additional Information for 2015: Net income was $480,000 and dividends of $400,000 were declared. Common stock was issued for cash. A Long-term investment was sold for $160,000. A new Long-term investment was acquired for $360,000. Equipment that cost $600,000 was sold for $200,000. The book value of those assets was $150,000. -The cash flow from investing activities for 2015 is a

Issuing common stock in exchange for equipment will create a cash outflow in the investing activities section of the cash flow statement and a cash inflow in the financing activities section of the cash flow statement.

The following data is for the Kris Company for 2015 ; Gain on sale of equipment \8 ,000 Purchase of First Corp. bonds (face value \ 250,000 ) 275,000 Proceeds from sale of machinery 300,000 Dividends paid 50,000 Proceeds from sale of treasury stock 200,000 -The amount reported as net cash provided by investing activities is

The following data is for the Matt Company for 2015 : Loss on sale of equipment 000 Purchase of Ithaca Corp. bonds (face value \ 400,000 ) 375,000 Proceeds from sale of machinery 200,000 Dividends paid 25,000 Proceeds from sale of treasury stock 100,000 -The amount reported as net cash from financing activities is

Treasury stock costing $89,050 was sold for $94,375 cash.Which of the following statements accurately describes the reporting of this transaction within the cash flow statement assuming that the indirect method is used to determine net cash flows from operating activities?

The following information has been provided to you by Watts Corporation: Net income \ 175,300 Increase in accounts payable \ 18,500 Increase in inventory \ 17,500 Increase in accounts receivable \ 7,700 Increase in bonds payable \ 75,000 Amortization of bond premium \ 5,400 Depreciation expense \ 21,300 Decrease in income taxes payable \ 7,300 What is Watts Corporation's net cash flow from operating activities?

The Bears Corporation has provided you the following information: • The accounts receivable balance increased $50,000. • Net sales was $500,000. • The gross profit was 40% of net sales. • The inventory account increased $45,000. • The accounts payable balance decreased $17,000. • $7,500 of accounts receivable were written off. • The bad debt expense was $10,000. Required: 1.Determine the cash collected from customers. 2.Determine the cash paid to suppliers.

Cash flows arising from the payment of dividends are cash flows from

During 2015,Krug Company reported net sales of $1,025,000.During the year net accounts receivable increased $39,750 even though Krug wrote-off $7,150 of receivables as uncollectible;Krug uses the allowance method to account for bad debts.Krug's bad debt expense during 2015 was $20,500.How much cash was collected from customers during 2015?

When using the direct method to report cash flow from operating activities,a specific category for cash paid to employees and other suppliers of goods and services must be reported.

The Pulaski Corporation reported the following for the year ended December 31,2014: Premium on Bonds Payable \ 28,500 \ 25,750 Interest Payable \ 7,350 \ 9,500 Interest Expense \ 62,250 How much cash did Pulaski pay for interest during 2014?