Exam 11: The Statement of Cash Flows

Operating expenses-other than depreciation-for the year were $335,000.Prepaid expenses decreased by $7,000.Cash payments for operating expenses to be reported on the cash flow statement using the direct method would be:

Changes in the long-term assets and long-term liabilities accounts must be analyzed to determine how they are presented in the operating section of a cash flow statement.

The Accounts Receivable balance has decreased during the year.How would this affect the Statement of Cash Flows operations section under the indirect method?

Green Timber reported net income of $52,000;depreciation expenses of $13,000;a gain on a land sale of $3,000;and a decrease in Accounts Receivable of $1,500.Under the indirect method,net Cash Flows from operations is:

Robbins Company distributed a 5% common stock dividend,this will be reported in the financing activity section of the cash flow statement.

For a business to remain successful,investing activities must be the main source of its cash over the long run.

Transactions involving the purchase and sale of long-term assets,lending money and collecting the principal on loans are called:

Because depreciation is not cash-based,it is NOT reported in the direct method of the Statement of Cash Flows.

Cost of goods sold for the year was $700,000.Inventory was $80,000 at the beginning of the year and $35,000 at the end of the year.There were no changes in the amount in account payable for the year.Cash payment for merchandise to be reported under the direct method is:

The operating section of a Statement of Cash Flows using the indirect method is prepared differently from the operating section of a Statement of Cash Flows using the direct method.

Cash received from issuing stock would be included in financing activities.

An example of a cash outflow from investing activities is:

Current assets on the Balance Sheet would be affected by and be part of operating activities.