Exam 16: Reporting the Statement of Cash Flows

The accountant for Huckleberry Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available: Retained earnings balance at the beginning of the year \ 151,000 Cash dividends declared for the year 46,000 Net income for the year 92,000 What is the ending balance for retained earnings? A) $\$ 243,000$ . B) $\$ 197,000$ . C) $\$ 105,000$ . D) $\$ 13,000$ . E) $\$ 264,000$

The reporting of investing activities in the statement of cash flows is identical under either the direct or indirect methods.

The following information is available for the Aarons Corporation: Aarons Corporation Balance Sheets At December 31 202 201 Astets: Cash \ 24,640 \ 23,040 Accounts receivable 32,180 29,400 Merchandise inventory 73,125 61,710 Long-term investments 55,900 56,400 Equipment 175,500 145,500 Accumulated depreciation (33,550 (31,200 Total assets \ 327,795 \ 284,850 Liabilities: Accounts payable \ 65,000 \ 40,380 Income taxes payable 10,725 10,200 Bonds payable 48,750 66,000 Total liabilities \ 124,475 \ 116,580 Equity: Common stock 117,000 96,000 Paid-in capital in excest of par 13,000 9,000 Retained earnings 73,320 63,270 Total equity \ 203,320 \ 168,270 Total liabilities and equity \ 327,795 \ 284,850 Aarons Corporation Income Statement For Year Ended December 31, 20X2 Sales \ 240,000 Cost of goods sold \ 80,900 Depreciation expente 29,400 Other operating expenses 48,000 Interest expense 2,000 (160,300 Other gains (lostes): Lost on sale of equipment (8,400 Income before taxes 71,300 Income taxes expense 27,650 Net income \ 43,650 Additional information: (1) There was no gain or loss on the sales of the long-term investments, nor on the bonds retired. (2) Old equipment with an original cost of $37,550 was sold for $2,100 cash. (3) New equipment was purchased for $67,550 cash. (4) Cash dividends of $33,600 were paid. (5) Additional shares of stock were issued for cash. Prepare a complete statement of cash flows for calendar-year 20X2 using the indirect method.

When analyzing the changes on a spreadsheet used to prepare a statement of cash flows, the cash flows from operating activities generally affect:

________ activities generally include those transactions and events that affect long-term assets.

Use the following information about the current year's operations of a company to calculate the cash paid for merchandise. Cost \& goods sold \ldots\ldots\ldots\ldots\ldots\ldots\ldots\ldots\ldots\ldots \ 735,000 Merchandise inventory. January 1\ldots\ldots\ldots\ldots\ldots\ldots 84,700 Mer chandise inventory. December 31\ldots\ldots\ldots\ldots\ldots 82,400 Accounts payable, January 1\ldots\ldots\ldots\ldots\ldots\ldots\ldots\ldots 54,500 Accounts payable, December 31\ldots\ldots\ldots\ldots\ldots\ldots 60,200

Use the information provided to calculate the missing cash received for interest for the period. Interest receivable, beginning-year.. 800 Interest revenue 12,600 Interest receivable, year-end........... 1,200 Cash received for interest.

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

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

The direct method for computing and reporting net cash flows from operating activities involves adjusting the net income figure to obtain net cash provided or used by operating activities.

The use of a spreadsheet for analysis is especially useful when preparing the statement of cash flows using the ________ method.

Use the following information to calculate cash received from dividends: Dividends revenue \ 29,800 Dividends receivable, January 1 2,600 Dividends receivable, December 31 3,400

Bagrov Corporation had a net decrease in cash of $10,000 for the current year. Net cash used in investing activities was $52,000 and net cash used in financing activities was $38,000. What amount of cash was provided (used) in operating activities?

Bagwell's net income for the year ended December 31, Year 2 was $175,000. Information from Bagwell's comparative balance sheets is given below. Compute the cash paid for dividends during Year 2. At December 31 Year 2 Y ear 1 Common Stock, \5 par value \ 500,000 \ 450,000 Paid-in capital in excess of par 948,000 853,000 Retained eargings 688,000 582,000

Use the information provided below to calculate the cash paid for interest for the period. Interest payable, beginning-year. 4,200 Interest expense........ 26,700 Interest payable, year-end. 3,000 Cash paid for interest..

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

Use the following information to calculate cash paid for income taxes: Income tax expense $50,000 Income tax payable, January 1 9,000 Income tax payable, December 31 7,000

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: