Exam 5: The Statement of Cash Flows

ARI Inc.began 2013 with the following: During 2013 the following events occurred: Accounts written off \ 1,200 Sales on account 30,000 Bad debt expense recognized 2,000 At the end of 2013,ARI showed a balance in gross accounts receivable (before the allowance for doubtful accounts) of $16,800.In the direct method Statement of Cash Flows,what amount would be shown as an operating cash inflow?

SDB reported sales of $300,000,write-offs of uncollectible accounts of $10,000 against the allowance,and a decrease in net accounts receivable of $40,000 during 2011. Calculate what would be SDB's cash collected from customers during 2011.

VJW received the following cash inflows during 2013: Calculate cash inflow from financing activities for 2013.

In a Statement of Cash Flows:

The main purpose of the Statement of Cash Flows is:

DBB reported cost of goods sold for 2013 of $600,000; merchandise inventory increased by $20,000 during the year and accounts payable decreased by $30,000 during the year.What would be DBB's cash paid to suppliers for 2013?

Dividends received may be classified as operating or investing activities under IFRS.

The Statement of Cash Flows does not report the effects of:

VJW received the following cash inflows during 2012: Cash dividends received. \2 0,000 Sale of preferred stock. 30,000 Proceeds from issuing bonds payable. 100,000 Proceeds from sale of securities available for sale.. 40,000 What would be cash inflow from financing activities for 2012?

When a Statement of Cash Flows is prepared using the indirect method,a decrease in the balance of a prepaid expense during the reporting period is an "add back" adjustment to net income to convert it to cash from operating activities.

A Statement of Cash Flows is significant in that it presents comprehensive information about the operating,financing,and investing activities of a company.

A firm's accumulated depreciation account increased $30,000 for the year,and total plant assets at cost increased $200,000.During the year,the firm purchased $350,000 of new equipment for cash,and sold equipment for $50,000 cash.This equipment had been depreciated $30,000 at the time of sale. Present the complete disclosure of these events in an indirect format Statement of Cash Flows.

Under the direct method,cash from customers would be sales plus a(n):

Sale of an asset for less than its book value results in an inflow of cash.

The net income for a corporation for the current accounting period was $275,000.Changes in various accounts during the period follow: Cash \ 12,500 increase Investments in securities available for sale 40,000 decrease Accounts receivable 19,000 increase Inventories 8,000 increase Short-term prepayments 3,000 decrease Accounts payable 11,500 increase Accrued liabilities 2,200 decrease Notes payable to banks (due in nine months) 50,000 increase The cash provided by operations for the current period is:

Under IFRS,interest paid may be classified as:

RJB reported sales of $200,000 and an increase in accounts receivable of $30,000 during 2011.Under the direct method,calculate what would be RJB's cash collected from customers during 2011?

A firm's recent comparative balance sheets and income statements follow: Balance sheets, December 31 2011 2010 Assets: Cash \ 29,500 \ 30,000 Accounts receivable 17,000 12,000 Capital assets 138,500 123,500 Accumulated depreciation Total assets \ 96,000 \ 82,000 Liabilities and shareholders' equity Bonds payable \ Dividends payable Common shares Additional paid-in capital Retained earnings Total liabilities and stock-holders' equity Income statement for year ended December 31,2011 Sales revenue \ 77,500 Cost of goods sold (53,500) Gross margin 24,000 Depreciation expense (16,500) Gain on sale of equipment Net income \ 14,000 Additional information: 1.During 2011,equipment costing $20,000 was sold for cash. 2.During 2011,$10,000 of bonds payable were issued in exchange for capital assets.There was no amortization of bond discount or premium. Required: Prepare the 2011 Statement of Cash Flows using the indirect method.

In the preparation of the Statement of Cash Flows using the Direct Method,an operating loss would be reported under cash flows from operating activities.

Net income was $50,000 and cost of goods sold was $150,000.Inventories increased by $10,000 and trade accounts payable increased by $12,000.The cash paid to suppliers was: