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Exam 24: The Statement of Cash Flows

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Question 51

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The net cash provided by operating activities is affected by:

A) the issue of bonds payable for cash.
B) a purchase of land for cash.
C) a change in merchandise inventory.
D) proceeds of cash investments by stockholders.

E) B) and C)
F) None of the above

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Question 52

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Purchases and sales of land, buildings, and equipment for cash are shown as------------- on the statement of cash flows.

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Question 53

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The payment of cash dividends to stockholders would be classified as an outflow of cash for a financing activity.

The Other Income and Other Expense sections of an Income Statement are shown below. In preparing the Cash Flows from Operating Activities section of the statement of Cash Flows using the indirect method, indicate how each item would be handled. (Assume all line items involved cash.) Other Income

The Natural Company's cash balance at December 31, 2019, was $150,000. The following information was reported on the company's statement of cash flows for 2020: - The Natural Company's Statement of Cash Flows would report Cash Flows from Financing Activities totaling:

The resale of treasury stock for cash is classified as a cash inflow from financing activities.

On the statement of cash flows, cash and----------consist of currency, bank accounts, and short-term, highly liquid investments.

Windwhirl Company reported net income of $150,000 and a $5,000 gain on the sale of equipment. The cash received from the sale of equipment was $27,000. Windwhirl issued additional shares of stock for $237,000, paid off a $196,000 bond issue recorded at par and paid $51,000 in dividends during the year. Calculate the net cash provided or (used) by financing activities.

By analyzing past cash flows, financial statement users can identify the primary sources and uses of cash.

The method most often used by companies to prepare the statement of cash flows is the:

The current assets and liabilities of the Lionel Corporation on December 31, 2019 and 2018, are listed below. Lionel's net income for 2019 was $75,000. Included in its expenses was depreciation of $17,000. Prepare a schedule of cash flows from operating activities for 2019.

On the statement of cash flows, the------------ is reconciled with the net cash provided by operating activities.

Transactions that provide cash to the business to fund its activities are:

For each of the following operating activities, select whether it is a source of cash, a use of cash, neither under the indirect method. -decrease in Accounts Receivable

A list of sources and uses of cash are given below. Indicate on the line provided whether each is an (O) operating, (I) investing, (F) financing, or a significant (N) noncash financing and investing activity. -pay interest expense

Use the following information . The Kerfuffle Company Income Statement For the Year Ended June 30, 2019 General and Administrative Expenses Liabilities and Stockholders' Equity Additional information: Plant assets that originally cost $67,200 were sold for $56,400, resulting in a gain of $8,200. Dividends of $35,815 were declared and paid in 2019. There were no dividends declared in 2018. -Using the information provided, prepare the cash flows from financing activities for The Kerfuffle Company.

The cash flows from investing activities and cash flows from financing activities are the same in both the direct and indirect methods.

A decrease in accounts payable from $86,000 to $72,000 will be reported on the statement of cash flows as a:

Which of the following would be reported as an investing activity on the statement of cash flows:

Cinders Inc, reported net income of $75,000 and a loss on the sale of plant assets of $17,000. The cash received from the sale of the plant assets was $52,000. Cinders also issued additional shares of stock for $25,000 and paid dividends of $6,200. Calculate the net cash provided or used by investing activities.