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Exam 12: Reporting and Analyzing Cash Flows

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Question 61

Multiple Choice

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The appropriate section in the statement of cash flows for reporting the cash payment of wages 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 62

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A purchase of land in exchange for a long-term note payable is reported in the investing section of the statement of cash flows.

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Question 63

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A corporation prepares its statement of cash flows using the indirect method to report operating activities.Net income for the 2014 fiscal year was $634,000.Depreciation and amortization expense of $60,000 and $30,000 respectively were included with operating expenses in the income statement.The following information describes the changes in current assets and liabilities other than cash: Determine the net cash flow provided (used) by operating activities.

The direct method for preparing and reporting the statement of cash flows reports net income and then adjusts the necessary items to calculate net cash provided or used by operating activities.

Use the following income statement and information about selected current assets and current liabilities to calculate the net cash provided or used by operating activities using the direct method. Selected beginning and ending balances of current asset and current liability accounts,all of which relate to operating activities,are as follows:

When preparing the operating section of the statement of cash flows using the indirect method,an increase in income taxes payable is added back to net income.

Selected information from Jet Company's 2013 financial statements is shown below (in millions) : -What is the amount of cash paid for salaries by Jet during 2013?

Business activities that either generate or use cash are classified as operating,investing,or financing activities on the statement of cash flows.

A company had total assets of $745,000,total cash flows of $230,000,and cash flows from operations of $50,000.The cash flow on total assets ratio is equal to:

A company reported assets of $13,362 million at January 1 and $13,369 million as of December 31 of the current year.The company's net cash flows from operations was $2,204 million.Calculate the cash flow on total assets ratio.

A noncash investing transaction should be disclosed as either a footnote or small schedule attached to the statement of cash flows.

The cash flow on total assets ratio is calculated by:

Accounting standards require that the statement of cash flows be included in a complete set of financial statements.

The FASB requires a reconciliation of net income to net cash provided or used by operating activities when the direct method is used.

The following information is available for the Ehrens Corporation: Additional information: (1) There was no gain or loss on the sales of the long-term investments,nor on the bonds retired. (2) Old equipment with an original cost of $37,550 was sold for $2,100 cash. (3) New equipment was purchased for $67,550 cash. (4) Cash dividends of $33,600 were paid. (5) Additional shares of stock were issued for cash. Prepare a statement of cash flows for the 2013 calendar year using the indirect method.

Use the following information to calculate cash received from dividends:

The use of a spreadsheet for analysis is especially useful when preparing the statement of cash flows using the _____________ method.

Given the following information,determine the amount of cash flows from investing and financing activities.

The cash flow on total assets ratio is computed by dividing _____________ by ____________.

Explain how the operating activities section of the statement of cash flows is prepared when using the indirect method.