Exam 12: Reporting Cash Flows

A company's income statement showed the following: net income,$124,000 and depreciation expense,$30,000.An examination of the company's current assets and current liabilities showed the following changes: accounts receivable decreased $9,400; merchandise inventory increased $18,000; and accounts payable increased $3,400.Calculate the net cash provided or used by operating activities.

Which of the following transactions or events should be reported as a source of cash from operating activities when using the direct method?

An investment that is readily convertible to a known amount of cash and that is sufficiently close to its maturity date so that its market value is unaffected by interest rate changes is a(n):

A company had net cash flows from operations of $120,000,cash flows from financing of $330,000,total cash flows of $500,000,and average total assets of $2,500,000.The cash flow on total assets ratio equals:

Describe the format of the statement of cash flows,including the reporting of significant noncash investing and financing activities.

The accountant for Crusoe 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?

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

The payment of cash dividends to shareholders is classified as a financing activity.

A noncash investing activity should be disclosed in a note to the statement of cash flows or on a separate schedule.

Define and explain significant noncash investing and financing activities and the method of reporting them on the statement of cash flows.

Cash flows from interest received on loans are reported in the statement of cash flows as part of:

A company had average total assets of $3,216,000,total cash flows of $1,320,000,cash flows from operations of $554,000,and cash flows for plant assets of $850,000.The cash flow on total assets ratio equals:

When the operating activities section of the statement of cash flows is reported using the direct method:

The payment of cash dividends never changes the balance of retained earnings.

Cash flow statements help users decide whether a company has enough cash to pay its debts.

The appropriate section in the statement of cash flows for reporting the receipt of cash dividends from investments in securities is:

Explain how cash flows from investing and financing activities are determined.

On a spreadsheet used to prepare the operating activities section of the statement of cash flows,depreciation expense does not require an entry in the Analysis of Changes columns because it is a noncash item.

Cash receipts and cash payments are classified as operating,investing,or financing activities on the statement of cash flows.

A method of computing and reporting the net cash provided (used)by operating activities that lists the major items of operating cash receipts,and then subtracts the major items of operating cash payments.