Exam 13: The Statement of Cash Flows

Using the indirect method,calculate the amount of net cash flows from operating activities from the following data.Show your work.

Following are the income statement and other information for Polk Corporation. Accounts receivable (net)decreased by $1,500 during the year.Inventory increased by $900,and Accounts Payable decreased by $1,200 during the year.Income Taxes Payable increased by $300 during the year. Prepare a schedule of cash flows from operating activities using the indirect method.

If the indirect method is used to prepare a statement of cash flows,which of the following would be added to net income to arrive at net cash flows from operating activities?

During the year,Heckart Corporation had net sales of $250,000,net income of $25,000,average total assets of $350,000,dividend payments of $17,500,net cash flows from operating activities of $37,500,purchases of plant assets of $37,500,and sales of plant assets of $45,000.Cash flow yield equals (Round amounts to one decimal place)

The direct method of preparing a statement of cash flows

The calculation of free cash flow could include all of the following except

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

Dividends paid are reflected in the operating activities section of the statement of cash flows.

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 $70,000,purchases of plant assets of $75,000,and sales of plant assets of $90,000.Free cash flow equals

The financing activities section of the statement of cash flows includes transactions or activities from the income statement and also takes into account stockholders' equity.

A negative free cash flow indicates that the company has met all its planned cash commitments and has cash available to reduce debt or to expand.

A schedule of noncash investing and financing activities is required if there are noncash investing and financing transactions.

The most future-directed of the basic financial statements is the

Match each definition with the correct term below. -Free cash flow

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

Purchases and sales of long-term investments for the period should be netted for disclosure in the investing activities section of the statement of cash flows.

A U.S.Treasury bill with an original maturity of one year or less is considered a cash equivalent.

Royer Corporation engaged in this transaction: Received dividends on securities held. Indicate which section,if any,the above transaction would appear in,or relate to,on a statement of cash flows.

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 $52,000,purchases of plant assets of $75,000,and sales of plant assets of $90,000.Cash flows to assets equals (Round amounts to one decimal place)

If net cash flows from operating activities were $374,000,net income were $100,000,and net sales were $1,200,000,the cash flow yield would equal (Round amounts to one decimal place)