Exam 16: The Statement of Cash Flows

On a statement of cash flows prepared using the direct method,cash received from selling merchandise is considered a ________.

Allen Services purchased 20 delivery vehicles by issuing a 20-year installment note payable for $720,000.On the statement of cash flows,this transaction would be shown in the ________.

Wisconsin Farm Equipment Company sold equipment for cash.The income statement shows a loss on the sale of $7000.The net book value of the asset was $28,900.Which of the following statements describes the cash effect of the transaction?

Colonial Company uses the direct method to prepare its statement of cash flows.Refer to the following financial statement information for the year ending December 31,2019: Colonial Company Income Statement Year Ended December 31, 2019 Sales Revenue \ 291,300 Interest Revenue 1,000 Gain on Sale of Plant Assets 6,000 Total Revenues and Gains \2 98,300 Cost of Goods Sold 145,000 Salaries and Wages Expense 49,000 Depreciation Expense - Plant Assets 16,000 Other Operating Expense 25,000 Interest Expense 3,500 Income Tax Expense 7,800 Total Expenses 246,300 Net Income \ 52,000 Colonial Company Statement of Retzined Earnings Year Ended December 31, 2019 Retained Earnings, January 1, 2019 \ 78,000 Add: Net income 52,000 Less: Dividends Retained Earnings, December 31,2019 \ 115,000 Prepare the operating activities section of the statement of cash flows,using the direct method.Accrued liabilities relate to other operating expenses.

Dakota Telescopes Company uses the indirect method to prepare the statement of cash flows.Refer to the following income statement: Dakota Telescopes Company Income Statement Year Ended December 31, 2019 Sales Revenue \ 275,000 Interest Revenue Total Revenues \2 77,600 Cost of Goods Sold 135,000 Salary Expense 66,500 Depreciation Expense 32,000 Other Operating Expenses 35,900 Interest Expense 2,400 Income Tax Expense 6,500 Loss on Sale of Plant Assets Total Expenses and Losses 280,300 Net Loss (\ 2,700) Additional information provided by the company includes the following: Current assets other than cash decreased by $25,000. Current liabilities increased by $3,000. Prepare the operating activities section of the statement of cash flows.

Williamsburg Company uses the direct method to prepare its statement of cash flows.Refer to the following financial statement information for the year ending December 31,2018: Additional information provided by the company includes the following: Equipment costing $60,000 was purchased for cash. Equipment with a net asset value of $10,000 was sold for $16,000. During 2018,the company repaid $43,000 of long-term notes payable. During 2018,the company borrowed $34,000 on a new note payable. There were no stock retirements during the year. There were no sales of Treasury Stock during the year. Prepare a complete statement of cash flows using the direct method. Accrued Liabilities relate to other operating expenses.

Identify how each of the following items is shown on the statement of cash flows.Identify each as operating (O),investing (I),financing (F),or non-cash investing and financing (N). Item (),(),(),() Cash payment for salaries Purchase of equipment in exchange for notes payable Cash receipts for the sale of equipment

Trinity Coatings Company uses the indirect method to prepare its statement of cash flows.Refer to the following information for 2018: The beginning balance in the Cash account was $2900. Net cash provided by operating activities: $40,000 Net cash used for investing activities: $(25,500) Net cash provided by financing activities: $1700 The statement of cash flows will show ________.

Connecticut,Inc.uses the indirect method to prepare its statement of cash flows.Refer to the following portion of the comparative balance sheet: Connecticut, Inc. Comparative Balance Sheet December 31,2019 and 2018 2019 2018 Increase/(Decrease) Cash \ 27,000 \ 18,000 \ 9000 Accounts Receivable 34,000 35,000 (1000) Merchandise Inventory 56,000 25,000 31,000 Plant and Equipment 126,000 90,000 36,00 Accumulated Depreciation-Plant and Equipment (45,000) (43,000) Total Assets \ 198,000 \ 125,000 \ 73,000 Additional information provided by the company includes the following: 1)Equipment was purchased for $69,000 with cash. 2)Equipment with a cost of $33,000 and accumulated depreciation of $7300 was sold for $46,000. What was the amount of net cash provided by (used for)investing activities?

Which of the following statements accurately describes the statement of cash flows?

Use the following information to calculate the free cash flow of Jarvis,Inc. Net cash provided by operating activities,$25,000 Net cash provided by financing activities,$35,000 Net cash used for planned investment in long-term assets,$12,000 Net cash used for investing activities,$20,000 Cash dividends paid,$10,000.

Which of the following will be listed in the operating section of the statement of cash flows that is prepared using the indirect method?

Cash received from the issuance of notes payable is a(n)________ activity on the statement of cash flows.

Which of the following is TRUE of the statement of cash flows?

Using the direct method,interest expense paid on a note payable is included in the operating activities section of the statement of cash flows.

Regarding the direct and indirect methods of preparing the statement of cash flows,which of the following statements is TRUE?

Identify how each of the following items is shown on the statement of cash flows.Identify each as operating (O),investing (I),financing (F),or non-cash investing and financing (N). Item (),(),(),() Cash payment of dividend Cash paid for income tax expense Land received in exchange for sssuance of common stock

Buying property,plant,and equipment for cash is considered a cash outflow for the financing activities section of the statement of cash flows.

Tanglewood,Inc.uses the direct method to prepare its statement of cash flows.Refer to the following financial statement information for the year ended December 31,2018: Tanglewood, Inc. Income Statement December 31,2018 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 payments to suppliers for Merchandise Inventory and other operating expenses.(Accrued Liabilities relate to other operating expense.)

Illinois Woodworking Company is preparing its statement of cash flows using the indirect method.During the year,Illinois Woodworking sold equipment for $5990 cash.The net book value of the asset was $4970.Which of the following statements is TRUE?