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Exam 17: Statement of Cash Flows

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Question 71

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During the year, Income Tax Expense amounted to $30,000 and Income Taxes Payable increased by $4,000; therefore, the cash paid for income taxes was $26,000.

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Question 72

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In preparing a statement of cash flows, an increase in the Common Stock and Treasury Stock accounts during a period would be an investing activity.

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Question 73

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Cash equivalents are highly-liquid investments that have maturities of less than three months.

At January 1, 2010, Bergman Enterprises reported a balance in the Equipment account of $45,000. During the year the company purchased equipment with a cost of $60,000 and sold equipment with a book value of $30,000. The company reported a loss on the sale of equipment of $4,000. Assume the indirect method is used. Instructions Determine what amount will be reported in (a) the operating activities section and (b) the investing activities section with regard to the purchase and sale of equipment.

The payment of interest on bonds payable is classified as a cash outflow from operating activities.

The statement of cash flows will not provide insight into

The statement of cash flows is a required statement that must be prepared along with an income statement, balance sheet, and retained earnings statement.

Each of the following would be reported under operating activities except cash receipts

Jenner Company has begun a worksheet for preparing a statement of cash flows. The following additional information is provided: 1. Cash dividends of $10,000 were paid during the year. 2. Land which originally cost $60,000 was sold for $52,000. 3. Common stock was issued at par value for cash. Instructions Complete the worksheet for Jenner Company.

In Wallace Company, net income is $260,000. If accounts receivable increased $140,000 and accounts payable decreased $40,000, net cash provided by operating activities using the indirect method is:

Harbor Company reported net income of $90,000 for the year ended December 31, 2010. During the year, inventories decreased by $12,000, accounts payable decreased by $18,000, depreciation expense was $20,000 and a gain on disposal of equipment of $9,000 was recorded. Net cash provided by operating activities in 2010 using the indirect method was

The cash effects of selling goods and services appears in the ______________ activities section of a statement of cash flows.

Accounts receivable arising from sales to customers amounted to $35,000 and $40,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $150,000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows is

Carter Company reports the following: If cost of goods sold for the year is $210,000, the amount of cash paid to suppliers is

Which of the following statements concerning the statement of cash flows is true?

Free _______________ equals cash provided by operations less capital expenditures and cash dividends.

The statement of cash flows classifies cash receipts and cash payments into two categories: operating activities and nonoperating activities.

The income statement of Redman Inc. for the year ended December 31, 2010, reported the following condensed information: Redman's balance sheet contained the following comparative data at December 31: Redman has no depreciable assets. Accounts payable pertains to operating expenses. Instructions Prepare the operating activities section of the statement of cash flows using the direct method.

Under the direct method, the formula for computing cash collections from customers is sales revenues plus the increase in accounts receivable or minus the decrease in accounts receivable.

Rader Company had credit sales of $550,000. The beginning accounts receivable balance was $40,000 and the ending accounts receivable balance was $140,000. What were the cash collections from customers during the period?