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Exam 12: Reporting and Analyzing Cash Flows

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Question 41

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Use the following calendar-year information to prepare David Company's statement of cash flows using the direct method.

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Question 42

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The appropriate section in the statement of cash flows for reporting the receipt of cash dividends from investments in securities is:

A) Operating activities.
B) Financing activities.
C) Investing activities.
D) Schedule of noncash investing or financing activity.
E) None of these as this is not reported on the statement of cash flows.

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Question 43

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Use the following information and the indirect method to calculate the net cash provided or used by operating activities:

A statement of cash flows should reconcile the differences between the beginning and ending balances of:

On a spreadsheet used to prepare the operating section of the statement of cash flows,depreciation expense does not require an entry in the Analysis of Changes column as it is a noncash item.

The cash flow on total assets ratio reflects the company's actual cash flows and,therefore,is affected by the accounting constraints of recognition and measurement for net income.

Walker Company reports net income of $420,000 for the year ended December 31,2013.It also reports $75,600 depreciation expense and a gain of $11,000 on the sale of machinery.Its comparative balance sheets reveal a $33,600 decrease in accounts receivable,$17,220 increase in accounts payable,$9,240 increase in prepaid expenses,and $13,020 increase in wages payable.What is the net cash flows provided (used) by operating activities using the indirect method?

A company reported operating cash flows of $57,000 and average total assets of $962,000.Calculate the company's cash flow on total assets ratio.

The statement of cash flows is divided into three sections called the _____________,_____________ and _______________ sections.

Managers only use the cash flow statement to evaluate the overall net cash increase or decrease and do not pay much attention to the details of cash flows from operating activities,cash flows from investing activities,and cash flows from financing activities.

Define and discuss the differences between operating,investing,and financing activities.

A company's cash flow on total assets ratio equals 16%.If average total assets equal $2,937,500 and total cash flows equal $600,000,what is the amount of cash flows from operations?

The indirect method reports individual operating cash outflows and cash inflows by activity.

The conversion of preferred stock to common stock is disclosed in the financing section of the statement of cash flows.

Use the following information about the calendar-year cash flows of MacArthur Company to prepare a statement of cash flows (direct method) and a schedule of noncash investing and financing activities.

When preparing the operating section of the statement of cash flows using the indirect method,nonoperating gains are added back to net income.

A company reported operating cash flows of $23,400 in 2012 and $26,220 in 2013.The average total assets for the company in 2012 was $262,000 and $285,000 in 2013.Calculate the cash flow on total assets ratio for both years.Comment on the results.

When the operating activities section of the statement of cash flows is reported using the direct method,the FASB requires:

Use the following information and the indirect method to calculate the net cash provided or used by operating activities:

Based on the following information provided about a company's operations,calculate its cost of goods purchased and its cash paid for merchandise.