Exam 13: Statement of Cash Flows

During 2010,Boogle reported net income of $785 million and net cash inflow from operations of $1,196 million.During 2009,their net income was $563 million and net cash inflow from operations was $1,237 million.Which of the following is incorrect about their quality of income ratios?

Flow Company has provided the following information for the year ended December 31,2010: Cash paid for interest,$20,000; Cash paid for dividends,$6,000; Cash dividends received,$4,000; Cash proceeds from bank loan,$29,000; Cash purchase of treasury stock,$11,000; Cash paid for equipment purchase,$27,000; Cash received from common stock sale,$37,000; Cash received from sale of land with a $32,000 book value,$25,000; Acquisition of land costing $51,000 in exchange for preferred stock issuance. Paid a $100,000 note payable by exchanging used machinery with a $77,000 book value. How much was Flow's net cash flow from investing activities?

Collection of principal on a note receivable is a cash flow from financing activities.

Under the indirect method,a decrease in inventory is deducted from net income,because inventory purchases are less than cost of goods sold.

The following information has been provided to you by RKJ Company: Net income \ 300,000 Decrease in accounts payable \ 114,000 Increase in inventory \ 22,000 Increase in accounts receivable \ 24,000 Decrease in bonds payable \ 25,000 Loss on sale of a depreciable asset \ 19,000 Depreciation expense \ 40,000 Decrease in income taxes payable \ 12,000 What is the net cash flow from operating activities?

Which of the following would be deducted from net income when determining cash flows from operating activities under the indirect method?

The quality of income ratio can only be interpreted based on knowledge of a company's business operations and strategies.

Kennel Co.reported short-term borrowings of $2,500,000,long-term borrowings of $6,800,000,repayments of long-term borrowings of $3,500,000,interest payments of $780,000,repurchase of treasury shares of $500,000,cash dividends declared of $1,100,000,and cash dividend payments of $800,000.Kennel also issued their common stock in exchange for a building costing $400,000.How much is the net cash flow from financing activities?

Which of the following statements about the quality of income ratio is incorrect?

Rice Company,a retailer,has provided the following information pertaining to its recent year of operation: Net income,$100,000; Accounts receivable increased $9,000; Prepaid insurance decreased $3,000; Depreciation expense was $15,000; Gain on sale of land,$2,000; Wages payable decreased $7,000; Unearned revenue increased $11,000. How much was Rice's net cash inflow from operating activities?

Which of the following transactions increases the quality of income ratio?

Under the indirect method,an increase in prepaid expenses is deducted from net income,because the cash prepayments exceed the related expenses.

During 2010,Eva's Enterprises cash paid for property,plant and equipment was $755 million and cash flow from operations was $5,968 million.The average property,plant and equipment from the comparative balance sheets were $6,094 million.Compute Eva's Enterprises capital acquisitions ratio for 2010.

Marissa Company is preparing a statement of cash flows using the indirect method.The following data are available: Net income \ 30,000 Depreciation expense 18,000 Inventory increase 5,000 Wages payable decrease 10,000 Accounts receivable decrease 10,000 Accounts payable decrease 7,000 Calculate cash flows from operating activities.

Which of the following statements about the statement of cash flows is correct?

Hill Company reported net income of $10,000 for 2010.Additional 2010 information is as follows: Expenditures for productive assets \ 6,000 Depreciation expense on productive assets 2,000 Dividends paid on common stock 900 Increase in accounts payable 400 Decrease in inventory 200 Amortization of patent 100 Decrease in accounts receivable 300 Calculate cash flows from operating activities.

The capital acquisitions ratio represents the portion of property,plant,and equipment purchases which could have been financed with cash flow from operations.

Allen Company's 2010 income statement reported total revenues,$850,000 and total expenses (including $40,000 depreciation)of $720,000.The 2009 balance sheet reported the following: Accounts receivable-beginning balance,$50,000 and ending balance,$40,000; accounts payable-beginning balance,$22,000 and ending balance,$28,000.Therefore,based only on this information,how much was the 2010 net cash inflow from operating activities?

Blythe Company paid $2.2 million to purchase stock in another company,$1.0 million to repurchase treasury shares,$.5 million to buy short-term investments,sold used equipment for $.8 million when its book value was $.6 million,and purchased new equipment for $3.4 million.How much will be reported as net cash flow from investing activities?

Which of the following would be deducted from net income when determining cash flows from operating activities under the indirect method?