Exam 17: Statement of Cash Flows

Cash flows arising from the acquisitions and divestitures of other companies are cash flows from

Cash flows arising from the purchase or sale of a company's own stock are cash flows from

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 investing activities is

According to U.S.GAAP,cash flows for interest resulting from a long-term investment in bonds should be reported in the investing activities section of the statement of cash flows.

Issuing common stock in exchange for a patent will neither be reported within the cash flow statement nor disclosed.

Under IFRS rules,if a firm uses the direct method,a reconciliation of net income to cash flows from operating activities is not required.

For a firm using the indirect method,the gain on sale of equipment should be added back to net income to arrive at cash flow from operating activities.

Which of the following is not an indicator that operating activities cash flows might be increased through distortion or manipulation?

Cash flow from operating activities is very comparable across firms within the same industry in the United States given that all firms must follow GAAP.

For a firm using the indirect method,changes in inventories due to acquisitions are not included as part of the inventory adjustment to accrual-basis income.

A building costing $550,000 with accumulated depreciation of $225,000 was sold for $275,000 cash.Which of the following statements is correct with respect to preparing the cash flow statement if the indirect method is being used?

The Black Corporation has provided the following information: • Net income: $560,000 • Increase in prepaid expenses: $14,000 • Amortization of discount on bonds payable: $10,000 • Decrease in accounts payable: $20,000 • Increase in inventory: $21,000 • Dividends declared: $39,000 • Dividends paid: $36,000 • Increase in accounts receivable: $30,000 • Increase in wages payable: $16,000 • Increase in deferred tax liability: $41,000 Required: Determine the cash flow from operating activities.

The direct method and the indirect method are two alternative presentations for cash flows from investing activities.

Under the indirect method,a loss on the sale of equipment should be

Cash flows arising from the purchase or sale of productive assets are cash flows from

The statement of cash flows provides relevant information to lenders,bankers,and investors to help them analyze a company's cash flows from its operating,investing,and financing activities.

Pipe Corporation reported cost of goods sold of $250,000 for 2015.It also reported an increase in inventory for the year of $30,000,and an increase in accounts payable of $24,000.Pipe would report cash paid to suppliers in 2015 under the direct method for cash flows of

Cash flows arising from the purchase or sale of marketable securities are cash flows from

For a firm using the direct method,amortization of bond premium should be added back to net income when determining cash payments for interest.