Exam 12: Statement of Cash Flows

Why are financial analysts interested in the statement of cash flows?

Harrison Company, a small consulting firm, charges all of its operating expenses on Accounts Payable. On January 1, 2013, Harrison's Accounts Payable balance was $12,000 and, during the year, an additional $108,000 of operating expenses was charged on account. The ending Accounts Payable balance was $36,000. What is the amount of cash paid for expenses during 2013?

When using the indirect method to prepare the statement of cash flows, an increase in noncash current assets is

On the statement of cash flows, the sum of the three major components (operating activities, investing activities, financing activities) adds up to

The Mendez Company rents out a portion of its office space to another company. At the beginning of 2013 the balance in the Unearned Rent Revenue account was $2,400. During 2013, Mendez recognized $13,600 of rent revenue. If the ending balance of Unearned Rent Revenue is $1,400, how much cash was received from the tenant for rent during 2013?

How is depreciation expense classified on the statement of cash flows using the direct and indirect methods?

Which method of preparing a cash flow statement is used by most companies?

The 2013 income statement of Gonzales Co. reported wages expense of $320,000; the 2012 balance sheet showed a balance in wages payable of $32,000, while the 2013 balance sheet included wages payable of $44,000. What amount of cash was paid for wages in 2013?

George Co. declared and paid a $1 per share cash dividend on the 20,000 shares of its common stock.

If cash from operations was $24,000, cash from investing activities was ($44,000) and the net change in cash was $48,000, what was cash from financing activities?

Garcia Company sold equipment for $50,000 cash. The equipment has cost $80,000 and had accumulated depreciation of $44,000 at the time of the sale. Based on this information alone, select the true statement.

Give an example of a non-cash financing and investing activity.

Boston Corporation reported a $7,200 balance in accounts receivable on January 1, 2013. During the year $49,600 of sales on account were made. If the ending balance of accounts receivable amounts to $25,000, what is the amount of cash received from customers?

Gaines Company began 2013 with a $84,000 debit balance in its Accounts Receivable account. During the accounting period, Gaines earned revenue on account amounting to $136,000. At the end of the accounting period, the Accounts Receivable account had a balance of $34,000. Using the above information, determine the amount of cash collected from accounts receivable during the accounting period.

For many companies, cash flow from operating activities exceeds income from operations, due to the effect of depreciation, which decreases income from operations but does not decrease cash.

Which of the following is a correct statement of one of the rules for converting net income to the cash flow from operating activities using the indirect method?

George Co. issued 20,000 shares of common stock for $400,000 cash.

Describe where on the Statement of Cash Flow one would find a non-cash purchase of equipment.

The amount of cash revenue received from customers during 2013 was:

Wilson Corporation's balance sheet reports equipment that originally cost $64,000. The accumulated depreciation for the equipment is $24,000. Wilson sells the equipment for $36,000. What would the effect be on its income statement and statement of cash flows?