Exam 12: Reporting Cash Flows

Alvez 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.

Which one of the following is representative of typical cash flows from operating activities?

All of the following statements related to reporting cash flows from operating activities under U.S.GAAP and IFRS are true except:

In preparing Marjorie Company's statement of cash flows for the most recent year,the following information is available: Purchase of equipment \2 60,000 Proceeds from the sale of equipment 87,000 Purchase of land 91,000 Net cash flows from investing activities for the year were:

The direct method of reporting operating cash flows:

The following transactions and events occurred during the year.Assuming that this company uses the indirect method to report cash provided by operating activities,indicate where each item would appear on its statement of cash flows by placing an x in the appropriate column.

The statement of cash flows reports:

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. -Sold equipment for cash.

Managers only use the cash flow statement to evaluate the net cash increase or decrease,and do not pay much attention to the details of cash flows from operating activities,cash flows from investing activities,and cash flows from financing activities.

Common uses of the statement of cash flows include all but which of the following?

Activities that involve the production or purchase of merchandise and the sale of goods and services to customers,including expenditures related to administering the business,are classified as:

The cash flows from operating activities section of an indirect method of cash flows begins with net income or loss.

When preparing the operating activities section of the statement of cash flows using the indirect method,depreciation is subtracted from net income.

When preparing the operating activities section of the statement of cash flows using the indirect method,decreases in current operating assets are added to net income.

When preparing the operating section of the statement of cash flows using the indirect method,noncash expenses are ________ net income.

The statement of cash flows is:

Jeffreys Company reports depreciation expense of $40,000 for Year 2.Also,equipment costing $240,000 was sold for a $10,000 loss in Year 2.The following selected information is available for Jeffreys Company from its comparative balance sheet.Compute the cash received from the sale of the equipment. At December 31 Year 2 Year 1 Equipment \ 510,000 \ 750,000 Accumulated Depreciation-Equipment 328,000 500,000

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. -Received interest from investments in trading securities.

Analysis reveals that a company had a net increase in cash of $20,000 for the current year.Net cash provided by operating activities was $18,000; net cash used in investing activities was $10,000 and net cash provided by financing activities was $12,000.If the year-end cash balance is $24,000,the beginning cash balance was:

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