Exam 12: Reporting Cash Flows

Netflix Co.reported net income of $213.4 million,net cash provided by operating activities of $151.3 million,total cash flows of $187.7 million,and average total assets of $2,314.8 million at the end of the year.Calculate the cash flow on total assets ratio.

The statement of cash flows reports and proves the net change in cash for a reporting period.

Companies can use either the direct or indirect method to prepare the operating section of the statement of cash flows.

A company reported average total assets of $501,000 in Year 1 and $611,000 in Year 2.Its net operating cash flow in Year 1 was $41,500 and $55,250 in Year 2.Calculate its cash flow on total assets ratio for both years.Comment on the results.

In preparing a company's statement of cash flows using the indirect method,the following information is available: -Net cash provided by operating activities was:

When preparing a statement of cash flows using the indirect method,each of the following should be classified as an operating cash flow except:

Ford Company reports depreciation expense of $40,000 for Year 2.Also,equipment costing $150,000 was sold for its book value in Year 2.There were no other equipment purchases or sales during the year.The following selected information is available for Ford Company from its comparative balance sheet. -Compute the cash received from the sale of the equipment.

Gregor Company reports net income of $305,000 for the year ended December 31.It also reports $93,700 depreciation expense and a $10,000 loss on the sale of equipment.Its comparative balance sheet reveals a $40,200 increase in accounts receivable,a $10,200 decrease in prepaid expenses,a $15,200 increase in accounts payable,a $12,500 decrease in wages payable,and a $100,000 decrease in notes payable.Calculate the cash provided (used)in operating activities using the indirect method.

Based on the following income statement and balance sheet for Bankowski Corporation,determine the cash flows from operating activities using the indirect method.

Information to prepare the statement of cash flows usually comes from three sources: (1)________,(2)________,and (3)________.

A machine with a cost of $130,000 and accumulated depreciation of $85,000 is sold for $50,000 cash.The amount that should be reported in the operating activities section reported under the direct method is:

Investing activities include (a)the purchase and sale of long-term assets,(b)the purchase and sale of short-term investments,and (c)loaning money.

Conversion of preferred stock to common stock is disclosed in the financing section of the statement of cash flows.

Investments that are readily convertible to a known amount of cash and are sufficiently close to their maturity so that the market value is unaffected by interest rate changes are ________.

The cash flow on total assets ratio is computed by dividing average total assets by operating income.

In preparing a company's statement of cash flows using the indirect method,the following information is available: -Net cash provided by operating activities was:

For each of the following items,indicate whether it would be classified as either an (O)operating activity,an (I)investing activity,a (F)financial activity,or a significant (N)noncash financing and investing activity. ________ (1)Cash sales of merchandise. ________ (2)Sale of land for cash. ________ (3)Signed a note payable in exchange for cash. ________ (4)Purchased supplies for cash. ________ (5)Paid cash to settle an account payable. ________ (6)Purchased a warehouse in exchange for shares of its stock. ________ (7)Paid interest on a note payable. ________ (8)Reissued treasury stock. ________ (9)Purchased equipment for cash. ________ (10)Purchased equipment in exchange for a 6-month note payable.

When using the indirect method to calculate and report the net cash provided or used by operating activities,net income is adjusted for all but which of the following?

Use the following company information to calculate net cash provided or used by investing activities: (a)Equipment with a book value of $175,000 and an original cost of $300,000 was sold at a loss of $17,000. (b)Paid $62,000 cash for a new truck. (c)Sold land costing $32,000 for $36,000 cash,realizing a $4,000 gain. (d)Purchased treasury stock for $61,000 cash. (e)Long-term investments in stock are sold for $41,000 cash,realizing a gain of $3,500.

If a company borrows money from a bank,the interest paid on this loan should be reported on the statement of cash flows as a(n):