Exam 12: Statement of Cash Flows

During 2016, Edna Enterprises had a capital acquisitions ratio of 8.0. During 2016, Carlos Corporation had a capital acquisitions ratio of 3.4. The amount of cash flow from operating activities was $5,968,000 for Edna and $5,054,000 for Carlos. Which of the following statements is incorrect?

Roberts Company sold equipment for $250,000, purchased a building for $6,500,000, sold short-term investments for $280,000, repaid principal on a note payable for $2,300,000 plus $230,000 of interest, and paid cash dividends of $20,000. What was the net cash flow from investing activities?

Which of the following is reported as a cash flow from investing activities?

Which of the following transactions would not create a cash flow from operating activities?

Which of the following transactions would be reported in the cash flow statement as a cash flow from financing activities?

For each of the following items, indicate with the letter X whether the transaction would appear in the operating, investing, or financing activities section of the statement of cash flows, or is not reported in any one of these three categories. Assume the indirect method is used for reporting.

Canadian Beer reported equipment sold for $222 million cash and new equipment purchased $1,515 million cash. The equipment sold had a net book value of $150 million. Cash flow from investing activities would show:

When accrued liabilities increase from the beginning to the end of the year, it means accrued expenses were greater than cash payments of such expenses, and, under the indirect method, the increase in accrued liabilities would be added to net income to convert to cash flow from operating activities.

Which of the following would be subtracted from net income when determining cash flows from operating activities under the indirect method?

The quality of income ratio measures the portion of net income that was generated by cash flow from operating activities.

If sales revenue was $1,800,000 and accounts receivable decreased $40,000 while unearned revenue increased $10,000 during the year, then cash collected from customers equals $1,850,000.

Which of the following would not be a cash flow from investing activities?

When a company borrows $150 million during the year and also repays $120 million of debt, the company can disclose the $30 million net amount as excess of borrowings

A higher quality of income ratio implies that operations tend to be financed internally without having to rely on external financing sources.

Brice Corporation reported the following information: Compute Brice's cash paid for income taxes in 2016.

Rice Company, a retailer, has provided the following information pertaining to its recent year of operation: • Net income, $100,000 • Accounts receivable increased $9,000 • Prepaid insurance decreased $3,000 • Depreciation expense was $15,000 • Gain on sale of land, $2,000 • Wages payable decreased $7,000 • Unearned revenue increased $11,000 Using the indirect method, how much was Rice's net cash provided by operating activities?

Which of the following transactions would not be reported within the investing section of the cash flow statement?

Halbur Company reported the following for its recent year of operation: No new equipment was purchased during the year. What was the selling price of the equipment?

Reliance Corporation has provided the following information for the year ended December 31, 2016: • The equipment account balance increased $200,000. • The equipment accumulated depreciation account balance increased $35,000. • Equipment costing $50,000 was sold during the year resulting in a $10,000 gain. • Depreciation expense recorded on the equipment during the year was $65,000. Which of the following statements is correct with respect to determining cash flow from operating activities?

Which of the following would not be considered a cash equivalent?