Exam 21: The Statement of Cash Flows

The Fancy Company's comparative balance sheets for 2014 and 2015, and additional information, are presented below. Required: Prepare Fancy Company's 2015 statement of cash flows using the indirect method.

Which statement is false?

According to GAAP, what must a company's statement of cash flows show?

Which of the following events would not result in a cash inflow?

The account balance information for Miller Company at the end of 2014 and 2015 and related 2015 activities are presented below: Additional information for 2015 activities: Additional information for 2015 activities: •Bonds payable in the amount of $125,000 were converted into 12,000 shares of common stock. •Additional common stock was issued for cash of $11 per share. •The only changes in retained earnings in 2015 were a result of net income and cash dividends. •Other than the bond conversion, the only transaction affecting bonds payable during 2015 was the issue for cash at face value of new bonds payable. •Net income for the year 2015 was $200,000. Required: Compute the net cash provided by financing activities for the Miller Company using the visual inspection method.

Which of the following statements is true regarding GAAP and reporting operating activities on the statement of cash flows?

The spreadsheet method is designed to determine changes in each income statement account and then reconstruct the implied effects of those changes on cash.

What are the five categories that a company reports its cash outflows from operating activities under the direct method?

Current GAAP permits two methods of calculating and reporting a company's net cash flow from operating activities on its statement of cash flows. Required: Identify the two methods. Which method does the FASB prefer? Which method do most companies use and why?

A company uses a spreadsheet to account for the change in each asset, liability, and shareholder's equity account.

The statement of cash flows classifies cash inflows and outflows into three different activities: operating, investing, and financing. Required: Describe the types of transactions that would be included under each of the statement of cash flow activities.

Which of the following would be added to net income in computing cash flows from operating activities?

The following information relates to the Maxwell Company for 2014: Required: Compute net cash provided by operating activities for the Maxwell Company for 2014.

Selected accounting information for the Zebra Company for 2014 follows: Required: Prepare the 2014 Net Cash Flow from Operating Activities section of Zebra's statement of cash flows, using the indirect method.

When reading the Cash Inflows from Operating Activities portion of the statement of cash flows using the direct method, you would expect to find which of the following?

The following information relates to the Stork Company: What is the net cash provided by financing activities?

The Percy's Landing Co. reported the following condensed income statement for 2014: Also during 2014, the company's current assets and current liabilities changed as follows: Required: Prepare the Net Cash Flow from Operating Activities section of the statement of cash flows for 2014, using the direct method.

When employees exercise the share options, the company records the gross proceeds received from the employees exercising options as a cash inflow in the investing section.

The following information relates to the Davensmith Company: What was the amount of cash payments for interest?

Under IFRS a company is allowed to report dividends and interest received as either an operating or a financing cash inflow.