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Exam 16: Statement of Cash Flows

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Question 71

Multiple Choice

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The statement of cash flows is not useful for:

A) planning future investing and financing activities
B) determining a company's ability to pay its debts
C) determining a company's ability to pay dividends
D) calculating the net worth of a company

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Question 72

Multiple Choice

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The following information is available from the current period financial statements: The net cash flow from operating activities using the indirect method is

A) $230,000
B) $188,000
C) $198,000
D) $156,000

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Question 73

Multiple Choice

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Which of the following is not one of the four basic financial statements?

In determining the cash flows from operating activities for the statement of cash flows by the indirect method, the depreciation expense for the period is added to the net income for the period.

The comparative balance sheet of Barry Company, for 2011 and the preceding year ended December 31, 2010, appears below in condensed form: Additional data for the current year are as follows: Prepare a statement of cash flows using the indirect method.

The direct method of preparing the operating activities section of the statement of cash flows reports major classes of gross cash receipts and gross cash payments.

On the statement of cash flows, the cash flows from operating activities section would include

Cash receipts from interest and dividends are classified as

Sales for the year were $600,000. Accounts receivable were $100,000 and $80,000 at the beginning and end of the year. Cash received from customers to be reported on the cash flow statement using the direct method is

State the section(s) of the statement of cash flows prepared by the indirect method (operating activities, investing activities, financing activities, or not reported) and the amount that would be reported for each of the following transactions:

The net income reported on the income statement for the current year was $275,000. Depreciation recorded on fixed assets and amortization of patents for the year were $40,000 and $9,000, respectively. Balances of current asset and current liability accounts at the end and at the beginning of the year are as follows: What is the amount of cash flows from operating activities reported on the statement of cash flows prepared by the indirect method?

Cash inflows and outflows are netted in the investing or financing sections of the statement of cash flows but are separately disclosed to give the reader full information.

Cash paid for equipment would be reported in the statement of cash flows in

A building with a book value of $54,000 is sold for $63,000 cash Using the indirect method, this transaction should be shown on the statement of cash flows as follows:

On the statement of cash flows, the cash flows from operating activities section would include

Balances of the current asset and current liability accounts at the end and beginning of the year are as follows: Use the direct method to prepare the cash flows from operating activities section of a statement of cash flows.

The statement of cash flows reports a firm's major sources of cash receipts and major uses of cash payments for a period.

An analysis of the general ledger accounts indicates that equipment, with an original cost of $134,000 and accumulated depreciation of $105,000 on the date of sale, was sold for $20,000 during the year. Using this information, indicate the items to be reported on the statement of cash flows using the indirect method.

Which of the following is a noncash investing and financing activity?

Free cash flow is