Exam 16: Reporting the Statement of Cash Flows

A machine with a cost of $130,000 and accumulated depreciation of $85,000 is sold for $50,000 cash.The amount that should be reported as a source of cash under cash flows from investing activities is:

(Multiple Choice)

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Question 141

Sebring Company reports depreciation expense of $40,000 for Year 2.Also,equipment costing $140,000 was sold for its book value in Year 2.The following selected information is available for Sebring Company from its comparative balance sheet.Compute the cash received from the sale of the equipment.

(Multiple Choice)

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Question 142

A company reported average total assets of $496,000 in Year 1 and $604,000 in Year 2.Its net operating cash flow in Year 1 was $41,150 and $55,500 in Year 2.Calculate its cash flow on total assets ratio for both years.Comment on the results.

(Essay)

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Question 143

Match each of the following items with the appropriate definitions.

A financial statement that reports the cash inflows and cash outflows for an accounting period,and classifies those cash flows as operating,investing,or financing activities.

Operating activities

Transactions with a company's owners and creditors that include obtaining cash from issuing debt and repaying the amounts borrowed,and obtaining cash from or distributing cash to owners.

Statement of cash flows

Transactions that include making and collecting notes receivable or purchasing and selling plant assets,or investments in other than cash equivalents and trading securities.

Direct method

Correct Answer:

Verified

A financial statement that reports the cash inflows and cash outflows for an accounting period,and classifies those cash flows as operating,investing,or financing activities.

Transactions with a company's owners and creditors that include obtaining cash from issuing debt and repaying the amounts borrowed,and obtaining cash from or distributing cash to owners.

Transactions that include making and collecting notes receivable or purchasing and selling plant assets,or investments in other than cash equivalents and trading securities.

A calculation of the net cash provided (used.by operating activities that lists the major items of operating cash receipts,and then subtracts the major items of operating cash payments.

Activities that involve the production or purchase of merchandise and the sale of goods or services to customers,including expenditures related to administering the business.

A calculation that reports net income and then adjusts the net income amount by adding and subtracting items that are necessary to yield net cash provided (used.by operating activities.

(Matching)

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Question 144

Noncash financing and investing activities are disclosed in the or in a separate __________________.

(Short Answer)

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Question 145

A statement of cash flows should reconcile the differences between the beginning and ending balances of:

(Multiple Choice)

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Question 146

The purchase of stock in another company is classified as a financing activity.

(True/False)

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Question 147

When preparing the operating activities section of the statement of cash flows using the indirect method,an increase in income taxes payable is added to net income.

(True/False)

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Question 148

Accounting standards:

(Multiple Choice)

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Question 149

Cash paid for merchandise is an operating activity.

(True/False)

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Question 150

The statement of cash flows reports:

(Multiple Choice)

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Question 151

An example of a transaction that must be disclosed as a noncash investing and financing activity includes:

(Multiple Choice)

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Question 152

In preparing a company's statement of cash flows for the most recent year,the following information is available: Net cash flows from investing activities for the year were:

(Multiple Choice)

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Question 153

Managers only use the cash flow statement to evaluate the net cash increase or decrease,and do not pay much attention to the details of cash flows from operating activities,cash flows from investing activities,and cash flows from financing activities.

(True/False)

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Question 154

The FASB recommends that the operating section of the statement of cash flows be reported using the direct method.

(True/False)

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Question 155

The cash flow on total assets ratio is computed by dividing cash flows from operations by average total assets.

(True/False)

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Question 156

For each of the following items,indicate whether it would be classified as an (O)operating activity,an (I)investing activity,a (F)financing activity,or a significant (N)noncash financing and investing activity. __ (1)Received cash dividends from investments in trading securities. (2)Collected accounts receivable from customers. (3)Issued bonds payable for cash. (4)Paid wages to employees. (5)Issued stock for cash. (6)Sold equipment for cash. (7)Purchased land in exchange for a note payable. (8)Paid cash dividends. (9)Received interest from investments in trading securities. _ (10)Purchases of land for cash.

(Essay)

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Question 157

The accountant for Robinson Company is preparing the company's statement of cash flows for the fiscal year just ended.The following information is available: What is the ending balance for retained earnings?

(Multiple Choice)

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Question 158

All of the following statements related to reporting cash flows from operating activities under U.S.GAAP and IFRS are true except:

(Multiple Choice)

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Question 159

Equipment costing $100,000 with accumulated depreciation of $40,000 is sold at a loss of $10,000.This implies that $40,000 cash was received from the sale.

(True/False)

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Question 160

Showing 141 - 160 of 178

Exam 16: Reporting the Statement of Cash Flows

A machine with a cost of $130,000 and accumulated depreciation of $85,000 is sold for $50,000 cash.The amount that should be reported as a source of cash under cash flows from investing activities is:

Sebring Company reports depreciation expense of $40,000 for Year 2.Also,equipment costing $140,000 was sold for its book value in Year 2.The following selected information is available for Sebring Company from its comparative balance sheet.Compute the cash received from the sale of the equipment.

A company reported average total assets of $496,000 in Year 1 and $604,000 in Year 2.Its net operating cash flow in Year 1 was $41,150 and $55,500 in Year 2.Calculate its cash flow on total assets ratio for both years.Comment on the results.

Noncash financing and investing activities are disclosed in the ____________ or in a separate ______________________________.

A statement of cash flows should reconcile the differences between the beginning and ending balances of:

The purchase of stock in another company is classified as a financing activity.

When preparing the operating activities section of the statement of cash flows using the indirect method,an increase in income taxes payable is added to net income.

Accounting standards:

Cash paid for merchandise is an operating activity.

The statement of cash flows reports:

An example of a transaction that must be disclosed as a noncash investing and financing activity includes:

In preparing a company's statement of cash flows for the most recent year,the following information is available: Net cash flows from investing activities for the year were:

Managers only use the cash flow statement to evaluate the net cash increase or decrease,and do not pay much attention to the details of cash flows from operating activities,cash flows from investing activities,and cash flows from financing activities.

The FASB recommends that the operating section of the statement of cash flows be reported using the direct method.

The cash flow on total assets ratio is computed by dividing cash flows from operations by average total assets.

The accountant for Robinson Company is preparing the company's statement of cash flows for the fiscal year just ended.The following information is available: What is the ending balance for retained earnings?

All of the following statements related to reporting cash flows from operating activities under U.S.GAAP and IFRS are true except:

Equipment costing $100,000 with accumulated depreciation of $40,000 is sold at a loss of $10,000.This implies that $40,000 cash was received from the sale.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, natural Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Time Value of Money B

Activity-Based Costing C

Filters

Noncash financing and investing activities are disclosed in the or in a separate __________________.