Exam 19: Statement of Cash Flows

The activities for the year ended December 31,2018 included the following: ∙ Sold a held-for-trading investment for $10,000.The book value was $15,000. ∙ Sold an available-for-sale investment for $10,000.The book value was $5,000. Using the indirect method,how much would be presented as cash flow from operating activities?

Describe the options available for reporting held-for-trading investments regarding their impact on the statement of cash flows.

Contrast the primary differences between IFRS and ASPE with respect to the presentation of the statement of cash flows using the following table:

Explain the options for recording interest and dividends received and interest and dividends paid on the cash flow statement according to IAS 7.

If a company has gaps between the change in cash and the net income for the year:

Define cash and cash equivalents.

Which statement about "cash and cash equivalents" is correct?

Green Leaf's activities for the year ended December 31,2018 included the following: ∙ Comprehensive income totaled $538,000 including $88,000 in other comprehensive income. ∙ Paid a cash dividend of $80,000 that was declared in 2017. ∙ Interest expense for the year was $29,000;the opening and closing balances in the interest payable account were $26,000 and $17,000,respectively. ∙ Accounts receivable increased $33,000 and accounts payable decreased $24,000 during the year. ∙ The company paid $56,000 cash for equipment. ∙ The company sold held-to-maturity investments for $26,000.The book value of the investment was $27,000. ∙ Depreciation expense for the year totaled $19,000. ∙ Suffered an impairment loss on patents of $10,000. ∙ Declared and issued a 2-for-l stock split.There were 400,000 ordinary shares outstanding before the split with a collective market value of $100,000,000. Required: Prepare the cash flows from operating activities section of the statement of cash flows using the indirect method assuming that the company's policy is to report interest and dividends received as an investing activity and interest and dividends paid as a financing activity.

List three reasons why the statement of cash flows is a useful component of an enterprise's financial statements.

Which statement is correct?

Which statement is correct according to IAS 7?

What are the options for recording interest and dividends received and interest and dividends paid on the cash flow statement according to Accounting Standards for Private Enterprises (ASPE)?

The Company's activities for the year ended December 31,2018 included the following: ∙ Income tax expense for the year was $30,000. ∙ Sales for the year were $650,000. ∙ Accounts payable decreased $10,000 in 2018. ∙ Selling and administration expenses for the year totaled $200,000. ∙ Accounts receivable increased $20,000 in 2018. ∙ The Company's cost of goods sold in 2018 was $325,000. ∙ The Company's inventory decreased $15,000 during the year. What is the cash receipts from customers under the direct method?

How do companies account for allowance for doubtful accounts on the cash flow statement?

What are operating activities?

Boboto Inc.'s policy is to report all cash flows arising from interest and dividends in the operating section.Boboto's activities for the year ended December 31,2018 included the following: ∙ Declared and issued a stock dividend valued at $50,000. ∙ Paid $46,000 to repurchase ordinary shares and cancelled them.The book value was $33,000. ∙ Accounts payable decreased $23,000 during the year. ∙ Issued $1,500,000 in bonds.The cash proceeds were $1,410,000. ∙ Interest expense for the period was $10,000.The interest payable account decreased $4,000. ∙ Made a $75,000 principal payment on a bank loan. ∙ Declared a $15,000 cash dividend payable on January 15,2019. Required: a.Prepare the cash flows from financing activities section of the statement of cash flows. b.Identify how the activities listed above that are not financing activities would be reported in the statement of cash flows assuming that the statement is prepared using the indirect method.

Financial information for Fesone Inc.'s balance sheet for fiscal 2017 and 2018 follows: Additional information: 1.Preferred shares were converted to common shares during the year at their book value. 2.The face value of the bonds is $200,000;they pay a coupon rate of 6% per annum.The effective interest rate of interest is 8% per annum. 3,Net income was $290,000. 4.There was an ordinary stock dividend valued at $12,000 and cash dividends were also paid. 5.Interest expense for the year was $130,000.Income tax expense was $116,000. 6.Fesone arranged for a $200,000 bank loan to finance the purchase of the held-to-maturity investments. 7.Fesone has adopted a policy of reporting cash flows arising from the payment of interest and dividends as operating and financing activities,respectively. 8.The held-for-trading investments are not cash equivalents. Required: a.Prepare the cash flows for the year ended December 31,2014 using the indirect method. b.Discuss how the transaction(s)above that are not reported on the statement of cash flows are reported in the financial statements.

What is an investing activity?

George Corp.'s policy is to report all cash inflows from interest and dividends in the investing section and cash outflows arising from interest and dividends in the financing section.Angela's activities for the year ended December 31,2016 included the following: ∙ Declared a $12,000 cash dividend payable on January 15,2017. ∙ Acquired an automobile costing $30,000 under a finance lease. ∙ Declared and issued a stock dividend valued at $15,000. ∙ Issued $330,000 in ordinary shares. ∙ Accounts payable increased $18,000 during the year. ∙ Paid $980,000 to repurchase bonds.The book value of the bonds was $1,010,000. ∙ Made a $15,000 principal payment on a bank loan. ∙ Interest expense for the period was $8,000.The interest payable account increased $2,000. Required: a.Prepare the cash flows from financing activities section of the statement of cash flows. b.Identify how the activities listed above that are not financing activities would be reported in the statement of cash flows assuming that the statement is prepared using the indirect method.