Exam 13: The Statement of Cash Flows

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

If the indirect method is used,each of the following is a proper adjustment to net income to arrive at net cash flows from operating activities except

Management never uses the statement of cash flows to determine whether short-term financing is necessary to pay current liabilities.

Harry Company purchased land for $500,000 by issuing bonds for $400,000 and paying the remaining $100,000 in cash.Harry also sold a building that cost $980,000 and had accumulated depreciation of $434,000 for $640,000.Net cash flows from investing activities totaled

Analysis of the financing activities section of the statement of cash flows will disclose

Cash equivalents do not include

Match each definition with the correct term below. -Operating activities

Laguna's Corporation sold investments for $102,000 cash that cost $90,000.The journal entry to record the increase in cash flow is:

Bamberg Corporation sold buildings and equipment for cash.Indicate which section,if any,this transaction would appear in,or relate to,on a statement of cash flows.

Royer Corporation engaged in this transaction: Issued long-term note for plant assets. Indicate which section,if any,the above transaction would appear in,or relate to,on a statement of cash flows.

Match each definition with the correct term below. -Cash equivalents

Investors and creditors would find the statement of cash flows least useful in assessing

When preparing a statement of cash flows using the indirect method,an increase in accounts payable is deducted from net income.

When preparing a statement of cash flows using the indirect method,an increase in accounts receivable is deducted from net income.

Match each definition with the correct term below. -Cash flow to assets

How are transfers between cash and cash equivalents treated on a statement of cash flows?

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

Following are the income statement and other information for Pickens Corporation. Accounts receivable (net)decreased by $2,250 during the year.Inventory increased by $1,350,and Accounts Payable decreased by $1,800 during the year.Income Taxes Payable increased by $450 during the year. Prepare a schedule of cash flows from operating activities using the indirect method.

Florence Corporation sold for $20,000 plant assets that cost $40,000 and that had an accumulated depreciation of $8,000.The journal entry to record the transaction is:

Royer Corporation engaged in this transaction: Paid income taxes. Indicate which section,if any,the above transaction would appear in,or relate to,on a statement of cash flows.