Nebraska Auto Parts Company uses the indirect method to prepare the statement of cash flows.Refer to the following income statement: Nebraska Auto Parts Company Income Statement Year Ended December 31,2018 $\begin{array}{ll} \text { Sales Revenue } & \$ 360,000 \\ \text { Interest Revenue } & 1,500 \\ \text { Gain on Sale of Plant Assets } & \underline{6,000}\\ \text { Total Revenues and Gains }&&\$367,500\\ \text { Cost of Goods Sold } & 165,000 \\ \text { Salarv Expense } & 67,500\\ \text { Depreciation Expense } & 18,000 \\ \text { Other Operating Expenses } & 34,500 \\ \text { Interest Expense } & 1,500 \\ \text { Income Tax Expense } & \underline{7,500}\\ \text { Total Expenses } && \underline{294,000} \\ \text { Net Income (Loss) } && \$ 73,500 \end{array}$ Additional information provided by the company includes the following: Current assets other than cash increase by $36,000. Current liabilities decrease by $1,500. Prepare the operating activities section of the statement of cash flows.

Cash Flows from Operating Activities: N

Designer Paints Company uses the direct method for preparing its statement of cash flow.Designer Paints reports the following information regarding 2018: From the income statement: Sales Revenues,$267,000 Cost of Goods Sold,$213,000 Operating Expenses,$33,000 From the balance sheet: \[\begin{array} { | l | r | r | } \hline & \text { Beginning Balance } & \text { Ending Balance } \\ \hline \text { Accounts Receivable } & \$ 14,500 & \$ 17,900 \\ \hline \text { Merchandise Inventory } & 24,100 & 18,400 \\ \hline \text { Accounts Payable } & 6900 & 13,500 \\ \hline \text { Accrued Liabilities } & 4800 & 1600 \\ \hline \end{array}\] What amount will be shown for payments to suppliers for Merchandise Inventory purchases? (Assume that Accounts Payable are for purchases of merchandise inventory only.)

A) $207,300 B) $213,900 C) $200,700 D) $212,100 A) $207,300 B) $213,900 C) $200,700 D) $212,100

Exam 16: The Statement of Cash Flows

Shell,Inc.uses the indirect method to prepare the statement of cash flows.Refer to the following section of the comparative balance sheet: Shell, Inc. Comparative Balance Sheet December 31,2018 and 2017 2018 2017 Increase/(Decrease) Cash \ 42,000 \ 25,000 \ 17,000 Accounts Receivable 32,000 55,000 (23,000) Merchandise Inventory 57,000 Total Assets \ 254,000 \ 203,000 \ 51,000 The change in Accounts Receivable is shown as a negative cash flow in the adjustments to net income.

(True/False)

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Question 21

Boston Recyclers Company uses the indirect method to prepare its statement of cash flows.Refer to the following information for 2019: 1.Retained Earnings,beginning balance,$139,000 2)Retained Earnings,ending balance,$120,000 3)There is a net loss of $15,000 for the year. What is the amount of dividends declared during the year?

(Multiple Choice)

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Question 22

The statement of cash flows helps users ________.

(Multiple Choice)

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Question 23

Wellington,Inc.uses the direct method to prepare its statement of cash flows.Refer to the following financial statement information for the year ended December 31,2019: $Wellington,Inc.uses the direct method to prepare its statement of cash flows.Refer to the following financial statement information for the year ended December 31,2019: \begin{array}{c} \text {Wellington, Inc,}\\ \text {Income Statement}\\ \text {December 31,2019}\\\begin{array}{|l|r|l|} \hline\text { Sales Revenue } & \$ 289,600 & \\ \hline \text { Interest Revenue } & 2700 & \\ \hline \text { Gain on Sale of Plant Assets } & 6,000 & \\ \hline \text { Total Revenues and Gains } & & \$ 298,300\\ \hline\text { Cost of Goods Sold } & 145,000 \\ \hline \text { Salaries and Wages Expense } & 49,700 \\ \hline \text { Depreciation Expense - Plant Assets } & 16,000 \\ \hline \text { Other Operating Expense } & 24,300 \\ \hline\text { Interest Expense } & 3,500 \\ \hline \text { Income Tax Expense } & 7,800 \\ \hline \text { Total Expenses } &&246,300\\ \hline\text { Net Income }&&\$52,000\\ \hline \end{array}\end{array} Use the direct method to compute the total cash receipts from operating activities.$ Wellington, Inc, Income Statement December 31,2019 Sales Revenue \ 289,600 Interest Revenue 2700 Gain on Sale of Plant Assets 6,000 Total Revenues and Gains \ 298,300 Cost of Goods Sold 145,000 Salaries and Wages Expense 49,700 Depreciation Expense - Plant Assets 16,000 Other Operating Expense 24,300 Interest Expense 3,500 Income Tax Expense 7,800 Total Expenses 246,300 Net Income \5 2,000 Use the direct method to compute the total cash receipts from operating activities.

(Multiple Choice)

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Question 24

The statement of cash flows shows where cash came from and how cash was spent.

(True/False)

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Question 25

Gilmore Company uses the direct method to prepare its statement of cash flows.Refer to the following financial statement information for the year ended December 31,2018: $Gilmore Company uses the direct method to prepare its statement of cash flows.Refer to the following financial statement information for the year ended December 31,2018: \begin{array}{c} \text {Dental, Inc,}\\ \text {Income Statement}\\ \text {December 31,2019}\\\begin{array}{|l|r|l|} \hline\text { Sales Revenue } & \$ 289,600 & \\ \hline \text { Interest Revenue } & 2600 & \\ \hline \text { Gain on Sale of Plant Assets } & 6,000 & \\ \hline \text { Total Revenues and Gains } & & \$ 298,300\\ \hline\text { Cost of Goods Sold } & 146,800 \\ \hline \text { Salaries and Wages Expense } & 47,500 \\ \hline \text { Depreciation Expense - Plant Assets } & 16,000 \\ \hline \text { Other Operating Expense } & 24,700 \\ \hline\text { Interest Expense } & 3,500 \\ \hline \text { Income Tax Expense } & 7,800 \\ \hline \text { Total Expenses } &&246,300\\ \hline\text { Net Income }&&\$52,000\\ \hline \end{array}\end{array} Use the direct method,to compute the net cash provided by operating activities.(Accrued Liabilities relate to other operating expense.)$ Dental, Inc, Income Statement December 31,2019 Sales Revenue \ 289,600 Interest Revenue 2600 Gain on Sale of Plant Assets 6,000 Total Revenues and Gains \ 298,300 Cost of Goods Sold 146,800 Salaries and Wages Expense 47,500 Depreciation Expense - Plant Assets 16,000 Other Operating Expense 24,700 Interest Expense 3,500 Income Tax Expense 7,800 Total Expenses 246,300 Net Income \5 2,000 Use the direct method,to compute the net cash provided by operating activities.(Accrued Liabilities relate to other operating expense.)

(Multiple Choice)

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Question 26

Nebraska Auto Parts Company uses the indirect method to prepare the statement of cash flows.Refer to the following income statement: Nebraska Auto Parts Company Income Statement Year Ended December 31,2018 Sales Revenue \ 360,000 Interest Revenue 1,500 Gain on Sale of Plant Assets Total Revenues and Gains \3 67,500 Cost of Goods Sold 165,000 Salarv Expense 67,500 Depreciation Expense 18,000 Other Operating Expenses 34,500 Interest Expense 1,500 Income Tax Expense Total Expenses Net Income (Loss) \ 73,500 Additional information provided by the company includes the following: Current assets other than cash increase by $36,000. Current liabilities decrease by $1,500. Prepare the operating activities section of the statement of cash flows.

(Essay)

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Question 27

Planned investments and cash dividends are deducted from ________ to arrive at free cash flow.

(Multiple Choice)

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Question 28

Which of the following sections of the statement of cash flows include activities that affect net income on the income statement?

(Multiple Choice)

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Question 29

The total change in cash for the period reconciles the statement of cash flows.

(True/False)

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Question 30

The payment of interest on a loan is considered a ________ on a statement of cash flows prepared using the direct method.

(Multiple Choice)

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Question 31

Kansas Company uses the indirect method to prepare its statement of cash flows.Refer to the following portion of the comparative balance sheet: $\begin{array}{c}\text { Kansas Company}\\\text { Comparative Balance Sheet}\\\text { December 31,2019 and 2018}\\\begin{array}{llll}&2019 & 2018 & \text { Increase/(Decrease) }\\\text { Accounts Payable } & \$ 6,000 & \$ 9,000 & \$(3,000) \\\text { Accrued Liabilities } & 3,000 & 1,500 & 1,500 \\\text { Long-term Notes Payable } & \underline{126,000} & \underline{135,000} & \underline{(9,000)} \\\text { Total liabilities } & \$ 135,000 & \$ 145,500 & \$(10,500)\end{array}\end{array}$ Additional information provided by the company includes the following: During 2019,the company repaid $60,000 of long-term notes payable. During 2019,the company borrowed $51,000 on a new long-term note payable. Use the T-account format to evaluate the transactions affecting the long-term notes payable account.

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Question 32

The contribution of equipment by a stockholder in exchange for common stock is an example of ________.

(Multiple Choice)

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Question 33

Designer Paints Company uses the direct method for preparing its statement of cash flow.Designer Paints reports the following information regarding 2018: From the income statement: Sales Revenues,$267,000 Cost of Goods Sold,$213,000 Operating Expenses,$33,000 From the balance sheet: Beginning Balance Ending Balance Accounts Receivable \ 14,500 \ 17,900 Merchandise Inventory 24,100 18,400 Accounts Payable 6900 13,500 Accrued Liabilities 4800 1600 What amount will be shown for payments to suppliers for Merchandise Inventory purchases? (Assume that Accounts Payable are for purchases of merchandise inventory only.)

(Multiple Choice)

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Question 34

The income statement and a partial balance sheet of Hart Alloy Company for the year ended December 31,2018 is presented below.Prepare the operating activities section of the statement of cash flows using the direct method.Accrued Liabilities relate to miscellaneous operating expenses. Hart Alloy Company Income Statement For the Year Ended December 31, 2018 Sales Revenues \ 1,500,000 Cost of Goods Sold 1,170,000 Gross Profit \ 330,000 Operating Expenses: Salaries Expense \ 210,000 Depreciation Expense 60,000 Miscellaneous Expenses Net Income Hart Alloy Company Partial Balance Sheet December 31,2018 and 2017 2018 2017 Cash \ 240,000 \ 195,000 Accounts Receivable (net) 150,000 150,000 Inventories 306,000 258,000 Accrued Liabilities 13,500 15,000 Accounts Payable (Merchandise Inventory) 174,000 153,000 Salaries Payable 22,500 18,000

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Question 35

In practice,most companies face complex situations.In these cases,a spreadsheet can help in preparing the statement of cash flows.

(True/False)

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Question 36

Cash borrowed on a mortgage note is a(n)________ activity on the statement of cash flows.

(Multiple Choice)

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Question 37

Colorado Company uses the indirect method to prepare the statement of cash flows.Refer to the following section of the comparative balance sheet: $\begin{array}{c}\text { Colorado Company }\\ \text { Comparative Balance Sheet}\\\text { December 31,2019 and 2018}\\\begin{array}{|l|r|r|r|}\hline&2018&2017&\text { Increase/(Decrease) }\\\hline \text { Accounts Payable } & \$ 4,000 & \$ 6,000 & \$(2,000) \\\hline \text { Accrued Liabilities } & 2,000 & 1,000 & 1,000 \\\hline \text { Long-term Notes Payable } & \underline{84,000} & \underline{90,000} & \underline{(6,000)} \\\hline \text { Total Liabilities } & \$ 90,000 & \$ 97,000 & \$(7,000) \\\hline \end{array}\end{array}$ How will the change in Accrued Liabilities be shown on the statement of cash flows?

(Multiple Choice)

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Question 38

The direct method restates the income statement in terms of cash.

(True/False)

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Question 39

Financing activities on the statement of cash flows affect the long-term liability and equity accounts.

(True/False)

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Question 40

Showing 21 - 40 of 183

The statement of cash flows helps users ________.

The statement of cash flows shows where cash came from and how cash was spent.

Planned investments and cash dividends are deducted from ________ to arrive at free cash flow.

Which of the following sections of the statement of cash flows include activities that affect net income on the income statement?

The total change in cash for the period reconciles the statement of cash flows.

The payment of interest on a loan is considered a ________ on a statement of cash flows prepared using the direct method.

The contribution of equipment by a stockholder in exchange for common stock is an example of ________.

In practice,most companies face complex situations.In these cases,a spreadsheet can help in preparing the statement of cash flows.

Cash borrowed on a mortgage note is a(n)________ activity on the statement of cash flows.

The direct method restates the income statement in terms of cash.

Financing activities on the statement of cash flows affect the long-term liability and equity accounts.

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandise Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Plant Assets,natural Resources,and Intangibles

Current Liabilities and Payroll

Partnerships

Corporations

Long-Term Liabilities

Investments

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets

Flexible Budgets and Standard Cost Systems

Cost Allocation and Responsibility Accounting

Short-Term Business Decisions

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