Exam 16: The Statement of Cash Flows

Arturo Sales purchased some equipment for $12,000 by issuing a six-month note payable.This will appear in the non-cash investing and financing activities section of the statement of cash flows.

Most public companies use the indirect method to prepare their statement of cash flows because it is the method the FASB prefers.

Investors who want to know the amount of cash a company has available for new opportunities,such as expanding into a new sales region,should analyze the company's free cash flow.

Moore Sales purchased equipment for $50,000 by issuing a six-month note payable.On the statement of cash flows,this transaction would be shown in the ________.

Ross Corp.uses the indirect method to prepare the statement of cash flows.Refer to the following section of the comparative balance sheet: The change in Accrued Liabilities is shown as a negative cash flow in the adjustments to net income.

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

Companies sometimes obtain financing and do not receive cash.Although such transactions do not directly involve cash,they still must be reported in the financing section of the statement of cash flows.

To Go Company is preparing its statement of cash flows using the indirect method.During the year,they purchased equipment for $15,000 cash.Which of the following statements is true?

For the year ending December 31,2017,Rodgers Electric expects net cash provided by operations of $327,000,net cash used by investing activities of $135,000,and net cash provided by financing activities of $49,000.Rodgers plans to spend $254,000 to add a warehouse for its operations and pays $32,000 in cash dividends.What is the amount of free cash flow?

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

Gitis,Inc.uses the direct method to prepare its statement of cash flows.Use the following information reported for 2017: Sales Revenue,$40,000 Interest Revenue,$700 Accounts Receivable,beginning balance,$13,200 Accounts Receivable,ending balance,$28,000 There were no amounts reported for Interest Receivable. Compute the total cash receipts.

Allen Moving Company uses the indirect method to prepare its statement of cash flows.Refer to the following portion of the comparative balance sheet: If the net income for the year was $61,000,the company must have declared $26,000 as dividends during the year.

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

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

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.

The operating and financing activities of the statement of cash flows are presented differently between the indirect and direct methods.

Investors and management use the statement of cash flows to evaluate a firm's profitability.

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

O'Brien Coatings Company uses the indirect method to prepare its statement of cash flows.Refer to the following information for 2017: The beginning balance in the Cash account was $2,600. Net cash provided by operating activities: $39,000 Net cash used for investing activities: $(26,500) Net cash provided by financing activities: $1,400 The statement of cash flows will show ________.

Fashion Fiesta Company uses the indirect method to prepare its statement of cash flows.Refer to the following portion of the comparative balance sheet: Additional information provided by the company includes the following: During 2015,the company repaid $60,000 of long-term notes payable. During 2015,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.