Exam 16: The Statement of Cash Flows

Kentucky Company uses the indirect method to prepare the statement of cash flows.Refer to the following income statement: Kentucky Company Income Statement Year Ended December 31, 2019 Sales Revenue \ 250,000 Interest Revenue 2200 Gain on Sale of Plant Assets 5100 Total Revenues and Gains \ 257,300 Cost of Goods Sold 124,000 Salary Expense 41,000 Depreciation Expense 14,000 Other Operating Expenses 23,000 Interest Expense 1900 Income Tax Expense 5200 Total Expenses 209,100 Net Income (Loss) \ 48,200 Additional information provided by the company includes the following: 1)Current assets,other than cash,increased by $20,000. 2)Current liabilities decreased by $1500. Compute the net cash provided by (used for)operating activities.

Arizona Company plans to purchase a property to build its corporate headquarters.An investor is willing to exchange land with a market value of $500,000 for common stock.This transaction would be shown in the financing activities section of the statement of cash flows.

Which of the following transactions would be shown in the non-cash investing and financing activities section of the statement of cash flows?

Issuing preferred stock to stockholders in exchange for cash is shown under the financing activities section of the statement of cash flows.

For the year ended December 31,2019,the Statement of Cash Flows for Mississippi Family Auto Supply shows the following information: Net Cash Used by Operating Activities,$(74,000); Net Cash Provided by Investing Activities,$49,000; and Net Cash Provided by Financing Activities,$45,000.Cash has increased by $168,000.

Which of the following describes the operating activities section of the statement of cash flows?

A company purchased machinery by issuing a long-term note payable.This is an example of a non-cash investing and financing activity for the statement of cash flows.

The operating activities section of the statement of cash flows includes activities that create revenue or expenses for the entity's business.

A business's cash receipts and cash payments for a specific period are reported on a(n)________.

Free cash flow is calculated by adding cash payments planned for investments in long-term assets and cash dividends to the amount of net cash provided by operating activities.

The non-cash investing and financing activities section of the statement of cash flows appears as a separate schedule of the statement of cash flows or in the notes to the financial statements.

Which of the following transactions would be shown in the non-cash investing and financing activities section of the statement of cash flows?

Which of the following is a cash outflow for a financing activity on the statement of cash flows?

Which of the following sections of the statement of cash flows includes the issuance of stock and the payment of cash dividends?

Outdoor Paints Company uses the direct method for preparing its statement of cash flow.Outdoor reports the following information regarding 2019: From the income statement: Sales Revenues,$266,000 Cost of Goods Sold,$215,000 Operating Expenses,$37,000 From the balance sheet: Beginning Balance Ending Balance Accounts Receivable \ 14,500 \ 18,000 Merchandise Inventory 23,800 17,800 Accounts Payable 6200 13,700 Accrued Liabilities 4400 1500 What amount will be shown for payments to suppliers for operating expenses? (Accounts Payable are for purchases of merchandise inventory only,and Accrued Liabilities relate to operating expenses.)

The change in cash is the key reconciling figure for the statement of cash flows and must match the change in cash reported on the comparative income statements.

Specialty Auto Parts Company uses the indirect method to prepare its statement of cash flows.Refer to the following information for 2018: Net cash provided by operating activities: $109,000 Net cash used for investing activities: $(114,500) Net cash provided by financing activities: $16,000 If the cash balance at the beginning of the year was $13,200,what is the ending cash balance?

New Mexico,Inc.uses the indirect method to prepare its statement of cash flows.Refer to the following portion of the comparative balance sheet: New Mexico, Inc. Comparative Balance Sheet December 31, 2019 and 2018 2019 2018 Increase/(Decrease) Cash \ 42,000 \ 36,000 \ 6,000 Accounts Receivable 62,000 70,000 (8,000) Merchandise Inventory 106,000 50,000 56,000 PP\&E, net Total Assets \ 450,000 \ 336,000 \ 114,000 Additional information provided by the company includes the following: Equipment costing $104,000 was purchased for cash. Equipment with a net book value of $20,000 was sold for $28,000. Depreciation Expense of $24,000 was recorded during the year. Use the T-account format and evaluate the transactions affecting Property,Plant,and Equipment,net.

Lone Star Hat Company uses the direct method for its statement of cash flow.Assume Accrued Liabilities relate to Operating Expenses.It reports the following information regarding the year ending December 31,2018: Lone Star Hat Company Income Statement For the Year Ended December 31, 2018 Sales Revenue \ 312,000 Cost of Goods Sold 247,000 Operating expenses \ 32,500 Net Income \ 32,500 Lone Star Hat Company Partial Balance Sheet December 31,2018 and 2017 2018 2017 Accounts Receivable (net) \ 19,500 \ 15,600 Merchandise Inventory 23,400 28,600 Accrued Liabilities 1,560 3,900 Accounts Payable (Merchandise Inventory) 15,600 9,100 Assume that there were no sales of long-term assets,no interest revenue,and no expenses other than the expenses shown above.Also,assume that Accounts Payable is for purchases of merchandise inventory only.Prepare the operating activities section of the statement of cash flows.

To complete the statement of cash flows,the net change in cash and its effects on the beginning cash balance must be shown.