Avatar Company uses the indirect method to prepare its statement of cash flows. Please refer to the following portion of the comparative balance sheet: \[\begin{array} { | l | r | r | r | } \hline&2014 & 2013 & \text { Increase/decrease }\\ \hline \text { Common stock } & \$ 30,000 & \$ 2,000 & \$ 28,000 \\ \hline \text { Retained earnings } & 113,000 & 74,000 & 39,000 \\ \hline \text { Treasury stock } & ( 8,000 & ( 5,000 ) & ( 3,000 ) \\ \hline \text { Total equity } & \$ 135,000 & \$ 71,000 & \$ 64,000 \\ \hline \end{array}\] Note: Net income for the year was $49,000. - Based on the above, how much was paid out in dividends?

A) $28,000 B) $39,000 C) $3,000 D) $10,000 A) $28,000 B) $39,000 C) $3,000 D) $10,000

Avatar Company uses the direct method to prepare its statement of cash flows. Please refer to the following information reported for the year 2014: $\begin{array}{lr} \text { Cost of goods sold } & \$ 110,000 \\ \text { Inventory beginning balance: } & \$ 25,000 \\ \text { Inventory ending balance: } & \$ 53,000 \\ \text { Accounts payable beginning balance: } & \$ 6,000 \\ \text { Accounts payable ending balance: } & \$ 4,000 \\ \text { Operating expenses } & \$ 23,000 \\ \text { Accrued liabilities, beginning balance: } & \$ 1,000 \\ \text { Accrued liabilities, ending balance: } & \$ 2,000 \end{array}$ In the operating activities section of the statement of cash flows, what amount will be shown for payments to suppliers?

A) $136,000 B) $132,000 C) $118,000 D) $162,000 A) $136,000 B) $132,000 C) $118,000 D) $162,000

Parmesan Company uses the direct method for its statement of cash flow. It reports the following information regarding the year 2013: \[\begin{array}{l} \text { From the income statement: }\\ \begin{array} { l r } \text { Revenues: } & \$ 240,000 \\ \text { Cost of goods sold: } & \$ 190,000 \\ \text { Operating expenses: } & \$ 25,000 \end{array}\\ \begin{array} { c c c } \text { From the balance sheet: } & \text { Beginning balance } & \text { Ending balance } \\ \text { Accounts receivable: } & \$ 12,000 & \$ 15,000 \\ \text { Inventory: } & \$ 22,000 & \$ 18,000 \\ \text { Accounts payable: } & \$ 7,000 & \$ 12,000 \\ \text { Accrued liabilities: } & \$ 3,000 & \$ 1,200 \end{array} \end{array}\] -On the statement of cash flows, what amount will be shown for collections from customers?

A) $237,000 B) $243,000 C) $240,000 D) $50,000 A) $237,000 B) $243,000 C) $240,000 D) $50,000

Avatar Company uses the indirect method to prepare its statement of cash flows. Please refer to the following portion of the comparative balance sheet: \[\begin{array} { | l | r | r | r | } \hline&2014 & 2013 & \text { Increase/decrease }\\ \hline \text { Common stock } & \$ 30,000 & \$ 2,000 & \$ 28,000 \\ \hline \text { Retained earnings } & 113,000 & 74,000 & 39,000 \\ \hline \text { Treasury stock } & ( 8,000 & ( 5,000 ) & ( 3,000 ) \\ \hline \text { Total equity } & \$ 135,000 & \$ 71,000 & \$ 64,000 \\ \hline \end{array}\] Note: There were no stock retirements during the year. There were no sales of treasury stock during the year. - Which of the following statements would be TRUE?

A) There was zero net cash flow from transactions involving common stock. B) There was a negative cash flow of $28,000 from the issuance of common stock. C) There was a positive cash flow of $28,000 from the issuance of common stock. D) There was positive cash flow of $30,000 from issuance of common stock. A) There was zero net cash flow from transactions involving common stock. B) There was a negative cash flow of $28,000 from the issuance of common stock. C) There was a positive cash flow of $28,000 from the issuance of common stock. D) There was positive cash flow of $30,000 from issuance of common stock.

Avatar Company uses the direct method to prepare its statement of cash flows. Please refer to the following information reported for the year 2014: $\begin{array}{ll} \text { Operating expenses } & \$ 23,000 \\ \text { Accrued liabilities beginning balance: } & \$ 1,000 \\ \text { Accrued liabilities ending balance: } & \$ 2,000 \end{array}$ What amount was paid to suppliers for operating expenses on a cash basis?

A) $26,000 B) $20,000 C) $22,000 D) $24,000 A) $26,000 B) $20,000 C) $22,000 D) $24,000

Avatar Company uses the indirect method to prepare its statement of cash flows. Please refer to the following portion of the comparative balance sheet: \[\begin{array} { | l | r | r | r | } \hline&2014 & 2013 & \text { Increase/decrease }\\ \hline \text { Common stock } & \$ 30,000 & \$ 2,000 & \$ 28,000 \\ \hline \text { Retained earnings } & 113,000 & 74,000 & 39,000 \\ \hline \text { Treasury stock } & ( 8,000 & ( 5,000 ) & ( 3,000 ) \\ \hline \text { Total equity } & \$ 135,000 & \$ 71,000 & \$ 64,000 \\ \hline \end{array}\] Note: Net income for the year was $49,000. - How will dividend payments be shown on the statement of cash flows?

A) Positive $10,000 in the financing section B) Negative $10,000 in the financing section C) Positive $10,000 in the investing section D) Negative $10,000 in the investing section A) Positive $10,000 in the financing section B) Negative $10,000 in the financing section C) Positive $10,000 in the investing section D) Negative $10,000 in the investing section

Exam 14: The Statement of Cash Flows

Sonesta Company owed one of its creditors $250,000, but did not have enough cash to repay the debt. Following lengthy negotiations, the parties agreed that Sonesta would issue 100,000 shares of common stock to settle the debt. How would this transaction be shown on the statement of cash flows?

(Multiple Choice)

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Question 81

Avatar Company uses the indirect method to prepare its statement of cash flows. Using the worksheet shown below, please enter the adjustments needed to record the following transactions: .Issued common stock for $28,000. .Issued new long-term notes payable for $34,000. . Repaid long-term notes payable for $40,000.

(Essay)

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Question 82

Which of the following would be considered an operating activity on the statement of cash flows?

(Multiple Choice)

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Question 83

Creditor and stockholder transactions are considered ________ activities.

(Multiple Choice)

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Question 84

Avatar Company uses the indirect method to prepare its statement of cash flows. Please refer to the following portion of the comparative balance sheet: 2014 2013 Increase/decrease Common stock \ 30,000 \ 2,000 \ 28,000 Retained earnings 113,000 74,000 39,000 Treasury stock (8,000 (5,000) (3,000) Total equity \ 135,000 \ 71,000 \ 64,000 Note: Net income for the year was $49,000. - Based on the above, how much was paid out in dividends?

(Multiple Choice)

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Question 85

Which one of the following is a principal function of the statement of cash flows?

(Multiple Choice)

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Question 86

Avatar Company uses the direct method to prepare its statement of cash flows. Please refer to the following information reported for the year 2014: Cost of goods sold \ 110,000 Inventory beginning balance: \ 25,000 Inventory ending balance: \ 53,000 Accounts payable beginning balance: \ 6,000 Accounts payable ending balance: \ 4,000 Operating expenses \ 23,000 Accrued liabilities, beginning balance: \ 1,000 Accrued liabilities, ending balance: \ 2,000 In the operating activities section of the statement of cash flows, what amount will be shown for payments to suppliers?

(Multiple Choice)

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Question 87

Parmesan Company uses the direct method for its statement of cash flow. It reports the following information regarding the year 2013: From the income statement: Revenues: \ 240,000 Cost of goods sold: \ 190,000 Operating expenses: \ 25,000 From the balance sheet: Beginning balance Ending balance Accounts receivable: \ 12,000 \ 15,000 Inventory: \ 22,000 \ 18,000 Accounts payable: \ 7,000 \ 12,000 Accrued liabilities: \ 3,000 \ 1,200 -On the statement of cash flows, what amount will be shown for collections from customers?

(Multiple Choice)

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Question 88

Where are noncash investing and financing activities reported?

(Multiple Choice)

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Question 89

Free cash flow is the measure of cash available from operations after paying for planned investment acquisitions and planned dividend disbursements.

(True/False)

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Question 90

Avatar Company uses the indirect method to prepare its statement of cash flows. Please refer to the following portion of the comparative balance sheet: 2014 2013 Increase/decrease Common stock \ 30,000 \ 2,000 \ 28,000 Retained earnings 113,000 74,000 39,000 Treasury stock (8,000 (5,000) (3,000) Total equity \ 135,000 \ 71,000 \ 64,000 Note: There were no stock retirements during the year. There were no sales of treasury stock during the year. - Which of the following statements would be TRUE?

(Multiple Choice)

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Question 91

Operating activities include activities that affect long-term liabilities and stockholders' equity.

(True/False)

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Question 92

The financing activities section of the statement of cash flows includes paying dividends and paying off loans.

(True/False)

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Question 93

Avatar Company uses the direct method to prepare its statement of cash flows. Please refer to the following information reported for the year 2014: Operating expenses \ 23,000 Accrued liabilities beginning balance: \ 1,000 Accrued liabilities ending balance: \ 2,000 What amount was paid to suppliers for operating expenses on a cash basis?

(Multiple Choice)

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Question 94

Which of the following sections from the statement of cash flows includes activities that increase and decrease long-term liabilities and stockholders' equity?

(Multiple Choice)

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Question 95

Which of the following transactions would be shown in the noncash investing and financing activities section of the statement of cash flows?

(Multiple Choice)

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Question 96

Avatar Company uses the indirect method to prepare its statement of cash flows. Using the worksheet shown below, please enter the adjustments needed to record the following transactions: .Purchased treasury stock for $3,000. . Paid dividends of $10,000.

(Essay)

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Question 97

Avatar Company uses the indirect method to prepare its statement of cash flows. Please refer to the following portion of the comparative balance sheet: 2014 2013 Increase/decrease Common stock \ 30,000 \ 2,000 \ 28,000 Retained earnings 113,000 74,000 39,000 Treasury stock (8,000 (5,000) (3,000) Total equity \ 135,000 \ 71,000 \ 64,000 Note: Net income for the year was $49,000. - How will dividend payments be shown on the statement of cash flows?

(Multiple Choice)

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Question 98

Which of the following transactions would be shown in the noncash investing and financing activities section of the statement of cash flows?

(Multiple Choice)

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Question 99

The only part that differs in a statement of cash flows using the direct method from one using the indirect method is the:

(Multiple Choice)

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Question 100

Sonesta Company owed one of its creditors $250,000, but did not have enough cash to repay the debt. Following lengthy negotiations, the parties agreed that Sonesta would issue 100,000 shares of common stock to settle the debt. How would this transaction be shown on the statement of cash flows?

Which of the following would be considered an operating activity on the statement of cash flows?

Creditor and stockholder transactions are considered ________ activities.

Which one of the following is a principal function of the statement of cash flows?

Where are noncash investing and financing activities reported?

Free cash flow is the measure of cash available from operations after paying for planned investment acquisitions and planned dividend disbursements.

Operating activities include activities that affect long-term liabilities and stockholders' equity.

The financing activities section of the statement of cash flows includes paying dividends and paying off loans.

Which of the following sections from the statement of cash flows includes activities that increase and decrease long-term liabilities and stockholders' equity?

Which of the following transactions would be shown in the noncash investing and financing activities section of the statement of cash flows?

Avatar Company uses the indirect method to prepare its statement of cash flows. Using the worksheet shown below, please enter the adjustments needed to record the following transactions: .Purchased treasury stock for $3,000. . Paid dividends of $10,000.

Which of the following transactions would be shown in the noncash investing and financing activities section of the statement of cash flows?

The only part that differs in a statement of cash flows using the direct method from one using the indirect method is the:

Corporations: Paid-In Capital and the Balance Sheet

Corporations: Effects on Retained Earnings and the Income Statement

Financial Statement Analysis

Introduction to Management Accounting

Job Order and Process Costing

Activity-Based Costing and Other Cost Management Tools

Cost-Volume-Profit Analysis

Short-Term Business Decisions

Capital Investment Decisions and the Time Value of Money

The Master Budget and Responsibility Accounting

Flexible Budgets and Standard Costs

Performance Evaluation and the Balanced Scorecard

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