Exam 12: Reporting Cash Flows

A company had average total assets of $1,660,000, total cash flows of $1,320,000, cash flows from operations of $205,000, and cash flows from financing of $750,000. The cash flow on total assets ratio equals:

Explain how cash flows from investing and financing activities are determined.

Describe the format of the statement of cash flows, including the reporting of significant noncash investing and financing activities.

When using the indirect method to calculate and report net cash provided or used by operating activities, which of the following is subtracted from net income?

To be classified as a cash equivalent, the only criterion an item must meet is that it must be readily convertible to a liquid asset.

The accountant for Walter Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available: The amount of cash dividends paid during the year would be:

Define the cash flow on total assets ratio and explain how it is used to evaluate cash flows and to assess company performance.

The purchase of equity securities is classified as an investing activity.

The accountant for Sysco Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available: What is the amount of cash dividends paid that should be reported in the financing section of the statement of cash flows?

In preparing a company's statement of cash flows using the indirect method, the following information is available: Net cash provided by operating activities was:

A machine with a cost of $130,000 and accumulated depreciation of $85,000 is sold for $50,000 cash. The amount that should be reported as a source of cash under cash flows from investing activities is:

The cash flow on total assets ratio is not affected by accounting recognition and measurement.

Atom Corporation paid cash dividends totaling $75,000 during its most recent fiscal year. How should this information be reported on Atom's statement of cash flows?

The direct method for the preparation of the operating activities section of the statement of cash flows:

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

Northeast Inc. is preparing the company's statement of cash flows for the fiscal year just ended. Using the following information, determine the amount of cash flows from investing activities:

The direct method separately lists operating cash receipts, such as cash received from customers.

Preparation of the statement of cash flows does not involve:

Cash paid for merchandise is an operating activity.

All of the following are true regarding the statement of cash flows except: