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Exam 14: Statement of Cash Flows

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Question 21

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

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

E) B) and C)
F) All of the above

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Question 22

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Each of the events below may have an effect on the statement of cash flows. Designate how the event should be reported within the statement of cash flows using the codes provided below. Codes may be used more than once, or not at all. Codes Events

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Question 23

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The following information is available from the current period financial statements: The net cash flow from operating activities using the indirect method is

The board of directors declared cash dividends total $152,000 during 2011. The comparative balance sheet indicated dividends payable of $42,000 at the beginning of the year and $38,000 at the end of the year. What was the amount of cash payment to stockholders during the year?

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

The statement of cash flows is one of the basic financial statements.

On the basis of the following data for Breach Co. for the year ended December 31, 2011 and the preceding year, prepare a statement of cash flows using the indirect method of reporting cash flows from operating activities.  Assume that equipment costing $25,000 was purchased for cash and no long term assets were sold during the period.  Stock was issued for cash - 3,200 shares at par.  Net income for 2010 was $76,000.  Cash dividends declared and paid were $13,000.

The statement of cash flows shows the effects on cash of a company's operating, investing, and financing activities.

On the basis of the following data for Branch Co. for the year ended December 31, 2011 and the preceding year, 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 the land was sold for $15,000. The stock was issued for cash and the only entries in the retained earnings account were net income of $56,000 and cash dividends declared and paid of $18,000.

There are two alternatives to reporting cash flows from operating activities in the statement of cash flows: (1) the direct method and (2) the indirect method.

To determine cash payments for operating expenses for the cash flow statement using the direct method, a decrease in prepaid expenses is added to operating expenses other than depreciation.

Cash paid for equipment would be reported in the statement of cash flows in

On the statement of cash flows prepared by the indirect method, a $50,000 gain on the sale of investments would be

Under the indirect method, expenses that do not affect cash are added to net income in the operating activities section of the statement of cash flows.

Net income for the year was $29,500. Accounts receivable increased $2,500, and accounts payable increased $5,400. Under the indirect method, the cash flow from operations is $32,400.

Baxter Company reported a net loss of $13,000 for the year ended December 31, 2010. During the year, accounts receivable decreased $5,000, merchandise inventory increased $8,000, accounts payable increased by $10,000, and depreciation expense of $4,000 was recorded. During 2010, operating activities

Cash receipts received from the issuance of a mortgage notes payable would be classified as

The acquisition of land in exchange for common stock is an example of noncash investing and financing activity.

To determine cash payments for merchandise for the cash flow statement using the direct method, a decrease in accounts payable is added to the cost of merchandise sold.

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.