Exam 13: The Statement of Cash Flows

When preparing a statement of cash flows using the indirect method,a gain on sale of land is deducted from net income to arrive at net cash flows from operating activities.

If the indirect method is used to prepare a statement of cash flows,which of the following would be added to net income to arrive at net cash flows from operating activities?

Marla Co.sells equipment with a carrying value of $90,000 for $70,000.Where,and for what amounts,would this transaction appear on a statement of cash flows using the indirect method?

Noncash investing and financing transactions

Cash flows to assets is computed as

Interest received on investments would be included in the operating activities category on the statement of cash flows.

How are transfers between cash and cash equivalents treated on a statement of cash flows?

For 20x5,Sahara Company had average total assets of $520,000,sales of $450,000,net income of $50,000,net cash flows from operating activities of $75,000,dividend payments of $25,000,purchases of plant assets of $60,000,and sales of plant assets of $55,000.Using this information,compute (a)cash flow yield, (b)cash flows to sales, (c)cash flows to assets,and (d)free cash flow.Round amounts to one decimal place.

The primary purpose of the statement of cash flows is to provide information

Which of the following statements is correct regarding the statement of cash flows?

During 20x5,Oates Company had sales of $500,000,net income of $50,000,average total assets of $700,000,dividend payments of $35,000,net cash flows from operating activities of $90,000,purchases of plant assets of $75,000,and sales of plant assets of $90,000.Free cash flow equals

When preparing a statement of cash flows using the indirect method,amortization expense is added to net income in the cash flows from operating activities section of the statement of cash flows.

Northbrook Corporation is preparing a statement of cash flows.The following transactions occurred during the year: 1)Sold machinery for $9,000 cash. 2)Purchased a building for $80,000 cash. 3)Issued $70,000 worth of stock to acquire an airplane. 4)Converted long-term bonds by issuing $100,000 worth of stock. 5)Declared and paid a $10,000 cash dividend. -Transaction 4 would be found on the statement of cash flows in the

If the indirect method is used,which of the following would be subtracted from net income to arrive at net cash flows from operating activities?

Northbrook Corporation is preparing a statement of cash flows.The following transactions occurred during the year: 1)Sold machinery for $9,000 cash. 2)Purchased a building for $80,000 cash. 3)Issued $70,000 worth of stock to acquire an airplane. 4)Converted long-term bonds by issuing $100,000 worth of stock. 5)Declared and paid a $10,000 cash dividend. -Transaction 3 would be found on the statement of cash flows in the

Lincoln Company engaged in this transaction: Received dividends on marketable securities held as a long-term investment.Indicate which section,if any,the above transaction would appear in,or relate to,on a statement of cash flows.

In preparing a statement of cash flows using the indirect method,a decrease in an unearned revenue account should

Under the indirect method,gains or losses from the sale of equipment used in operations would appear as adjustments in the cash flows from operating activities section of the statement of cash flows.

Lincoln Company engaged in this transaction: Acquired a long-term investment by issuance of long-term debt. Indicate which section,if any,the above transaction would appear in,or relate to,on a statement of cash flows.

Lincoln Company engaged in this transaction: Declared and issued the required dividend on preferred stock.Indicate which section,if any,the above transaction would appear in,or relate to,on a statement of cash flows.