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Exam 15: Statement of Cash Flows

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Question 71

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Highly liquid investments such as Treasury bills, money market funds, and commercial paper are examples of ___________________.

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Question 72

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A statement of cash flows indicates the sources and uses of a firm's cash during a period.

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Question 73

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Which of the following would not be an adjustment to net income using the indirect method?

The net income reported on the income statement for the current year was $635,000. Depreciation recorded on plant assets was $29,000. Accounts receivable and inventories increased by $1,200 and $3,600, respectively. Prepaid expenses and accounts payable decreased by $800 and $16,000 respectively. How much cash was provided by operating activities?

The ______________ computes operating cash flow by adjusting net income for items that do not affect cash flows.

When an investing or financing activity takes place without affecting cash it is referred to as _________________________.

Which one of the following affects cash during a period?

If a loss of $12,500 is incurred in selling (for cash) office equipment having a book value of $50,000, the total amount reported in the cash flows from investing activities section of the statement of cash flows is

Advance Systems Inc. reported the following information for 2013 and 2014: $\begin{array}{lrr}&2013&2014\\\text { Accounts receivable } & \$ 101,000 & \$ 93,000 \\\text { Prepaid expenses } & 5,000 & 6,000 \\\text { Accounts payable } & 71,000 & 76,000 \\\text { Salaries payable } & 5,000 & 4,000 \\\text { Net income } & & 67,000 \\\text { Loss on sale of equipment } & & 5,000 \\\text { Depreciation expense } & & 11,000\end{array}$ If Advance Systems uses the indirect method to prepare the operating activities section of the statement of cash flows, what amount will be reported as net cash flows from operating activities for 2014?

The income statement of Grimes Company is shown below: Additional information: Required: Prepare the operating activities section of the statement of cash flows for the year ended December 31, 2013, for Grimes Company, using the direct method.

Dance Unlimited Company reported net income of $80,000 for the year. During the year, accounts receivable decreased by $3,000, accounts payable increased by $4,500 and depreciation expense of $9,000 was recorded and there was a gain on the sale of long-term investments of $2,000. Using the indirect method, net cash flows from operating activities for the year are

For each of the following items, indicate by using the appropriate code letter, how the item should be reported in the statement of cash flows, using the indirect method. -Increase in merchandise inventory during a period.

If a company has both an inflow and an outflow of cash related to property, plant, and equipment,

The following transactions occurred last year at Jackson Inc. Based solely on the above information, the net cash flows from financing activities for the year on the statement of cash flows would be

For each of the following items, indicate by using the appropriate code letter, how the item should be reported in the statement of cash flows, using the indirect method. -Purchase of a building for cash.

The indirect and direct methods of preparing the statement of cash flows are identical except for the

For each of the following items, indicate by using the appropriate code letter, how the item should be reported in the statement of cash flows, using the indirect method. -Redemption of bonds for cash.

The direct method of reporting cash flows from operating activities involves reporting major classes of cash receipts and cash payments.

All firms that are registered with the ______________________ must issue a statement of cash flows.

For each of the following items, indicate by using the appropriate code letter, how the item should be reported in the statement of cash flows, using the indirect method. -Proceeds from sale of equipment at book value.