Exam 13: Statement of Cash Flows

Balances of the current asset and current liability accounts at the end and beginning of the year are as follows: End Beginning Cash \ 67,000 \ 73,000 Accounts receivable (net) 73,000 60,000 Inventories 54,000 47,000 Accounts payable (merchandise creditors) 43,000 37,000 Sal aries payable 2,800 3,800 Sales (on account) 210,000 Cost of goods sold 70,000 Operating expenses other than depreciation 67,000 ​ Use the direct method to prepare the cash flows from operating activities section of a statement of cash flows.

The statement of cash flows shows the effects on cash of a company's operating, investing, and financing activities.

For each of the following activities that may take place during the accounting period, indicate the effect (a-g) on the statement of cash flows prepared using the indirect method. Choices may be selected as the answer for more than one question. -Payment of dividends

Cash inflows and outflows are not netted in the investing or financing sections of the statement of cash flows but are separately disclosed to give the reader full information.

The following selected account balances appeared on the financial statements of the Washington Company. Use these balances to answer the questions that follow. Accounts receivable, Jan. 1 \ 13,000 Accounts receivable, Dec. 31 9,000 Accounts payable, Jan. 1 4,000 Accounts payable, Dec. 31 7,000 Inventory, Jan. 1 10,000 Inventory, Dec. 31 15,000 Sales 56,000 Cost of goods sold 31,000 The Washington Company uses the direct method to calculate net cash flow from operating activities. Assume that all accounts payable are owed to merchandise suppliers. ​ -Cash collections from customers were

A corporation uses the indirect method for preparing the statement of cash flows. A fixed asset has been sold for $25,000 representing a gain of $4,500. The value in the operating activities section regarding this event would be

Free cash flow is cash from operations less cash used for

Which of the following is not one of the four basic financial statements?

Which of the following should be added to net income in calculating net cash flow from operating activities using the indirect method?

On the statement of cash flows, the cash flows from investing activities section would include

The comparative balance sheets of Posner Company, for Years 1 and 2 ended December 31, appear below in condensed form: ​ The income statement for the current year is as follows: ​ Additional data for the current year are as follows: ​ Prepare a statement of cash flow, using the indirect method of reporting cash flows from operating activities.

Cash dividends paid on common stock would be reported in the statement of cash flows in

A major disadvantage of the indirect method of reporting cash flows from operating activities is that the difference between the net amount of cash flows from operating activities and net income is emphasized.

On the statement of cash flows, the cash flows from operating activities section would include

If a gain of $11,000 is realized in selling (for cash) office equipment having a book value of $55,000, the total amount reported in the cash flows from investing activities section of the statement of cash flows is

Balances of the current asset and current liability accounts at the end and beginning of the year are as follows: ​ Use the direct method to prepare the cash flows from operating activities section of a statement of cash flows.

The main disadvantage of the direct method of reporting cash flows from operating activities is that the necessary data are often costly to accumulate.

The net income reported on the income statement for the current year was $250,000. Depreciation recorded on fixed assets and amortization of patents for the year were $40,000, and $9,000, respectively. Balances of current asset and current liability accounts at the end and at the beginning of the year are as follows: End Beginning Cash \ 50,000 \ 60,000 Accounts receivable 112,000 108,000 Inventories 105,000 93,000 Prepaid expenses 4,500 6,500 Accounts payable (merchandise creditors) 75,000 89,000 What is the amount of cash flows from operating activities reported on the statement of cash flows prepared by the indirect method?

Accounts receivable from sales to customers amounted to $40,000 and $32,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $110,000. Exclusive of the effect of other adjustments, the net cash flows from operating activities to be reported on the statement of cash flows using the indirect method is

The cost of goods sold during the year was $45,000. Inventories were $13,500 and $10,500 at the beginning and end of the year, respectively. Accounts payable (all owed to merchandise suppliers) were $7,000 and $5,000 at the beginning and end of the year, respectively. Using the direct method of reporting cash flows from operating activities, cash payments for merchandise total