Exam 12: Statement of Cash Flows

Indicate whether each of the following statements regarding the statement of cash flows (SCF) is true or false. _____ a) Purchase of a certificate of deposit would appear in the investing activities section of the SCF. _____ b) Sale of treasury stock would appear in the investing section of the SCF. _____ c) Cash proceeds from the sale of a used truck would appear in the operating section of the SCF. _____ d) Purchase of merchandise inventory would appear in the investing activities section of the SCF. _____ e) Payment of salaries would appear in the operating section of the SCF.

On January 1, 2013, the Carrington Corporation decided to switch from the direct method to the indirect method of preparing the statement of cash flows. Assuming a positive net income figure but a decrease in the cash balance, what can be said about the change in method of preparing the statement?

The following is a partial list of accounts and balances for the Ferguson Corporation. Prepare the operating activities section of the statement of cash flows for 2013 using the indirect method. Additional information: Net income for 2013 was $73,800; depreciation expense was $53,400; equipment with a book value of $40,000 was sold for $36,000 cash.

Which of the following cash transactions would not be shown under operating activities?

The following income statement was drawn from the annual report of Norton Company: The amount of cash flow from operating activities is

Which of the following transactions affects cash flows?

Which section of a statement of cash flows resembles an income statement?

The Jensen Company reported depreciation expense of $20,000 and net income of $32,000 on its 2013 income statement. During 2013 the company's accounts receivable balance decreased by $8,000. Based on this information alone, what was the amount of cash flow from operating activities?

Indicate whether each of the following statements regarding the statement of cash flows (SCF) is true or false. _____ a) Purchase of treasury stock would appear in the investing section of the SCF. _____ b) Purchase of merchandise on account would appear in the operating section of the SCF. _____ c) Payment of an account payable is an operating activity. _____ d) Purchase of office supplies for cash would appear in the operating section of the SCF. _____ e) Declarations of cash dividends would appear in the financing section of the SCF.

In preparing the statement of cash flows by the indirect method, decreases in current liabilities are added to net income.

On July 6, 2013, George Corporation received an interest check from a customer who owed money on a note receivable. No principal was received at this time. Show the effects of this transaction on George's income statement and statement of cash flows.

Fall River, Inc. uses the perpetual inventory method. During the year, Fall River purchased $30,700 of inventory on account under the terms 2/10, net 30. After receipt of the merchandise, Fall River discovered some of the merchandise was defective and returned $6,500 of merchandise. Fall River paid the total liability for the merchandise within the discount period. All merchandise was finally sold for $35,000 cash. What would be the net cash flow from operating activities resulting from the above transactions?

The following information is available for Oliver Company for 2013. Oliver uses the direct method to prepare its statement of cash flows. a) What amount of cash was paid for the purchase of merchandise? b) How will the amount computed in a) be shown on the Statement of Cash Flows?

The only difference between the direct and indirect methods of preparing the statement of cash flows is the manner in which the

For the year ended December 31, 2013, Flynn Company made cash payments of $52,000 for dividends, paid interest of $20,800, paid $30,000 cash to suppliers, and purchased equipment for $68,000 cash. The amount of cash used by investing activities for 2013 is:

The Xie Company reported a beginning balance of $3,200 and an ending balance of $4,400 in its Unearned Revenue account for 2013. During the year, $16,000 of revenue (previously unearned) was recognized. Considering only this information, how much cash was received from customers?

The amount of interest expense and total cash outflows related to the note shown on the 12/31/2014 financial statements would be:

A cash purchase of land would appear in which of the following sections of the statement of cash flows?

When the direct method is used to prepare the statement of cash flows, cash inflows from customers and cash outflows for depreciation are among the categories of cash flows likely to be reported.

What is the net cash flow from investing activities?