Exam 13: The Statement of Cash Flows

Bamberg Corporation converted loans payable to stock.Indicate which section,if any,this transaction would appear in,or relate to,on a statement of cash flows.

Use this information to answer the following question. Oconee Corporation is preparing a statement of cash flows. The following transactions occurred during the year: 1. Sold machinery for $18,000 cash. 2. Purchased a building for $160,000 cash. 3. Issued $140,000 worth of stock to acquire an airplane. 4. Converted long-term bonds by issuing $200,000 worth of stock. 5. Declared and paid a $20,000 cash dividend. Transaction 1 would be found on the statement of cash flows in the

To determine whether a company's operations are covering its dividend payments,it is best to focus on which of the following sections of the statement of cash flows?

Amortization expense is added to net income in the cash flows from operating activities section of the statement of cash flows prepared using the indirect method.

Why does the acquisition of land in exchange for common stock qualify as a noncash investing and financing transaction?

For 2013,Dorchester Corporation had average total assets of $520,000,sales of $450,000,net income of $50,000,net cash flows from operating activities of $75,000,dividend payments of $25,000,purchases of plant assets of $60,000,and sales of plant assets of $55,000.Using this information,compute (a)cash flow yield,(b)cash flows to sales,(c)cash flows to assets,and (d)free cash flow.Round amounts to one decimal place.

The activity from the Long-Term Investments account for Newberry Corporation appears below.In addition,the income statement shows a loss on the sale of investments of $64,000. Based on the information given,compute the amounts to be shown and indicate how they would appear on the statement of cash flows.Assume that the indirect method is being used and that the investments were purchased for cash.

The net income for the period would appear in the cash flows from financing activities section of a statement of cash flows prepared using the indirect method.

A cash flow yield of 2.0 times is considered better than one of 2.5 times.

Decreases in current assets other than cash have positive effects on cash flows and increases in current assets have negative effects on cash flows.

Laguna's Corporation issued 30,000 shares of $5 par value common stock for $300,000.The journal entry to record the transaction is:

Laguna's Corporation purchased treasury stock for $100,000.The journal entry to record the transaction is:

Investments that Edgefield Corporation sold for $500,000,which cost $425,000,would appear under investing activities as a

Provide the components for the calculation of free cash flow.

During the year,Clarendon Corporation had net sales of $500,000,net income of $50,000,average total assets of $700,000,dividend payments of $35,000,net cash flows from operating activities of $86,000,purchases of plant assets of $75,000,and sales of plant assets of $90,000.Cash flows to sales equals (Round amounts to one decimal place)

Assume the indirect method is used to compute net cash flows from operating activities.For this item extracted from the financial statements-Interest Expense (assume that cash payments are equal to amount reported)-indicate the effect on net income in arriving at net cash flows from operating activities by choosing one of the following:

Assume the indirect method is used to compute net cash flows from operating activities.For this item extracted from the financial statements-Decrease in Accrued Liabilities-indicate the effect on net income in arriving at net cash flows from operating activities by choosing one of the following:

How are cash equivalents treated on a statement of cash flows?

The payment of taxes would be included in the investing activities section of the statement of cash flows.

The indirect method of preparing a statement of cash flows