Exam 12: The Statement of Cash Flows

Explain where to find the information needed to determine a company's cash flow adequacy.

A mortgage incurred in exchange for an office building would be reported in the statement of cash flows in

When using the direct method,how is the collection of cash from customers shown on the statement of cash flows?

Which of the following statements is true?

Under the direct method,depreciation expense is treated as an outflow in the Investing Activities section of the statement of cash flows.

Cash flow per share is computed by dividing cash on the balance sheet by the number of shares outstanding.

If the balance of wages payable increases during the year,then the __________ for the period will be greater than the actual cash wages paid in the period.

The cash flow adequacy ratio can only be calculated if a company uses the direct method to report cash flows from operating activities.

Each of the following transactions would be classified as either an investing or a financing activity except​ when

Eastern Corp. Use the following selected data and additional information from the records of Eastern Corp.to answer the questions that follow. ​ ​ Bal ance Sheet Data Accounts receivable \ 36,000 \ 42,000 Inventories 28,000 25,000 Accounts payable 31,000 35,000 Salaries payable 2,000 1,000 Equipment 60,000 40,000 Accumulated depreciation 12,000 16,000 Bonds payable 50,000 100,000 Common stock 150,000 100,000 Retained eamings 38,000 20,000 ​ Additional information: Income Statement Data Net sales \ 420,000 Cost of goods sold 300,000 Operating expenses (excluding depreciation expense) 84,000 Net income 30,000 Gain on sale of equipment (included in net income above) 2,000 ​ (1) Equipment with a cost of $\$ 15,000$ and a book value of $\$ 3,000$ was sold for $\$ 5,000$ during 2018 . (2) Common stock was issued to retire bonds payable during 2018 . (3) The only items affecting retained eamings in 2018 were net income and dividends declared and paid. ​ -Review the data for Eastern Corp. ​ Required (A)What amount of cash was collected from customers during 2018? (B)What is the amount paid for purchases of merchandise during 2018? (C)What is the amount paid for operating expenses during 2018?

Use the information below for Focal Point Corp.for 2017 and 2018 to answer the following question: Retained earnings, December 31,2017 \ 300,000 Retained earnings, December 31,2018 345,000 Dividends payable, December 31,2017 19,000 Dividends payable, December 31,2018 29,000 Net income-2018 150,000 Assume that there were no retained earnings transactions other than those dealing with dividends and net income.How much dividends did Focal Point declare during 2018?

Cash equivalents are reported in the Operating Activities section of the statement of cash flows.

The primary purpose of the statement of cash flows is to provide information about

When using the indirect method,how is an increase in accounts receivable during the year shown on the statement of cash flows?

Which of the following is an addition to net income when the indirect method is used?

Fort Corp.began the year with a balance in its Income Taxes Payable account of $23,000.The year-end balance in the account was $28,000.The company uses the indirect method in the Operating Activities section of the statement of cash flows.Therefore,it presents the amount of income taxes paid at the bottom of the statement as a supplemental disclosure.The amount of taxes paid during the year was $25,000.What amount of income tax expense will appear on Fort's income statement?

During 2017,the accounts receivable balance of Dickerson Corp.increased.Which of the following statements is true?

Gaulle Company began the year with a balance of $6,000 in Accounts Receivable and ended the year with $9,000 in the account.Revenues for the period amounted to $38,000.Under the direct method,Gaulle will report cash collected from customers of

Under the indirect method,instead of reporting cash receipts and payments,net income is reconciled with net cash from operating activities.

Caler Corp.reported the following information for 2017 and 2018: Accounts receivable, December 31,2017 \ 67,000 Accounts receivable, December 31,2018 63,000 Sales (all on credit)-2018 745,000 How much cash was collected from customers during 2018?