Exam 21: Statement of Cash Flows Revisited

The following information for Connor Company is available at December 31,2014,and for the year then ending: The book value of equipment sold was $300.All dividends declared were cash dividends. Required: Prepare a statement of cash flows for Connor Company for the year ending December 31,2014,using the direct method.

Amortization of the premium on bonds payable is subtracted from net income in the reconciliation of net income to cash flows from operations because

When preparing a reconciliation of net income to cash from operations,an increase in the ending inventory over the beginning inventory will result in an adjustment to reported net income because

At the beginning of the year,a firm leased equipment on a capital lease,capitalizing $50,000 in both its lease liability and leased assets accounts.The contract calls for payments each December 31 of $10,000.The lessee's annual reporting period ends December 31 and the contract reflects 10% interest.The lessee made the first payment as required.Which of the following should be reflected on the statement of cash flows under the indirect method for the first year of the contract (ignoring noncash disclosures)?

On a statement of cash flows prepared using the direct method,cash paid for income taxes would be income tax expense minus

How should the sale of $3,000 worth of cash equivalents costing $2,500 be reflected on the statement of cash flows prepared under the indirect method?

In the preparation of a statement of cash flows,adjustments to net income to reconcile net income to cash from operating activities include

Choose the combination that best reflects the appropriate classification of cash paid for operating,investing and financing activities.