Question 1

If 800 shares of $40 par common stock are sold for $43,000, the $43,000 would be reported in the cash flows from financing activities section of the statement of cash flows.

Accepted Answer

A) True 
 B)False  True

Question 2

The net income reported on an income statement for the current year was $63,000.Depreciation recorded on fixed assets for the year was $24,000.Balances of the current asset and current liability accounts at the end and beginning of the year are listed below.Prepare the Cash Flows from Operating Activities section of the statement of cash flows using the indirect method.

Accepted Answer

The answer of The net income reported on an income...

Question 3

Sales for the year were $600,000.Accounts receivable were $100,000 and $80,000 at the beginning and end of the year, respectively.Cash received from customers to be reported on the statement of cash flows using the direct method is

Accepted Answer

A)  $700,000
B)  $600,000
C)  $580,000
D)  $620,000 D

Question 4

For each of the following activities that may take place during the accounting period, indicate the effect a-g on the statement of cash flows prepared using the indirect method.Choices may be selected as the answer for more than one question.
-increase in accounts receivable balance

Accepted Answer

A)  increase cash from operating activities
B)  decrease cash from operating activities
C)  increase cash from investing activities
D)  decrease cash from investing activities
E)  increase cash from financing activitiesF) decrease cash from financing activitiesG) noncash investing and financing supplement

Question 5

Kennedy, Inc.reported the following data:
  Prepare the cash flows from operating activities section of the statement of cash flows using the indirect method.

Accepted Answer

The answer of Kennedy, Inc.reported the following data:
  Prepare...

Question 6

On the basis of the following data for Garrett Co.for Years 1 and 2 ended December 31, prepare a statement of cash flows using the indirect method of reporting cash flows from operating activities.Assume that equipment costing $125,000 was purchased for cash and equipment costing $85,000 with accumulated depreciation of $65,000 was sold for $15,000; that the stock was issued for cash; and that the only entries in the retained earnings account were for net income of $56,000 and cash dividends declared of $18,000.

Accepted Answer

The answer of On the basis of the following data...

Question 7

Cash dividends of $45,000 were declared during the year.Cash dividends payable were $10,000 at the beginning of the year and $15,000 at the end of the year.The amount of cash for the payment of dividends during the year is

Accepted Answer

A)  $50,000
B)  $40,000
C)  $55,000
D)  $35,000

Question 8

Which of the following should be added to net income in calculating net cash flow from operating activities using the indirect method?

Accepted Answer

A)  an increase in inventory
B)  a decrease in accounts payable
C)  preferred dividends declared and paid
D)  a decrease in accounts receivable

Question 9

Which of the following would not be on the statement of cash flows?

Accepted Answer

A)  cash flows from investing activities
B)  cash flows from financing activities
C)  cash flows from operating activities
D)  cash flows from contingent activities

Question 10

The board of directors declared cash dividends total $168,000 during the year.The comparative balance sheet indicated dividends payable of $46,000 at the beginning of the year and $42,000 at the end of the year.What was the amount of cash payments to stockholders during the year?

Accepted Answer

The answer of The board of directors declared cash dividends...

Question 11

Accounts receivable resulting from sales to customers amounted to $40,000 and $31,000 at the beginning and end of the year, respectively.Income reported on the income statement for the year was $120,000.Exclusive of the effect of other adjustments, the net cash flows from operating activities to be reported on the statement of cash flows using the indirect method is

Accepted Answer

A)  $120,000
B)  $129,000
C)  $151,000
D)  $111,000

Question 12

In preparing the statement of cash flows, the correct order of reporting cash activities is financing, operating, and investing.

Accepted Answer

A) True 
 B)False

Question 13

Balances of the current asset and current liability accounts at the end and beginning of the year are as follows:
  Use the direct method to prepare the cash flows from operating activities section of a statement of cash flows.

Accepted Answer

The answer of Balances of the current asset and current...

Question 14

The order of presentation of activities on the statement of cash flows is

Accepted Answer

A)  operating, investing, and financing
B)  operating, financing, and investing
C)  financing, operating, and investing
D)  financing, investing, and operating

Question 15

The manner of reporting cash flows from investing and financing activities will be different under the direct method as compared to the indirect method.

Accepted Answer

A) True 
 B)False

Question 16

Accounts receivable from sales transactions were $51,000 at the beginning of the year and $64,000 at the end of the year.Net income reported on the income statement for the year was $105,000.Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows prepared by the indirect method is

Accepted Answer

A)  $105,000
B)  $118,000
C)  $92,000
D)  $169,000

Question 17

A corporation uses the indirect method for preparing the statement of cash flows.A fixed asset has been sold for $25,000 representing a gain of $4,500.The value in the operating activities section regarding this event would be

Accepted Answer

A)  $25,000
B)  $4,500
C)  $29,500
D)  $4,500.

Question 18

Zenith Corporation sells some of its used store fixtures.The acquisition cost of the fixtures is $12,500 the accumulated depreciation on these fixtures is $9,750 at the time of sale.The fixtures are sold for $5,300.The value of this transaction in the investing section of the statement of cash flows is

Accepted Answer

A)  $12,500
B)  $5,300
C)  $2,750
D)  $2,550

Question 19

There is no difference in the investing and financing sections of the statement of cash flows using the indirect and direct method.

Accepted Answer

A) True 
 B)False

Question 20

Cash paid to acquire treasury stock should be shown on the statement of cash flows under investing activities.

Accepted Answer

A) True 
 B)False

Exam 13: Statement of Cash Flows

If 800 shares of $40 par common stock are sold for $43,000, the $43,000 would be reported in the cash flows from financing activities section of the statement of cash flows.

Sales for the year were $600,000.Accounts receivable were $100,000 and $80,000 at the beginning and end of the year, respectively.Cash received from customers to be reported on the statement of cash flows using the direct method is

For each of the following activities that may take place during the accounting period, indicate the effect a-g on the statement of cash flows prepared using the indirect method.Choices may be selected as the answer for more than one question. -increase in accounts receivable balance

Kennedy, Inc.reported the following data: Prepare the cash flows from operating activities section of the statement of cash flows using the indirect method.

Cash dividends of $45,000 were declared during the year.Cash dividends payable were $10,000 at the beginning of the year and $15,000 at the end of the year.The amount of cash for the payment of dividends during the year is

Which of the following should be added to net income in calculating net cash flow from operating activities using the indirect method?

Which of the following would not be on the statement of cash flows?

The board of directors declared cash dividends total $168,000 during the year.The comparative balance sheet indicated dividends payable of $46,000 at the beginning of the year and $42,000 at the end of the year.What was the amount of cash payments to stockholders during the year?

In preparing the statement of cash flows, the correct order of reporting cash activities is financing, operating, and investing.

Balances of the current asset and current liability accounts at the end and beginning of the year are as follows: Use the direct method to prepare the cash flows from operating activities section of a statement of cash flows.

The order of presentation of activities on the statement of cash flows is

The manner of reporting cash flows from investing and financing activities will be different under the direct method as compared to the indirect method.

A corporation uses the indirect method for preparing the statement of cash flows.A fixed asset has been sold for $25,000 representing a gain of $4,500.The value in the operating activities section regarding this event would be

There is no difference in the investing and financing sections of the statement of cash flows using the indirect and direct method.

Cash paid to acquire treasury stock should be shown on the statement of cash flows under investing activities.