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Exam 14: Statement of Cash Flows

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Question 61

Multiple Choice

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Identify the section of the statement of cash flows a-d) where each of the following items would be reported. -Dividends received on investment

A) Operating activities
B) Financing activities
C) Investing activities
D) Schedule of noncash financing and investing

E) A) and B)
F) B) and C)

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Question 62

Multiple Choice

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A company purchases equipment for $32,000 cash. This transaction should be shown on the statement of cash flows under

A) investing activities
B) financing activities
C) noncash investing and financing activities
D) operating activities

E) A) and C)
F) A) and B)

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Question 63

Multiple Choice

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Identify the section of the statement of cash flows a-d) where each of the following items would be reported. -Purchase of the stock of another company as investment

On the basis of the following data for Branch Co. for the current and preceding years ended December 31, prepare a statement of cash flows using the indirect method. 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 for net income of $56,000 and cash dividends declared and paid of $18,000.

The cost of merchandise sold during the year was $45,000. Merchandise inventories were $13,500 and $10,500 at the beginning and end of the year, respectively. Accounts payable were $7,000 and $5,000 at the beginning and end of the year, respectively. Using the direct method of reporting cash flows from operating activities, cash payments for merchandise total

The comparative balance sheet of Barry Company for Years 1 and 2 ended December 31 appears below in condensed form: a) Net income, $75,800. b) Depreciation reported on income statement, $38,000. c) Fully depreciated equipment costing $60,000 was scrapped, no salvage, and equipment was purchased for $150,000. d) Bonds payable for $75,000 were retired by payment at their face amount. e) 2,500 shares of common stock were issued at $30 for cash. f) Cash dividends declared and paid, $40,000. g) Investments of $100,000 were sold for $125,000. Prepare a statement of cash flows using the indirect method.

Cash paid for preferred stock dividends should be shown on the statement of cash flows under

Which of the following types of transactions would be reported as a cash flow from investing activity on the statement of cash flows?

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

Free cash flow is the measure of operating cash flow available for corporate purposes after providing sufficient fixed asset additions to maintain current productive capacity.

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.

In calculating cash flows from operating activities using the indirect method, a gain on the sale of equipment 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. -sale of land

The statement of cash flows reports a firm's major sources of cash receipts and major uses of cash for a period of time.

Indicate the section operating activities, investing activities, financing activities, or none) in which each of the following would be reported on the statement of cash flows prepared by the indirect method: a) gain on sale of fixed assets b) net income c) retirement of long-term debt d) sale of capital stock e) distribution of stock dividends f) payment of cash dividends g) purchase of fixed assets h) sale of fixed assets i) receipt of interest revenue j) Payment of interest expense

Cash flows from investing activities, as part of the statement of cash flows, include payments for the acquisition of fixed assets.

Identify the section of the statement of cash flows a-d) where each of the following items would be reported. -Sale of machinery held for use by the company

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

Cash dividends paid on capital stock would be reported in the statement of cash flows in

For each of the following, identify whether it would be disclosed as an operating O), financing F), or investing I) activity on the statement of cash flows under the indirect method. a. ____received dividends b. ____paid of dividends c. ____purchased of equipment d. ____net income e. ____issued company's common stock f. ____amortization expense