Exam 12: Reporting Cash Flows

The accountant for TI Company is preparing the company's statement of cash flows for the fiscal year just ended.The following information is available: What is the ending balance for retained earnings?

What are the steps involved in the preparation of the statement of cash flows?

A purchase of land in exchange for a long-term note payable is reported in the investing section of the statement of cash flows.

Investing activities include: (a)the purchase and sale of long-term assets,(b)loaning money in return for notes receivable,and (c)the purchase and sale of short-term investments.

The direct method of reporting operating cash flows:

Applying the direct method,the gain or loss from retirement of debt is reported under cash flows from operating activities on the statement of cash flows.

Barclays Company is preparing the company's statement of cash flows for the fiscal year just ended.The following information is available: -The amount of cash paid for dividends was:

The direct method separately lists each major item of operating cash receipts and cash payments.

When preparing the operating activities section of the statement of cash flows using the indirect method,non-operating gains are added to net income.

Information to prepare the statement of cash flows usually comes from (a)comparative balance sheets,(b)current income statement,and (c)additional information.

If a company is using the indirect method to prepare the statement of cash flows,identify where an increase in the accounts receivable account should be reported:

Use the following information about the current year's operations of a company to calculate the cash paid for merchandise.

The statement of cash flows helps analysts evaluate all but which of the following?

Use the following financial statements and additional information to (1)prepare a statement of cash flows for the year ended December 31,Year 2 using the indirect method,and (2)compute the company's cash flow on total assets ratio for Year 2. Additional Information a.A $20,000 note payable is retired at its carrying value in exchange for cash. b.The only changes affecting retained earnings are net income and cash dividends paid. c.New equipment is acquired for $120,000 cash. d.Received cash for the sale of equipment that had cost $85,000,yielding a gain of $4,700. e.Prepaid expenses relate to Other Expenses on the income statement. f.All purchases and sales of merchandise inventory are on credit.

The statement of cash flows reports:

A machine with a cost of $130,000,accumulated depreciation of $85,000,and current year depreciation expense of $17,000 is sold for $40,000 cash.The amount that should be reported as a source of cash under cash flows from investing activities is:

The statement of cash flows reports all but which of the following:

Use the following information to calculate cash received from dividends:

A decrease in the inventory account during the year should be reported on the indirect method statement of cash flows as:

For each of the following items,indicate whether it would be classified as an (O)operating activity,an (I)investing activity,a (F)financing activity,or a significant (N)noncash financing and investing activity. ________ (1)Received interest from investments in trading securities. ________ (2)Collected accounts receivable from customers. ________ (3)Issued bonds payable for cash. ________ (4)Paid wages to employees. ________ (5)Issued stock for cash. ________ (6)Sold equipment for cash. ________ (7)Purchased land in exchange for a note payable. ________ (8)Paid cash dividends. ________ (9)Received dividends from stock investments. ________ (10)Purchases of land for cash.