Exam 14: Statement of Cash Flows

Cash flows from investing activities,as part of the statement of cash flows,include payments for the acquisition of fixed assets.

Zenith Corporation sells some of its used store fixtures.The acquisition cost of the fixtures is $12,500 the accumulated depreciation on these fixtures is $9,750 at the time of sale.The fixtures are sold for $5,300.The value of this transaction in the investing section of the statement of cash flows is

Which of the following types of transactions would be reported as a cash flow from investing activity on the statement of cash flows?

Which of the following should be added to net income in calculating net cash flow from operating activities using the indirect method?

The statement of cash flows is not useful for

Norris Company declared cash dividends of $60,000 during the year.Cash dividends payable were $20,000 at the beginning of the year and $25,000 at the end of the year.The amount of cash Norris Co.used for payment of dividends during the year was

Free cash flow is cash flow from operations less cash used to purchase fixed assets to maintain productive capacity.

The following selected account balances appeared on the financial statements of the Washington Company: Accounts receivable, Jan. 1 Accounts receivable, Dec. 31 Accounts payable, Jan. 1 Accounts payable, Dec. 31 Merchandise inventory, Jan. 1 Merchandise inventory, Dec. 31 Sales Cost of merchandise sold \1 3,000 9,000 4,000 7,000 10,000 15,000 56,000 31.000 The Washington Company uses the direct method to calculate net cash flow from operating activities. -Cash payments for merchandise were

Cash inflows and outflows are not netted in the investing or financing sections of the statement of cash flows but are separately disclosed to give the reader full information.

Based on the following,what is free cash flow? Net cash flow from operating activities \ 318,000 Net cash flow used for investing activities 30,000 Net cash flow from financing activities 30,000 Cash flows from operations include $2,000 for depreciation.Cash flows from investing include the purchase of a replacement asset for $100,000 and the sale of the one used in production,which is now obsolete,for $70,000.Cash flows from financing include $70,000 of borrowing.

Under GAAP,cash receipts from interest and dividends are classified as

The comparative balance sheets of Posner Company,for Years 1 and 2 ended December 31,appear below in condensed form: Year 2 Year1 Cash \ \ Accounts receivable net 37,000 48,000 Inventories 108,500 100,000 Investments - 70,000 Equipment 573,200 450,000 Accumulated depreciation —equipment Accounts payable \ 62,500 \ 43,800 Bonds payable, due Year 2 - 100,000 Common stock, \1 0 par 325,000 285,000 Paid-in capital in excess of par-common stock 80,000 55,000 Retained earnings The income statement for the current year is as follows: Sales \ 625,700 Cost of merchandise sold Gross profit \ 285,700 Operating expenses: Depreciation expense \ 26,000 Other operating expenses Income from operations \ 191,700\ Other income: Gain on sale of investment \4 ,000 Other expense: Interest expense Income before income tax \ 189,700 Income tax Net income Additional data for the current year are as follows: a. Fully depreciated equipment costing $60,000 was scrapped,no salvage,and new equipment was purchased for $183,200. b. Bonds payable for $100,000 were retired by payment at their face amount. c. 5,000 shares of common stock were issued at $13 for cash. d. Cash dividends declared and paid,$25,000. Prepare a statement of cash flow,using the indirect method of reporting cash flows from operating activities.

Balances of the current asset and current liability accounts at the end and beginning of the year are as follows: Cash \ 62,000 \ 73,000 Accounts receivable net 75,000 60,000 Inventories 54,000 47,000 Accounts payable merchandise creditors 43,000 37,000 Salaries payable 2,800 3,800 Sales on account 210,000 Cost of merchandise sold 70,000 Onerating expenses other than depreciation 67000 Use the direct method to prepare the cash flows from operating activities section of a statement of cash flows.

If a business issued bonds payable in exchange for land,the transaction would be reported in a separate schedule on the statement of cash flows.

A building with a cost of $153,000 and accumulated depreciation of $42,000 was sold for a $11,000 gain.When using the indirect method,the cash generated from this investing activity was $121,000.

On the statement of cash flows,the cash flows from financing activities section would include all of the following except

The board of directors declared cash dividends total $168,000 during the year.The comparative balance sheet indicated dividends payable of $46,000 at the beginning of the year and $42,000 at the end of the year.What was the amount of cash payments to stockholders during the year?

Which of the following would not be found in a schedule of noncash investing and financing activities,reported at the end of a statement of cash flows?

Sales for the year were $600,000.Accounts receivable were $100,000 and $80,000 at the beginning and end of the year,respectively.Cash received from customers to be reported on the statement of cash flows using the direct method is

Cash receipts received from the issuance of a mortgage notes payable would be classified as an