Exam 12: The Statement of Cash Flows

Use the information below for Barton Shipping 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 How much cash did Barton Shipping pay for dividends during 2018?

Carpet World Inc.reported the following information for 2017 and 2018: 2017 2018 Accounts receivable \ 51,000 \ 57,000 Inventories 42,000 39,000 Accounts payable 43,000 48,000 Net income 60,000 Depreciation expense 8,000 If Carpet World uses the indirect method to prepare the Operating Activities section of the statement of cash flows,what amount will be reported as net cash inflow from operating activities for 2018?

Zack Co.reported a net loss of $50,000 for 2017,yet its cash balance increased during the year.Which financial statement should Zack's management refer to for an explanation of this situation?

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 Prepare the Operating Activities section of a statement of cash flows for Eastern Corp.for 2018 if the indirect method is used to determine net cash flow from operating activities.

Which of the following statements is false?

Eduardo's Texas Cantina had the following results for December 31,2017 and 2018,respectively: 2017 2018 Cash \ 42,000 \ 49,000 Noncash current assets 162,000 175,000 Cash flows from financing activities 313,000 Cash flows from operating activities 72,000 What was the amount of cash flows from investing activities for 2018?

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 was paid to acquire equipment during 2018? (B)What amount was recorded as depreciation expense during 2018? (C)What amount was declared and paid for dividends during 2018?

The repurchase of a company's own stock should be reported on the statement of cash flows as an investing activity.

A building with a cost of $163,000 and accumulated depreciation of $32,000 was sold for an $11,000 gain.When using the indirect method,the cash generated from this investing activity was $131,000.

The term cash on the statement of cash flows includes __________.

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)Prepare the Investing Activities section of a statement of cash flows for 2018 for Eastern Corp. ​ (B)Prepare the Financing Activities section of a statement of cash flows for 2018 for Eastern Corp.

When using the direct method,how is the retirement of bonds payable at their maturity date shown on the statement of cash flows?

Which balance sheet accounts are most affected by investing activities?

Springdale Co.reported net income of $200,000.Cash from operations

When using the indirect method,how would the retirement of bonds payable at their maturity date be shown on the statement of cash flows?

O'Bryan Company began the year with a balance of $18,000 in Salaries and Wages Payable and ended the year with $11,000 in the account.Salaries and Wages Expense for the period amounted to $91,000.Under the direct method,O'Bryan will report cash payments for salaries and wages of

If the balance of accounts receivable decreases during the year,then cash collections will __________ sales on account for the period.

Rent expense in Volusia Company's 2018 income statement is $420,000.If prepaid rent was $70,000 at December 31,2017,and is $95,000 at December 31,2018,the cash paid for rent during 2018 is

When using the direct method,how is the payment of a cash dividend shown on the statement of cash flows?

Fairleigh Industries invested its excess cash in the following instruments during December 2017: Certificate of deposit, due January 31,2018 \ 45,000 Certificate of deposit, due June 30, 2018 95,000 Investment in City of Cleveland bonds, due May 1,2019 15,000 Investment in Techno Data stock 66,000 Money market fund 125,000 90 -day Treasury bills 95,000 Treasury note, due December 1, 2018 200,000 Determine the amount of cash equivalents that should be combined with cash on the company's balance sheet at December 31,2017,and for purposes of preparing a statement of cash flows for the year ended December 31,2017.