Exam 5: The Statement of Cash Flows

The net income for a corporation for the current accounting period was $275,000. Changes in various accounts during the period follow: Cash \ 12,500 increase muestments in sec urities au ailable for sale 40,000 decrease Accounts receivable 19,000 increase Inventories 8,000 increase Short-term prepayments 3,000 decrease Accounts payable 11,500 increase Accrued liabilities 2,200 decrease Notes payable to banks (due in nine months) 50,000 increase The cash provided by operations for the current period is:

Cash paid to suppliers is accrual based cost of goods sold plus the increase in inventory plus the increase in accounts payable for the year.

In the preparation of a Statement of Cash Flows:

What effect does the write-off of an account receivable have on the Statement of Cash Flows?

Which of the following independent transactions would cause net income to be more than cash from operating activities?

The income statement for CBA reported a net loss of $14,000. Also, the statement reported depreciation expense of $12,000 and amortization of patents of $6,000. Assuming no additional "adjustments to reconcile net income to cash from operating activities," the cash flow from operations would be a:

Which of the following would not be shown in one of the three activity sections of the Statement of Cash Flows prepared using the indirect format?

Which method or format for preparing the Statement of Cash Flows reports the major operating cash flows on an individual line-item basis?

The main purpose of the Statement of Cash Flows is:

Under IFRS, interest received may be classified as:

Which of the following is a deduction from net income when reconciling to cash flow from operating activities?

MNO's books for the period ended December 31, 2012, contained the following data: Net income (net of \ 15,000 depreciation expense) \ 20,000 Issued common shares tor cash 3,500 Sold capital asset for cash at book values, \ 3,000 ; gain 0 Sold long-term investment (cost of \ 5,000 ) tor \ 6,000 cash; gain. (Cost method was used) 1,000 Paid a cash dividend (declared earlier) 2,000 Paid long-term debt with cash (principal only) 5,000 Purchased an investment in securities available for sale 4,500 Under IFRS, the net inflow (outflow) in cash from investing and financing activities (respectively) during 2012 was: Note: Under IFRS, dividends received may also be classified as operating cash flows.

Given the following data, answer the questions that follow. Income Statement For the Year Ended 12/31/Year 2 Additional Information: Net Sales \ 1,500,000 Cost of goods sold (800,000) Cash operating expenses (400,000) Depreciation and amortization expense (100,000) Gain on sale of equipment 60,000 Net income \ 260,000 Additional Information: 1. Increase in accounts receiable during Year 2 \ 40,000 2. Decrease in inventory during Year 2 30,000 3. Inc rease in accounts payable 44,000 4. Sale of old equipment tor cash 130,000 5. Dividends declared - \ 90,000 ; Dw idends paid 80,000 6. New building acquired by issuing common shares 84,000 7. Sold bonds for cash - proceeds of 150,000 1) What was cash from customers during year 2? 2) What was cash paid to suppliers during year 2? 3) What was net cash inflow from operating activities during year 2? 4) What was net cash inflow (outflow) from investing activities during year 2? 5) What was net cash inflow (outflow) from financing activities during year 2?

Under IFRS, dividends received may be classified as:

Under the direct method, cash from customers would be sales plus a(n):

Cash equivalents are "short-term, highly liquid investments" that are both: (a) readily convertible to known amounts of cash and (b) so near their maturity that they present insignificant risk of changes in value because of changes in interest rates.

The Statement of Cash Flows can be based on (a) cash only or (b) cash plus cash equivalents.

During 2016, ABC Inc. Accounts Receivable balance decreased by $20,000. The company also accrued bad debt expense in the amount of $5,000 on credit sales of $500,000. $2,000 of accounts receivable were written off during the period. The company's cash collections from sales during 2016 was (assuming that the accrual-basis sales converted to cash basis):

A Statement of Cash Flows is significant in that it presents comprehensive information about the operating, financing, and investing activities of a company.

The following item is found on the income statement of a corporation: Gain from sale of equipment, $5,000. The equipment sold during the year originally cost $20,000, had accumulated depreciation of $16,000 and was sold for cash. The Statement of Cash Flows should show an inflow of cash from investing activities of: