Question 1

Typical cash flows from investing activities include each of the following except:

Accepted Answer

A) Payments to purchase property, plant and equipment or other productive assets (excluding inventory). 
B) Proceeds from collecting the principal amount of notes receivable arising from customer sales. 
C) Proceeds from collecting the principal amount of notes receivable arising from intercompany transactions. 
D) Payments to acquire held-to maturity securities of other entities, except cash equivalents. 
E) Proceeds from the sale of equipment.

Question 2

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

Accepted Answer

The answer of Describe the format of the statement of...

Question 3

When preparing the operating activities section of the statement of cash flows using the indirect method,a decrease in accounts receivable is subtracted from net income.

Accepted Answer

A) True 
 B)False

Question 4

A purchase of land in exchange for shares of stock is disclosed on the statement of cash flows or in a note to the statement.

Accepted Answer

A) True 
 B)False

Question 5

Use the following information about the calendar-year cash flows of MacArthur Company to prepare a statement of cash flows (direct method)and a schedule of noncash investing and financing activities.

Accepted Answer

The answer of Use the following information about the calendar-year...

Question 6

When preparing the operating activities section of the statement of cash flows using the indirect method,non-operating gains are added to net income.

Accepted Answer

A) True 
 B)False

Question 7

Use the following financial statements and additional information to (1)prepare a complete statement of cash flows for the year ended December 31,2013.The cash provided or used by operating activities should be reported using the direct method,and (2)compute the company's cash flow on total assets ratio for 2013.
   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 8

When preparing the operating activities section of the statement of cash flows using the indirect method,expenses with no cash outflows are added back to net income.

Accepted Answer

A) True 
 B)False

Question 9

A noncash investing transaction should be disclosed in either a footnote or at the bottom of the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 10

Noncash investing and financing activities may be disclosed in:

Accepted Answer

A) A note in the financial statements or a schedule attached to the statement of cash flows. 
B) The operating activities section of the statement of cash flows. 
C) The investing activities section of the statement of cash flows. 
D) The financing activities section of the statement of cash flows. 
E) The reconciliation of cash balance section.

Question 11

Trenton reports net income of $230,000 for the year ended December 31,Year 2.It also reports $87,700 depreciation expense and a $5,000 gain on the sale of equipment.Its comparative balance sheet reveals a $35,500 decrease in accounts receivable,a $15,750 increase in accounts payable,and a $12,500 decrease in wages payable.Calculate the new cash provided (used)in operating activities using the indirect method.

Accepted Answer

A) $376,450. 
B) $351,450. 
C) $356,450. 
D) $319,950. 
E) $263,750.

Question 12

A purchase of land in exchange for a long-term note payable is reported in the investing section of the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 13

Castine reports net income of $305,000 for the year ended December 31,Year 2.It also reports $93,700 depreciation expense and a $10,000 loss on the sale of equipment.Its comparative balance sheet reveals a $40,200 increase in accounts receivable,a $10,200 decrease in prepaid expenses,a $15,200 increase in accounts payable,a $12,500 decrease in wages payable,a $75,000 increase in equipment,and a $100,000 decrease in notes payable.Calculate the increase in cash for Year 2.

Accepted Answer

A) $216,400. 
B) $281,400. 
C) $381,400. 
D) $206,400. 
E) $406,400.

Question 14

Probably the most important section of the statement of cash flows in analyzing the financial performance of a company's ongoing business is the ____________ section.

Accepted Answer

The answer of Probably the most important section of the...

Question 15

Information to prepare the statement of cash flows usually comes from three sources:
 (1)_______________,(2)_______________________,and (3)____________________.

Accepted Answer

The answer of Information to prepare the statement of cash...

Question 16

When preparing a statement of cash flows on the indirect method,which of the following is correct?

Accepted Answer

A) Proceeds from the sale of equipment should be added to net income in the operating activities section. 
B) A loss on the sale of land should be added to net income in the operating activities section. 
C) The declaration of a cash dividend should be a use of cash in the financing activities section. 
D) The issuance of a stock dividend should be a use of cash in the financing activities section. 
E) The purchase of land and a building by issuing a long-term note payable should be a source of cash in the financing activities section.

Question 17

A company purchased equipment for $150,000 by paying $50,000 and signing a $100,000 note payable.The entire transaction is disclosed to users on the statement of cash flows and/or in the notes to the financial statements.

Accepted Answer

A) True 
 B)False

Question 18

A company had average total assets of $1,760,000,total cash flows of $1,320,000,cash flows from operations of $205,000,and cash flows from financing of $850,000.The cash flow on total assets ratio equals:

Accepted Answer

A) 1.33%. 
B) 8.58%. 
C) 11.65%. 
D) 15.5%. 
E) 75%.

Question 19

Sebring Company reports depreciation expense of $40,000 for Year 2.Also,equipment costing $140,000 was sold for a $10,000 loss in Year 2.The following selected information is available for Sebring Company from its comparative balance sheet.Compute the cash received from the sale of the equipment.

Accepted Answer

A) $62,000. 
B) $38,000. 
C) $28,000. 
D) $18,000. 
E) $58,000.

Question 20

The following selected account balances are taken from a merchandising company's records:
  (a)Calculate the cash payments made during 2013 for merchandise.Assume all of the company's accounts payable balances result from merchandise purchases.
(b)Calculate the cash receipts from customer sales during 2013.
(c)Calculate the cash payments for salaries during 2013.

Accepted Answer

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

Exam 16: Reporting the Statement of Cash Flows

Typical cash flows from investing activities include each of the following except:

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

When preparing the operating activities section of the statement of cash flows using the indirect method,a decrease in accounts receivable is subtracted from net income.

A purchase of land in exchange for shares of stock is disclosed on the statement of cash flows or in a note to the statement.

Use the following information about the calendar-year cash flows of MacArthur Company to prepare a statement of cash flows (direct method)and a schedule of noncash investing and financing activities.

When preparing the operating activities section of the statement of cash flows using the indirect method,non-operating gains are added to net income.

When preparing the operating activities section of the statement of cash flows using the indirect method,expenses with no cash outflows are added back to net income.

A noncash investing transaction should be disclosed in either a footnote or at the bottom of the statement of cash flows.

Noncash investing and financing activities may be disclosed in:

A purchase of land in exchange for a long-term note payable is reported in the investing section of the statement of cash flows.

Probably the most important section of the statement of cash flows in analyzing the financial performance of a company's ongoing business is the ____________ section.

Information to prepare the statement of cash flows usually comes from three sources: (1)___,(2)_,and (3)__________.

When preparing a statement of cash flows on the indirect method,which of the following is correct?

A company purchased equipment for $150,000 by paying $50,000 and signing a $100,000 note payable.The entire transaction is disclosed to users on the statement of cash flows and/or in the notes to the financial statements.

A company had average total assets of $1,760,000,total cash flows of $1,320,000,cash flows from operations of $205,000,and cash flows from financing of $850,000.The cash flow on total assets ratio equals:

Sebring Company reports depreciation expense of $40,000 for Year 2.Also,equipment costing $140,000 was sold for a $10,000 loss in Year 2.The following selected information is available for Sebring Company from its comparative balance sheet.Compute the cash received from the sale of the equipment.

Exam 16: Reporting the Statement of Cash Flows

Typical cash flows from investing activities include each of the following except:

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

When preparing the operating activities section of the statement of cash flows using the indirect method,a decrease in accounts receivable is subtracted from net income.

A purchase of land in exchange for shares of stock is disclosed on the statement of cash flows or in a note to the statement.

Use the following information about the calendar-year cash flows of MacArthur Company to prepare a statement of cash flows (direct method)and a schedule of noncash investing and financing activities.

When preparing the operating activities section of the statement of cash flows using the indirect method,non-operating gains are added to net income.

When preparing the operating activities section of the statement of cash flows using the indirect method,expenses with no cash outflows are added back to net income.

A noncash investing transaction should be disclosed in either a footnote or at the bottom of the statement of cash flows.

Noncash investing and financing activities may be disclosed in:

A purchase of land in exchange for a long-term note payable is reported in the investing section of the statement of cash flows.

Probably the most important section of the statement of cash flows in analyzing the financial performance of a company's ongoing business is the ____________ section.

Information to prepare the statement of cash flows usually comes from three sources: (1)_______________,(2)_______________________,and (3)____________________.

When preparing a statement of cash flows on the indirect method,which of the following is correct?

A company purchased equipment for $150,000 by paying $50,000 and signing a $100,000 note payable.The entire transaction is disclosed to users on the statement of cash flows and/or in the notes to the financial statements.

A company had average total assets of $1,760,000,total cash flows of $1,320,000,cash flows from operations of $205,000,and cash flows from financing of $850,000.The cash flow on total assets ratio equals:

Sebring Company reports depreciation expense of $40,000 for Year 2.Also,equipment costing $140,000 was sold for a $10,000 loss in Year 2.The following selected information is available for Sebring Company from its comparative balance sheet.Compute the cash received from the sale of the equipment.

Information to prepare the statement of cash flows usually comes from three sources: (1)___,(2)_,and (3)__________.