Exam 15: Statement of Cash Flows

Clover Company had the following information for the years 2014 and 2013: Required: Prepare the operating activities section of the statement of cash flows using the direct method.

Cash flow activities that include the cash effect of transactions that create revenues and expenses and thus enter into the determination of net income are classified as operating activities on the statement of cash flows.

An advantage to using a worksheet to organize the information of preparation of the statement of cash flows is that it uses a spreadsheet format allowing the preparer to use a PC and spreadsheet software.

Playtown Company's income statement for last year appears below: Playtuwn Compary Income Statement Sales \ 100,000 Less: Cost of goods sold 60,000 Gross margin 40,000 Less: Operating expenses 25,000 Income before income taxes 15,000 Less: Income taxes 6,000 Net income \ 19,000 The beginning and ending balances for last year are available for the following selected accounts: Required: Using the direct method, prepare the operating activities section of the statement of cash flows.

Total operating expenses on Harmon Company's income statement for last year totaled $370,000. During the year accrued liabilities increased by $18,000, and prepaid expenses increased by $25,000. Depreciation expense for the year was $45,000. Based on this information, operating expenses adjusted to cash basis under the direct method on the statement of cash flows would be

Which of the following would not be needed to determine net cash provided by operating activities?

Companies can use two different methods to report the amount of cash flow from their operating activities on the statement of cash flows.

Stacy Company's net income last year was $27,000. Changes in selected balance sheet accounts for the year appear below: Based solely on this information, the net cash flows from operating activities under the indirect method on the statement of cash flows would be

Acquiring new equipment, selling long-term investments, and purchasing land are all examples of _______________.

In developing the cash flows from operating activities, most companies in the United States

How is it possible for a company to suffer a net loss for a given year, yet produce a positive net cash flow from operating activities?

In calculating cash flows from operating activities using the indirect method, an increase in inventories is

Starting with net income and adjusting it for items that affected reported net income but which did not affect cash is called the

The format that should be followed in preparing the statement of cash flows is known as the ______________.

The Star City reported net loss of $50,000. Cash from operating activities

On the statement of cash flows, the indirect method adjusts net income to determine the net cash flows from operating activities.

Under the indirect method of determining the net cash from operating activities on the statement of cash flows, depreciation is subtracted from the net income for the period.

Which of the following investing activities results in a cash inflow?

A loss on the sale of equipment is subtracted from net income in determining net cash from operating activities under the indirect method.

Bradley Company's net income last year was $77,000. Changes in the company's balance sheet accounts for the year appear below: The company declared and paid cash dividends of $37,000 last year. Required: