Exam 16: The Statement of Cash Flows

Valentine Corp.uses the indirect method to prepare the statement of cash flows.Refer to the following section of the comparative balance sheet: How will the change in Merchandise Inventory be shown on the statement of cash flows?

Which of the following statements is true?

Which of the following sections from the statement of cash flows includes the cash paid for the purchase of Treasury Stock?

Which of the following will be shown under the investing activities section of the statement of cash flows?

Christopher Corp.is preparing its statement of cash flows using the indirect method.It provides the following information about transactions for the year: Plant assets,net-beginning balance: $108,000 Plant assets,net-ending balance: $149,000 Equipment was purchased for $67,000. Equipment with a net asset value of $12,000 was sold for $19,000. Depreciation Expense of $19,000 was recorded during the year. What was the amount of net cash provided by (used for)investing activities?

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

Free cash flow is the amount of cash available from operating activities before paying for planned investments in long-term assets.

Colorful Cat Company uses the direct method to prepare its statement of cash flows.Refer to the following financial statement information for the year ending December 31,2017: Prepare the operating activities section of the statement of cash flows,using the direct method.

Which of the following is the typical order of the sections on a statement of cash flows?

Which of the following sections of the statement of cash flows includes purchases and sales of long-term assets?

When preparing the statement of cash flows using the indirect method,a loss on the sale of plant assets must be shown as a subtraction from the investing activities section.

Martin Ceramics Company sold equipment for cash.The income statement shows a gain on the sale of $920.The net book value of the asset was $3,610.Which of the following statements describes the cash effect of the transaction?

Rodriguez Tint,Inc.uses the indirect method to prepare the statement of cash flows.Refer to the following income statement: Additional information provided by the company includes the following: Current assets,other than cash,decreased by $5,200. Current liabilities increased by $2,400. Compute the net cash provided by (used for)operating activities.

Jackson & Murphy Enterprises expects the following for 2017: The business plans to spend $102,000 to purchase equipment. What is the expected amount of free cash flow for 2017?

Tuesday Electric Company uses the direct method to prepare its statement of cash flows.Tuesday has reported operating expenses of $63,000 on its income statement for the year 2017.If the balance in accrued liabilities has increased by $6,000 during the year,then $6,000 needs to be added to $63,000 to calculate payments to suppliers for operating expenses.

When preparing the statement of cash flows,the amount of net cash flow from operating activities differs between the direct and indirect methods.

When preparing the statement of cash flows using the indirect method,a decrease in current liabilities is added to the net income to arrive at net cash flow from operating activities.

The statement of cash flows explains why net income as reported on the income statement does not equal the change in the cash balance.

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

The cash flow from investing activities section appears exactly the same,whether the company uses the direct or the indirect method to prepare the statement of cash flows.