Question 1

The cash flow on total assets ratio is computed by dividing cash flows from operations by average total assets.

Accepted Answer

A) True 
 B)False

Question 2

Beewell's net income for the year ended December 31, Year 2 was $185,000. Information from Beewell's comparative balance sheets is given below. Compute the cash received from the sale of its common stock during Year 2.

Accepted Answer

A)  $185,000. 
B)  $106,000. 
C)  $95,000. 
D)  $50,000. 
E)  $145,000. 
A)  $185,000. 
B)  $106,000. 
C)  $95,000. 
D)  $50,000. 
E)  $145,000.

Question 3

Use the following company information to calculate its net cash provided or used by investing activities:
(a) Equipment with a book value of $125,000 and an original cost of $220,000 was sold at a gain of $22,000.
(b) Paid $49,000 cash for a new truck.
(c) Sold land costing $30,000 for $26,000 cash, realizing a $4,000 loss.
(d) Purchased treasury stock for $53,000 cash.
(e) Long-term investments in stock are sold for $41,000 cash, realizing a gain of $3,500.

Accepted Answer

The answer of Use the following company information to calculate...

Question 4

Use the following income statement and information about changes in noncash current assets and liabilities to (1) prepare only the cash flows from operating activities section of the statement of cash flows using the indirect method and (2) compute the company's cash flow on total assets ratio for the year assuming that average total assets are $525,250.   Changes in current asset and current liability accounts for the year that relate to operations follow.

Accepted Answer

The answer of Use the following income statement and information...

Question 5

Use the following financial statements and additional information to (1) prepare a statement of cash flows for the year ended December 31, 2011 using the indirect method, and (2) compute the company's cash flow on total assets ratio for 2011.     Additional Information
a. A $20,000 note payable is retired at its carrying value in exchange for cash.
b. The only changes affecting retained earnings are net income and cash dividends paid.
c. New equipment is acquired for $120,000 cash.
d. Received cash for the sale of equipment that had cost $85,000, yielding a gain of $4,700.
e. Prepaid expenses relate to Other Expenses on the income statement.
f. All purchases and sales of merchandise inventory are on credit.

Accepted Answer

The answer of Use the following financial statements and additional...

Question 6

Aster Company's 2011 income statement and changes in selected balance sheet accounts are given below. Calculate the company's net cash provided or used by operating activities using the direct method.   The company also experienced the following during 2011:

Accepted Answer

The answer of Aster Company's 2011 income statement and changes...

Question 7

Financing activities include receiving cash dividends from investments in other companies' stocks.

Accepted Answer

A) True 
 B)False

Question 8

The following selected account balances are taken from a merchandising company's records:   (a) Calculate the cash payments made during 2011 for merchandise. Assume all of the company's accounts payable balances result from merchandise purchases.
(b) Calculate the cash receipts from customer sales during 2011.
(c) Calculate the cash payments for salaries during 2011.

Accepted Answer

The answer of The following selected account balances are taken...

Question 9

Which of the following items is reported on the statement of cash flows under financing activities?

Accepted Answer

A)  Declaration of a cash dividend. 
B)  Payment of a cash dividend. 
C)  Declaration of a stock dividend. 
D)  Payment of a stock dividend. 
E)  Stock split. 
A)  Declaration of a cash dividend. 
B)  Payment of a cash dividend. 
C)  Declaration of a stock dividend. 
D)  Payment of a stock dividend. 
E)  Stock split.

Question 10

_____________ activities include the cash effects of transactions and events that determine net income.

Accepted Answer

The answer of _____________ activities include the cash effects of...

Question 11

Equipment costing $100,000 with accumulated depreciation of $40,000 is sold at a loss of $10,000. This implies that $40,000 cash was received from the sale.

Accepted Answer

A) True 
 B)False

Question 12

The statement of cash flows helps analysts evaluate the:

Accepted Answer

A)  Source of cash used for debt repayments. 
B)  Source of cash used for plant expansion. 
C)  Differences between net income and net operating cash flow. 
D)  Source of cash used to finance investing activities. 
E)  All of these. 
A)  Source of cash used for debt repayments. 
B)  Source of cash used for plant expansion. 
C)  Differences between net income and net operating cash flow. 
D)  Source of cash used to finance investing activities. 
E)  All of these.

Question 13

Explain how the cash flows from operating activities section of the statement of cash flows is prepared using the indirect method.

Accepted Answer

The indirect method for preparing the op

Question 14

The statement of cash flows reports:

Accepted Answer

A)  Cash flows from operating activities. 
B)  Cash flows from financing activities. 
C)  Cash flows from investing activities. 
D)  Significant noncash financing and investing activities. 
E)  All of these. 
A)  Cash flows from operating activities. 
B)  Cash flows from financing activities. 
C)  Cash flows from investing activities. 
D)  Significant noncash financing and investing activities. 
E)  All of these.

Question 15

The use of a spreadsheet for analysis is especially useful when preparing the statement of cash flows using the _____________ method.

Accepted Answer

The answer of The use of a spreadsheet for analysis...

Question 16

Hancock reported assets of $13,362 million at January 1 and $13,369 million as of December 31 of the current year. Hancock's net cash flows from operations were $2,204 million. Calculate the cash flow on total assets ratio for Hancock.

Accepted Answer

The answer of Hancock reported assets of $13,362 million at...

Question 17

The indirect method separately lists each major item of operating cash receipts and cash payments.

Accepted Answer

A) True 
 B)False

Question 18

A cash-based measure to help business decision makers estimate the amount and timing of cash flows is the cash flow on total assets ratio.

Accepted Answer

A) True 
 B)False

Question 19

When analyzing the changes on a spreadsheet used to prepare a statement of cash flows, the cash flows from investing activities generally affect:

Accepted Answer

A)  Net income, current assets, and current liabilities. 
B)  Noncurrent assets. 
C)  Noncurrent liability and the equity accounts. 
D)  Both noncurrent assets and noncurrent liabilities. 
E)  Equity accounts only. 
A)  Net income, current assets, and current liabilities. 
B)  Noncurrent assets. 
C)  Noncurrent liability and the equity accounts. 
D)  Both noncurrent assets and noncurrent liabilities. 
E)  Equity accounts only.

Question 20

A main purpose of the statement of cash flows is to report all the major cash ________ and cash _____________.

Accepted Answer

Receipts (

Exam 16: Reporting the Statement of Cash Flows

The cash flow on total assets ratio is computed by dividing cash flows from operations by average total assets.

Beewell's net income for the year ended December 31, Year 2 was $185,000. Information from Beewell's comparative balance sheets is given below. Compute the cash received from the sale of its common stock during Year 2.

Aster Company's 2011 income statement and changes in selected balance sheet accounts are given below. Calculate the company's net cash provided or used by operating activities using the direct method. The company also experienced the following during 2011:

Financing activities include receiving cash dividends from investments in other companies' stocks.

Which of the following items is reported on the statement of cash flows under financing activities?

_____________ activities include the cash effects of transactions and events that determine net income.

Equipment costing $100,000 with accumulated depreciation of $40,000 is sold at a loss of $10,000. This implies that $40,000 cash was received from the sale.

The statement of cash flows helps analysts evaluate the:

Explain how the cash flows from operating activities section of the statement of cash flows is prepared using the indirect method.

The statement of cash flows reports:

The use of a spreadsheet for analysis is especially useful when preparing the statement of cash flows using the _____________ method.

Hancock reported assets of $13,362 million at January 1 and $13,369 million as of December 31 of the current year. Hancock's net cash flows from operations were $2,204 million. Calculate the cash flow on total assets ratio for Hancock.

The indirect method separately lists each major item of operating cash receipts and cash payments.

A cash-based measure to help business decision makers estimate the amount and timing of cash flows is the cash flow on total assets ratio.

When analyzing the changes on a spreadsheet used to prepare a statement of cash flows, the cash flows from investing activities generally affect:

A main purpose of the statement of cash flows is to report all the major cash ________ and cash _____________.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, Natural Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Cost Accounting

Process Cost Accounting

Cost Allocation and Performance Measurement

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Capital Budgeting and Managerial Decisions

Time Value of Money

Filters

A main purpose of the statement of cash flows is to report all the major cash and cash _____.