For each of the following items,relating to the adjustments made to reconcile net income to net cash provided by operating activities section,state whether the adjustment is an increase or decrease to net income. \[\begin{array} { | l | l | } \hline \text { Item } & \begin{array} { l } \text { Adjustment to Net Income on } \\ \text { Statement of Cash Flows } \end{array} \\ \hline \text { Losses on Disposal of Long-term Assets } & \\ \hline \text { Decreases in Current Liabilities } & \\ \hline \text { Amortization Expense } & \\ \hline \text { Increases in Current Assets other than Cash } & \\ \hline \end{array}\]

\[\begin{array} { | l | l | } \hline \t

New Orleans Chemicals Company follows the indirect method to prepare its statement of cash flows.Refer to the following portion of the comparative balance sheet: $\begin{array}{c} \text {New Orleans Chemicals Company }\\ \text {Comparative Balance Sheet }\\ \text {December 31,2018 and 2017}\\ \begin{array}{|l|r|r|r|} \hline&2018 & 2017 & \text { Increase/(Decrease) }\\ \hline \text { Common Stock } & \$ 30,000 & \$ 2200 & \$ 27,800 \\ \hline \text { Retained Earnings } & 155,000 & 90,000 & 65,000 \\ \hline \text { Treasury Stock } & (8500) & (5500) & (3000) \\ \hline \text { Total Equity } & \$ 176,500 & \$ 86,700 & \$ 89,800 \\ \hline \end{array}\end{array}$ Net Income for 2018 was $92,000. Based on the above information,determine the amount of dividends declared during 2018.

A) $3000 B) $92,000 C) $65,000 D) $27,000 A) $3000 B) $92,000 C) $65,000 D) $27,000

Artist Paints Company uses the direct method for preparing its statement of cash flow.Artist reports the following information regarding 2019: From the income statement: Sales Revenues,$267,000 Cost of Goods Sold,$210,000 Operating Expenses,$37,000 From the balance sheet: \[\begin{array} { | l | r | r | } \hline & \text { Beginning Balance } & \text { Ending Balance } \\ \hline \text { Accounts Receivable } & \$ 14,500 & \$ 18,300 \\ \hline \text { Merchandise Inventory } & 23,500 & 17,800 \\ \hline \text { Accounts Payable } & 6100 & 13,800 \\ \hline \text { Accrued Liabilities } & 4700 & 1800 \\ \hline \end{array}\] What amount will be shown for collections from customers?

A) $263,200 B) $270,800 C) $267,000 D) $32,800 A) $263,200 B) $270,800 C) $267,000 D) $32,800

Exam 16: The Statement of Cash Flows

Redbird Company uses the indirect method to prepare its statement of cash flows.Using the following information,complete the worksheet for the year ended December 31,2018. - Net Income for the year ended December 31,2018 was $49,000 - Depreciation expense for 2018 was $12,000 - During 2018,plant assets with a book value of $10,000 (cost $10,000 and accumulated depreciation $0)were sold for $14,000 - Plant assets were acquired for $52,000 cash - Issued common stock for $28,000 - Issued long-term notes payable for $34,000 - Repaid long-term notes payable for $40,000 - Purchased treasury stock for 3,000 - Paid dividends of $10,000 Redbird Company

(Essay)

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Question 101

The financing section of the statement of cash flows involves transactions relating to the equity accounts and the long-term liability accounts.

(True/False)

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Question 102

The issuance of common stock for cash is shown as a ________.

(Multiple Choice)

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Question 103

The financing activities section of the statement of cash flows includes paying dividends and making payments on long-term liabilities.

(True/False)

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Question 104

Which of the following statements is TRUE of the direct and indirect methods of preparing the statement of cash flows?

(Multiple Choice)

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Question 105

On the statement of cash flows,the investing activities section is shown after the financing activities section.

(True/False)

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Question 106

For each of the following items,relating to the adjustments made to reconcile net income to net cash provided by operating activities section,state whether the adjustment is an increase or decrease to net income. Item Adjustment to Net Income on Statement of Cash Flows Losses on Disposal of Long-term Assets Decreases in Current Liabilities Amortization Expense Increases in Current Assets other than Cash

(Essay)

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Question 107

The net cash provided by operating activities is calculated in the same way,whether the company uses the direct or the indirect method of preparing the statement of cash flows.

(True/False)

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Question 108

Arkansas Company is preparing its statement of cash flows using the indirect method.Refer to the following information: 1.Repayments on Long-term Notes Payable $58,000 2)New borrowing on Long-term Notes Payable $19,000 Which of the following statements is correct?

(Multiple Choice)

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Question 109

The balance sheet shows why cash increased or decreased.

(True/False)

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Question 110

New Orleans Chemicals Company follows the indirect method to prepare its statement of cash flows.Refer to the following portion of the comparative balance sheet: New Orleans Chemicals Company Comparative Balance Sheet December 31,2018 and 2017 2018 2017 Increase/(Decrease) Common Stock \ 30,000 \ 2200 \ 27,800 Retained Earnings 155,000 90,000 65,000 Treasury Stock (8500) (5500) (3000) Total Equity \ 176,500 \ 86,700 \ 89,800 Net Income for 2018 was $92,000. Based on the above information,determine the amount of dividends declared during 2018.

(Multiple Choice)

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Question 111

Boulevard,Inc.uses the direct method to prepare its statement of cash flows.Use the following information reported for 2019: Sales Revenue,$43,000 Interest Revenue,$600 Accounts Receivable,beginning balance,$13,400 Accounts Receivable,ending balance,$26,000 There were no amounts reported for Interest Receivable. Compute the total cash receipts.

(Multiple Choice)

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Question 112

The statement of cash flows is dated the same as the balance sheet.

(True/False)

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Question 113

When computing investing cash flows,it is helpful to evaluate the T-accounts for each long-term liability.

(True/False)

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Question 114

The financing activities section of a statement prepared using the direct method includes changes in ________.

(Multiple Choice)

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Question 115

Artist Paints Company uses the direct method for preparing its statement of cash flow.Artist reports the following information regarding 2019: From the income statement: Sales Revenues,$267,000 Cost of Goods Sold,$210,000 Operating Expenses,$37,000 From the balance sheet: Beginning Balance Ending Balance Accounts Receivable \ 14,500 \ 18,300 Merchandise Inventory 23,500 17,800 Accounts Payable 6100 13,800 Accrued Liabilities 4700 1800 What amount will be shown for collections from customers?

(Multiple Choice)

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Question 116

The cash flows from investing activities is completed by reviewing the long-term liabilities section of the balance sheet.

(True/False)

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Question 117

Which of the following is a cash inflow from an operating activity on a statement of cash flows prepared using the direct method?

(Multiple Choice)

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Question 118

Dependable Tires Company uses the indirect method to prepare the statement of cash flows.Refer to the following comparative balance sheet for Dependable Tires Company and complete the third column to show the increases or decreases. Dependable lires Company Comparative Balance Sheet December 31,2018 and 2017 2018 2017 Increase/ Decrease Cash \ 39,600 \ 19,800 Accounts Receivable 26,400 38,500 Merchandise Inventory 204,000 Total Assets \ 270,000 \ 184,800 Accounts Payable \ 4,800 \ 6,600 Accrued Liabilities 2,400 1,100 Long-term Notes Payable Total Liabilities 108,000 106,700 Common Stock 36,000 2,200 Retained Earnings 135,600 81,400 Treasury Stock (9,600 (5,500) Total Stockholders' Equity Total Liabilities and Stockholders' Equity \ 270,000 \ 184,800

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Question 119

Which of the following sections of the statement of cash flows include activities that create revenue and expenses of the business?

(Multiple Choice)

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Question 120

The financing section of the statement of cash flows involves transactions relating to the equity accounts and the long-term liability accounts.

The issuance of common stock for cash is shown as a ________.

The financing activities section of the statement of cash flows includes paying dividends and making payments on long-term liabilities.

Which of the following statements is TRUE of the direct and indirect methods of preparing the statement of cash flows?

On the statement of cash flows,the investing activities section is shown after the financing activities section.

The net cash provided by operating activities is calculated in the same way,whether the company uses the direct or the indirect method of preparing the statement of cash flows.

Arkansas Company is preparing its statement of cash flows using the indirect method.Refer to the following information: 1.Repayments on Long-term Notes Payable $58,000 2)New borrowing on Long-term Notes Payable $19,000 Which of the following statements is correct?

The balance sheet shows why cash increased or decreased.

The statement of cash flows is dated the same as the balance sheet.

When computing investing cash flows,it is helpful to evaluate the T-accounts for each long-term liability.

The financing activities section of a statement prepared using the direct method includes changes in ________.

The cash flows from investing activities is completed by reviewing the long-term liabilities section of the balance sheet.

Which of the following is a cash inflow from an operating activity on a statement of cash flows prepared using the direct method?

Which of the following sections of the statement of cash flows include activities that create revenue and expenses of the business?

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

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Process Costing

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