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Exam 16: Reporting the Statement of Cash Flows

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Question 31

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

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Question 32

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A spreadsheet can help organize the information needed to prepare a statement of cash flows.

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Question 33

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The appropriate section in the statement of cash flows for reporting the purchase of equipment for cash is:

Define and explain significant noncash investing and financing activities and the method of reporting them on the statement of cash flows.

When preparing the operating activities section of the statement of cash flows using the indirect method, depreciation is subtracted from net income.

A company's transactions with its creditors to borrow money and/or to repay the principal amounts of both short- and long-term debt are reported as cash flows from:

Northington, Inc. is preparing the company's statement of cash flows for the fiscal year just ended. Using the following information, determine the amount of cash flows from investing activities: Payment of cash dividends 32,000

Analysis reveals that a company had a net increase in cash of $20,000 for the current year. Net cash provided by operating activities was $18,000; net cash used in investing activities was $10,000 and net cash provided by financing activities was $12,000. If the year-end cash balance is $24,000, the beginning cash balance was:

In preparing a company's statement of cash flows for the most recent year using the indirect method, the following information is available: $\begin{array} { l | r } \text { Net income for the year was } & \$ 52,000 \\\hline \text { Accounts payable increased by } & 18,000 \\\hline \text { Accounts receivable decreased by } & 25,000 \\\hline \text { Inventories increased by } & 5,000 \\\hline \text { Depreciation expense was } & 30,000\end{array}$ Net cash provided by operating activities was:

Common uses of the statement of cash flows include all but which of the following?

Bagrov Corporation had a net decrease in cash of $10,000 for the current year. Net cash used in investing activities was $52,000 and net cash used in financing activities was $38,000. What amount of cash was provided (used) in operating activities?

Since it is recommended by the FASB, the direct method of preparing the statement of cash flows is most frequently used.

The cash flows from operating activities section of an indirect method of cash flows begins with net income or loss.

When preparing the operating activities section of the statement of cash flows using the indirect method, decreases in current operating assets are subtracted from net income.

The accountant for Huckleberry Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available: $\begin{array}{l|r}\text { Retained earnings balance at the beginning of the year } &\$ 151,000 \\\hline \text { Cash dividends declared for the year }&46,000 \\\hline \text { Net income for the year }&92,000\end{array}$ What is the ending balance for retained earnings? A) $\$ 243,000$ B) $\$ 197,000$ . C) $\$ 105,000$ . D) $\$ 13,000$ . E) $\$ 264,000$

The direct method for the preparation of the operating activities section of the statement of cash flows:

The accountant for Crusoe Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available: $\begin{array}{l|r}\hline \text { Retained earnings balance at the beginning of the year } & \$ 126,000 \\\hline \text { Cash dividends declared for the year } & 46,000 \\\hline \text { Proceeds from the sale of equipment } & 81,000 \\\hline \text { Gain on the sale of equipment } & 7,000 \\\hline \text { Cash dividends payable at the beginning of the year } & 18,000 \\\hline \text { Cash dividends payable at the end of the year } & 20,000 \\\hline \text { Net income for the year } & 92,000\end{array}$ The amount of cash dividends paid during the year would be:

A company had net cash flows from operations of $341,000, net income of $286,000 and average total assets of $1,850,000. The cash flow on total assets ratio equals:

When analyzing the changes on a spreadsheet used to prepare a statement of cash flows, the cash flows from financing activities generally affect:

Accounting standards: