Exam 13: Statement of Cash Flows

Computation of cash flows An analysis of changes in selected balance sheet accounts of Taurus Corporation shows the following for the current year: Marketable securities account: Debit entries \ 1,600,000 Credit entries \ 1,000,000 Plant and equipment accounts: Debit entries to asset accounts \ 3,600,000 Credit entries to asset accounts \ 2,800,000 Debit entries to accumulated depreciation accounts (resulting from sales of plant assets) \ 1,300,000 Credit entries to accumulated depreciation accounts (representing depreciation for the current year) \ 500,000 The income statement for the current year included the following items relating to the transactions summarized above: Loss on sales of marketable securities \ 350,000 Gain on sales of plant assets \ 650,000 All payments and proceeds relating to these transactions were in cash. Using this information, compute the following cash flows for the current year:

In a statement of cash flows, payments of dividends are classified as:

Which of the following is not classified among the investing activities in a statement of cash flows?

The purchase or sale of marketable securities is reported in the statement of cash flows as a financing activity.

Classification of cash flows Indicate how each of the following events should be classified in a statement of cash flows for the current calendar year. Use the following code: O = operating activities, I = investing activities, and F = financing activities. Assume use of the direct method. If the event does not involve a cash flow that should be included in the statement of cash flows, use an X. ____ (a) Paid an account payable for inventory purchased in a prior accounting period. ____ (b) On December 28, made a large credit sale; terms, 2/10, n/30. ____ (c) Received a dividend from an investment in IBM common stock. ____ (d) Paid a dividend to stockholders. ____ (e) Paid the interest on a note payable to First Bank. ____ (f) Paid the principal amount due on the note payable to First Bank. ____ (g) Transferred cash from a checking account into a money market fund. ____ (h) Made an adjusting entry to record accrued wages payable at the end of the period. ____ (i) Recorded depreciation expense for the current year. ____ (j) Purchased plant assets for cash.

Comparison of cash flows and accrual basis Underhill Corporation's statement of cash flows for 2009 shows the following information regarding investing activities: Purchases of marketable securities \ (1,518,000) Proceeds from sale of marketable securities 811,000 Proceeds from sale of land Net cash used by investing activities Underhill Corporation's income statement for 2009 includes the following items: Loss on sale of marketable securities \ 157,000 Gain on sales of land \ 179,000 (a) All payments and proceeds relating to these transactions were in cash. Using this information, compute the following:

Compute the amount of cash received from customers during the current year.

During the current year, Atkins, Inc. sold a parcel of land for $840,000 cash. The land had been purchased by Atkins several years ago for $410,000. Atkins, Inc. uses the indirect method to prepare its statement of cash flows. In order to reconcile net income to net cash flow from operating activities, net income must be:

Total cash proceeds received by Hierarchy from sales of plant assets during the current year amounted to:

Whether one uses the direct or the indirect method of presentation of the statement of cash flows, the totals from each of the three sections (activities) will be the same regardless of the method used.

Compute the amount of cash received from customers during the current year.

Compute the cash received from customers during the current year.

Products that tie in with a company's other products are called complementary products.

If interest receivable was $6,300 at December 31, 2008, and is $10,500 at the end of 2009, interest revenue reported in Global Data's income statement for 2009 must have been:

Compute the cash payments for operating expenses.

The SEC requires public companies to use the indirect method for the statement of cash flows.

Net cash flow from operating activities for the current year is:

Haven Corporation issued $700,000 of 10-year bonds payable at par in 2005. During 2009 Haven paid $50,000 interest and an additional $233,333 to retire one-third of the bonds at par. These activities would be reported in Haven's statement of cash flows for 2009 as:

Rag Dolls' cash flow from financing activities during 2010 is:

Using the following information, complete the statement of cash flows for Nutritional Foods for the year ended December 31, 2010. Place parentheses around those figures in the statement representing cash outlays.