Exam 12: Reporting Cash Flows

The gain or loss from retirement of debt is reported under cash flows from operating activities on the statement of cash flows using the indirect method.

A company had net cash flows from operations of $120,000, cash flows from financing of $330,000, total cash flows of $500,000, and average total assets of $2,500,000. The cash flow on total assets ratio equals:

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

The cash flow on total assets ratio:

The statement of cash flows reports all but which of the following:

The indirect method separately lists each major item of operating cash receipts and cash payments.

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 in the operating activities section reported under the direct method is:

Financing activities include receiving cash dividends from investments in other companies' stocks.

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

In preparing Marjorie Company's statement of cash flows for the most recent year, the following information is available: Purchase of equipriert \2 60,000 Proceeds from the sale of equiprnent 87,000 Purchase of lard 91,000\ Net cash flows from investing activities for the year were:

Explain how the cash flows from operating activities section of the statement of cash flows is prepared using the direct method.

Based on the following information provided about a company's operations, calculate its cost of goods purchased and its cash paid for merchandise. Cost of goods sold. Merchandise inventory, beginning year . Accounts payable, beginning year. Merchandise inventory, end-of-year. Accounts payable, end-of-year. \ 522,000 70,000 53,000 57,000 48,000

Noncash investing and financing activities may be disclosed in:

Use the following information to calculate cash paid for wages and salaries: Salaries expense \ 168,000 Salaries payable, January 1 6,400 Salaries payable, December 31 10,600

________ activities include those transactions that affect long-term liabilities and equity.

Probably the most important section of the statement of cash flows in analyzing the financial performance of a company's ongoing business is the ________ section.

Financing activities include receiving cash from issuing debt and receiving cash dividends from investments in other companies' stocks.

Fernwood Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available: Retained earnings balance at the beginning of the year $233,000 Cash dividends declared for the year 50,000 Proceeds from the sale of equipment 85,000 Gain on the sale of equipment 4,500 Cash dividends payable at the beginning of the year 22,000 Cash dividends payable at the end of the year 30,000 Net income for the year 110,000

A company had average total assets of $3,216,000, total cash flows of $1,320,000, cash flows from operations of $554,000, and cash flows for plant assets of $850,000. The cash flow on total assets ratio equals:

The statement of cash flows explains the difference between the beginning and ending balances of cash and cash equivalents.