Exam 13: The Statement of Cash Flows

The following account balances are for the noncash current assets and current liabilities of Eloise's Furniture Shop for 2010 and 2011: In addition, the income statement for 2011 is as follows: Required: Prepare the operating activities section of the statement of cash flows using the indirect method.

For each of the following asset and liability balance changes from the beginning to the end of the year, indicate whether the change should be added to (+) or subtracted from (-) net income for purposes of preparing the operating activity section of the statement of cash flows using the indirect method.

Atlantic Inc. had the following noncash current asset and current liabilities balances at the end of 2010 and 2011: Net income for 2011 was $940,000 and depreciation expense was $25,000. All sales and all purchases are on account. Atlantic uses the indirect method for preparing the statement of cash flows. Net cash flows from operating activities for 2011 would be:

Lineberger Corporation had the following information available from its 2011 balance sheet and income statement: What amount would be reported as cash outflows for interest on the statement of cash flows for 2011 using the direct method?

Given the following events, which ones affect cash flows from financing activities?

Skipper's Souvenir Shop had comparative balance sheets and income statements that showed the following information for 2010 and 2011: Skipper's accounts payable balances are composed solely of amounts due to suppliers for purchases of inventory. What is the amount of cash payments for inventory that Skipper should report on its 2011 statement of cash flows assuming that the direct method is used?

McClintock Inc. had the following information available from its 2011 balance sheet and income statement: What amount would be reported as cash outflows for insurance on the statement of cash flows for 2011 using the direct method?

Which type of transactions are required by generally accepted accounting principles to be disclosed either in a separate schedule at the bottom of the statement of cash flows or in a footnote to the financial statements?

Cash received from customers is classified in which section of the statement of cash flows?

Which of the following statements is true about the indirect method of preparing the operating activities section on a statement of cash flows?

Cash received from the sale of property is classified in which section of the statement of cash flows?

When using the indirect method of preparing a statement of cash flows, which of the following items would need to be deducted from net income in order to reconcile to cash provided by operating activities?

The collection of interest revenue will be depicted on the statement of cash flows as a:

Cash received from the issuance of capital stock is classified in which section of the statement of cash flows?

For each of the following activities, indicate whether they would be classified as operating (O), investing (I), or financing (F) activities for purposes of the statement of cash flows:

Which of the following items would not be classified as either cash or a cash equivalent for purposes of the statement of cash flows?

Why can't a decision-maker use sales revenue and expense information provided on the income statement as a measure of cash inflows and outflows from operating activities?

Burrows Inc. had an outstanding loan at the beginning of 2011 totaling $50,000. During 2011, $16,800 was paid out related to this loan broken down as follows: $15,000 towards principal and $1,800 in interest. Which of the following statements is correct regarding how the $16,800 payment should be depicted on the statement of cash flows?

You are given the following transaction information for the TAL Corporation for 2011: Required: Prepare a statement of cash flows using the direct method for TAL Corporation for 2011.

Which of the following is not one of the types of activities that is summarized on the statement of cash flows?