Exam 21: The Statement of Cash Flows

The Red Blast Company uses the visual inspection method for completing the statement of cash flows. The following information relates to the Red Blast Company: What is the net cash provided by operating activities?

How should the sale of depreciable asset be presented on the statement of cash flows?

The content of the statement of cash flows would not include which one of the following items?

Under the direct method a company computes the cash outflows for operating activities by adjusting the various expense accounts for changes in certain liability accounts and deferred revenues, and to eliminate certain "noncash" expenses or losses.

Unlike GAAP, IFRS encourage the disclosure of all of the following except

Which of the following events would be classified as an operating activity in a statement of cash flows?

Several items to be considered in converting net income to the net cash flow from operating activities under the indirect method are listed below: Required: Fill in the blanks by using a plus sign (+) or a minus sign (-) to indicate whether each item should be added to or subtracted from net income to arrive at the net cash flow from operating activities.

A cash flow statement is one of the basic financial statements that is required under

Exhibit 21-3 The Travis Company uses the spreadsheet method for completing the statement of cash flows. The balance sheet accounts and other information related to those accounts are presented below for Travis Company: Additional information related to 2015 activities: 1.Net loss for 2015 was $40,000. 2.Cash dividends of $12,000 were declared and paid in 2015. 3.4,000 shares of common stock were issued to bondholders converting bonds payable into common stock. 4.A long-term investment was sold for $100,000 cash. 5.Equipment costing $100,000 and having accumulated depreciation of $30,000 was sold for $50,000 cash. -Refer to Exhibit 21-3. Net cash provided (used) in the operating activities section of Travis's 2015 statement of cash flows was

Which of the following should be presented in a statement of cash flows?

Marty uses the visual inspection method for preparing the statement of cash flows. Selected information for Marty Company during 2014 follows: If Marty reported net income of $320, what was the net cash provided by operating activities for 2014?

Provide three examples of noncash investing and financing activities.

Under the direct method a company deducts its operating cash outflows from its operating cash inflows to determine its net cash provided by (or used) in operating activities.

On its January 1, 2014, balance sheet, Calvin Company reported equipment of $60,000 and accumulated depreciation of $20,000. During 2014, Calvin sold equipment with an original cost of $5,000. Selected information from Calvin's 2014 statement of cash flows follows: Required: Compute the amount of equipment and accumulated depreciation that should appear on Calvin's December 31, 2014, balance sheet.

The visual inspection method does not provide supporting documentation for the statement of cash flows due to its simplistic nature.

A company sold equipment for $5,000. The equipment originally cost $16,000 and had accumulated depreciation of $12,000. Which of the following statements is correct regarding the statement of cash flows prepared using the indirect method to report operating activities?

Melissa, Inc. reported the following income statement, prepared on the accrual basis: Required: For Melissa, Inc., compute the cash flow pertaining to: a.Cash collections from customers. b.Cash paid for operating expenses. c.Cash paid for suppliers.

The following are totals from selected financial statements of Macy May Company for the years ended December 31, 2013, 2014 and 2015: Required: 1) Compute the operating cash flow ratio for the year ended 2014 and 2015. 2) Compute the operating cash flow to total liabilities ration for the year ended 2014, and 2015.

The information below was taken from the records of the Piper Company for the year ended December 31, 2014: Required: Prepare Piper's statement of cash flows for 2014, using the indirect method.

Jamison Company is preparing its statement of cash flows for the current year. During the year, the company retired two issuances of debt and properly recorded the transactions. These transactions were as follows: 1) Paid cash of $115,000 to retire bonds payable with a face value of $120,000 and a book value of $116,000. 2) Paid cash of $48,000 to retire bonds payable with a face value of $45,000 and a book value of $46,000. Required: Record, in journal entry form, the entries that Jamison would make for the bond transactions on its spreadsheet to prepare its statement of cash flows.