Exam 13: The Statement of Cash Flows

The following 2012 information relates to Raddatz,Inc.: a.Calculate the net cash flows from operating activities.Show your work. b.Calculate the net cash flows from investing activities.Show your work. c.Calculate the net cash flows from financing activities.Show your work. d.Calculate the net change in cash.Show your work.

The acquisition of treasury stock with cash is shown as an investing activity on the statement of cash flows.

Royer Corporation engaged in this transaction: Issued stock for equipment. Indicate which section,if any,the above transaction would appear in,or relate to,on a statement of cash flows.

Bamberg Corporation transferred cash to a money market account.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 2 would be found on the statement of cash flows in the

Investing activities centers on the long-term assets shown on the balance sheet and does not include any short-term investments shown under current assets on the balance sheet.

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

The primary purpose of the statement of cash flows is to provide information

If net cash flows from operating activities were $316,000,net income were $200,000,and net sales were $2,000,000,cash flows to sales would equal (Round amounts to one decimal place)

The following information relates to Lonborg Corporation for the year ended December 31,2012: a.Calculate the net cash flows from operating activities.Show your work. b.Calculate the net cash flows from investing activities.Show your work. c.Calculate the net cash flows from financing activities.Show your work. d.Calculate the net change in cash.Show your work.

For 2013,Fairfield Corporation had average total assets of $1,300,000,net sales of $1,125,000,net income of $125,000,net cash flows from operating activities of $150,000,dividend payments of $62,500,purchases of plant assets of $150,000,and sales of plant assets of $137,500.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.

Royer Corporation engaged in this transaction: Retired long-term debt with cash. Indicate which section,if any,the above transaction would appear in,or relate to,on a statement of cash flows.

Depreciation expense is one item added to net income as per the income statement to arrive at net cash flows from operating activities under the indirect method.

Cash inflows and outflows are not as subject to manipulation as earnings are.

When a statement of cash flows is prepared using the indirect method,

Repayments of accounts payable or accrued liabilities are considered repayments of loans under financing activities.

During the year,Ollie's Outdoor Outfitters issued 20,000 shares of common stock in exchange for a prime piece of land.Two employees of the accounting department,Audrey and Neil,disagree as to the appearance of this particular transaction on the statement of cash flows.Audrey believes it to be a significant noncash transaction,and it therefore should be presented as such at the bottom of the statement.Neil contends that because this transaction did not cause any cash to flow in or out of the company,it has no place on the statement of cash flows.Who is correct and why?

Kershaw Company sold an asset that cost $240,000 and had a book value of $144,000 for $180,000.The amount recorded in the investing activities section for this transaction would be a

Under the indirect method,gains or losses from the sale of equipment used in operations would appear as adjustments in the cash flows from operating activities section of the statement of cash flows.

Determining net cash flows from operating activities using the indirect method reveals changes in the accounts receivable account.