Exam 21: The Statement of Cash Flows

When a company purchases a security it considers a cash equivalent,the cash outflow is:

If the direct method is used to report cash flows from operating activities in the body of the statement of cash flows,a reconciliation of net income to net cash flows from operating activities also is required.

Which of the following would not be a cash inflow from financing activities?

Which of the following financial statements is prepared as of a particular point in time rather than for a period of time?

Property dividends distributed are reported in connection with a statement of cash flows as:

On December 31,2016,Wellstone Company reported net income of $70,000 and sales of $210,000.The company also reported beginning and ending accounts receivable at $20,000 and $25,000,respectively.Wellstone will report cash collected from customers in its 2016 statement of cash flows (direct method)in the amount of:

Which of the following is reported as an operating activity in the statement of cash flows?

The following are comparative balance sheets and an income statement for Wentworth Company. Cash dividends of $45,000 were paid in 2016. Required: Prepare a statement of cash flows for 2016 using the direct method.

Moon Company owns 56 million shares of stock of Center Company classified as available for sale.During 2016,the fair value of those shares increased by $34 million.What effect did this increase have on Moon's 2016 statement of cash flows?

Which of the following would not be a component of cash flows from investing activities?

Interest payments to creditors are reported in a statement of cash flows as:

The primary objective of the statement of cash flows is to provide information about a company's:

Partial balance sheets for ABC Company and additional information are provided below. Additional information for 2016: July 1: Issued 8,000 shares of common stock for cash. July 1: Purchased new equipment for cash. December 31: Paid cash dividends of $20,000. Required: Prepare the financing activities section of the statement of cash flows for 2016.

Which of the following would be reported as a cash outflow from investing activities?

Selected information from Large Corporation's accounting records and financial statements for 2016 is as follows ($ in millions): Large prepares its financial statements in accordance with IFRS.In its statement of cash flows,Large most likely reports net cash outflows from investing activities of:

Do the statement of cash flows and its related disclosure note report only transactions that cause an increase or decrease in cash? Explain.

Listed below are several transactions that typically produce either an increase or a decrease in cash.Indicate by letter whether the cash effect of each transaction is reported on a statement of cash flows as an operating (O),investing (I),or financing (F)activity. Transactions _ Sale of preferred stock ____ Sale of equipment ____ Purchase of treasury stock ____ Merchandise sales ____ Issuance of a short-term note payable ____ Purchase of inventory ____ Repayment of note payable ____ Employee salaries ____ Sale of land ____ Issuance of bonds ____ Acquisition of bonds of another corporation ____ Payment of semiannual interest on bonds payable ____ Payment of a cash dividend ____ Purchase of an office building ____ Collection of nontrade note receivable (principal amount) ____ Loan to another firm ____ Retirement of common stock ____ Payment of income taxes ____ Issuance of a long-term note payable ____ Sale of a patent

Listed below are the reporting classifications for a statement of cash flows using the direct method for reporting operating cash flows.Indicate the reporting classification that would apply to each of the five transactions described below by placing the number of the reporting classification in the space provided by each transaction.

Determine the amount of cash received from customers for each of the two independent situations below.

Determine the amount of cash paid to suppliers for each of the four independent situations below.