Exam 13: Statement of Cash Flows

Which of the following would not be a financing activities cash flow?

Complete the following statement of cash flows using the indirect method:

Halbur Company reported the following for its recent year of operation: From the income statement: Depreciation expense \ 1,000 Loss on sale of equipment 3,000 From the comparative balance sheet: Beginning balance, equipment \ 12,500 Ending balance, equipment 8,000 Beginning balance, accumulated depreciation 2,000 Ending balance, accumulated depreciation 2,400 No new equipment was purchased during the year.What was the selling price of the equipment?

When accrued liabilities increase from the beginning to the end of the year,it means accrued expenses were greater than cash payment of such expenses so the increase would be added to net income to convert to cash flow from operating activities under the indirect method.

Brice Corporation reported the following information: 2010 Income Statement: Sales Revenue \ 8,200,000 Cost of goods sold Gross profit 1,800,000 Operating expenses (includes \ 200,000 depreciation expense) Pretax income 550,000 Income tax expense ( 30\% rate) Net Income \ 385,000 $\underline { \text { Balance Sheet: } }$ Accounts receivable \ 800,000 \ 600,000 Inventory 520,000 480,000 Prepaid expenses 110,000 120,000 Accounts payable 340,000 310,000 Accrued liabilities 80,000 90,000 Income taxes payable 25,000 40,000 Unearned revenue 100,000 200,000 Compute Brice's cash paid for operating expenses for 2010.

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

Which of the following statements about the capital acquisitions ratio is correct?

Below is the 2011 income statement for the Critters Corporation. Critters Corporation Income Statement For the Year Ended December 31, 2011 Net sales \ 100,000 Cost of goods sold Gross profit on sales \ 60,000 Various operating expenses \ 25,000 Depreciation expense 5,000 Interest expense 2,000 Income tax expense Net income Additional Information: Accounts receivable increased by $8,000 Merchandise inventory increased by $4,000 Accounts payable increased by $6,000 Prepaid expenses decreased by $2,000 Accrued liabilities decreased by $5,000 Interest payable increased by $1,000 Prepare the operating activities section of the statement of cash flows using the indirect method.

Which of the following transactions would not create a cash flow from operating activities?

Which of the following transactions would be reported as a cash flow from financing activities?

Milliken 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 investing cash flow?

Amortization of a patent reduces cash flows from investing activities.

Under the indirect method,an increase in accounts receivable during the year will be added to net income.

The statement of cash flows explains how the cash balance changed during a particular period of time.

Aaron Inc.reported operating expenses during 2011 of $765,000 (including $80,000 of depreciation expense).Prepaid expenses increased $25,000 while accrued liabilities increased $43,000.How much cash was paid for operating expenses during 2011?

Describe the three cash flow classifications that are reported within a statement of cash flows.

Which of the following statements regarding use of the direct and indirect methods of determining cash flows from operating activities is incorrect?

The difference between the indirect and direct methods of cash flow determination only affects the determination of investing activities cash flows.

During 2011,Tommy's Toys reported the following: short-term borrowings of $419 million; long-term borrowings of $147 million; long-term debt repayments of $45 million; interest paid,$128 million; treasury shares repurchased $632 million; and exercise of stock options by employees,$2 million.How much is net cash flow from financing activities during 2011?

Roberts Company sold equipment for $250,000,purchased a building for $6,500,000,sold short-term investments for $280,000,repaid principal on a note payable for $2,300,000 plus $230,000 of interest,and paid cash dividends of $20,000.How much was the net cash flow from investing activities?