Exam 21: Statement of Cash Flows

Cost of merchandise sold for the year was $850,000.Inventories were $60,000 and $90,000 at the beginning and end of the year,respectively.There were no changes in accounts payable from the beginning to the end of the year.Cash payment for merchandise to be reported on the cash flow statement using the direct method is:

If,on the comparative balance sheet,Accounts Payable has decreased,the amount of decrease would be:

For each of the following items, indicate (by placing an X) whether the item would be found on the statement of cash flows in column 1, the direct approach for determining the cash flows from operating activities, column 2, the indirect approach for determining the cash flows from operating activities, column 3, cash flows from investing activities, column 4, cash flows from financing activities. If you identify that an item affects the cash flows from operation, indirect method, also indicate whether it will be increasing (+) or decreasing (-) the cash flows. - Col 1 Operating Direct Col 2 Operating Indirect Col 3 Investing Col 4 Financing Increase in prepaid expenses

A cash outflow from a financing activity would be:

A sale of fixed assets for cash is a(n):

If 2,000 shares of stock were sold for $10 per share,cash flow from financing activities would decrease $20,000.

Financing activities include transactions with owners and creditors.

When preparing the statement of cash flows by the indirect method,if accumulated depreciation increases the difference is:

Which is not a cash outflow from an operating activity?

Indicate the effect that each of the following transactions has on the cash balance.Use (I)for increase,(D)for decrease,and (N)for no change. a)________ Increase in inventory b)________ Sale of common stock for cash c)________ Payment of dividends d)________ Depreciation expense for the period e)________ Payment of long-term debt f)________ Loan of money to another company g)________ Increase in Accounts Payable h)________ Purchase of equipment on account

If a company issues a comparative balance sheet showing the change in the cash balance,a statement of cash flows is not needed.

If equipment is sold for $50,000,it is shown in the financing activities section.

Identify each of the following transactions as an operating activity (O),an investing activity (I),a financing activity (F),or a transaction that is not reported on the statement of cash flows (N). a)________ Receipt of interest b)________ Increase of accounts payable c)________ Borrowed money from a bank d)________ Purchase of building for cash e)________ Declaration of cash dividends f)________ Sold plant equipment for cash g)________ Increase of accounts receivable h)________ Payment on principal of a note

For each of the following items, indicate (by placing an X) whether the item would be found on the statement of cash flows in column 1, the direct approach for determining the cash flows from operating activities, column 2, the indirect approach for determining the cash flows from operating activities, column 3, cash flows from investing activities, column 4, cash flows from financing activities. If you identify that an item affects the cash flows from operation, indirect method, also indicate whether it will be increasing (+) or decreasing (-) the cash flows. - Col 1 Operating Direct Col 2 Operating Indirect Col 3 Investing Col 4 Financing Net loss

Trundle Corporation reported net income of $40,000; depreciation expense of $1,000; sales of additional common shares of $25,000; and a decrease in Accounts Payable of $8,000.Net cash flow from operating activities using the indirect method is:

Smith Corporation reported net income of $54,000,depreciation expenses of $10,000,an increase in Accounts Payable of $3,000 and an increase in Accounts Receivable of $1,500.Under the indirect method,net cash flow from operating activities is:

For each of the following items, indicate (by placing an X) whether the item would be found on the statement of cash flows in column 1, the direct approach for determining the cash flows from operating activities, column 2, the indirect approach for determining the cash flows from operating activities, column 3, cash flows from investing activities, column 4, cash flows from financing activities. If you identify that an item affects the cash flows from operation, indirect method, also indicate whether it will be increasing (+) or decreasing (-) the cash flows. - Col 1 Operating Direct Col 2 Operating Indirect Col 3 Investing Col 4 Financing Cash paid for salaries or wages

To determine cash received from customers for the cash flow statement using the direct method,a decrease in accounts receivable is added to sales.

Fidelity Furniture's Net Income was $25,000.Other accounts that changed included: Accounts Receivable decreased by $18,000; Merchandise Inventory increased by $7,000; Accounts Payable increased by $4,000; and Salaries Payable decreased by $3,000.The amount of Net Cash Flow from Operating Activities using the indirect method is:

The Accounts Receivable balance has decreased during the year.How would this event affect the statement of cash flows operations section-indirect method?