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Exam 12: Reporting Cash Flows

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Question 61

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Equipment costing $200,000 with accumulated depreciation of $160,000 is sold at a loss of $10,000. This implies that $30,000 cash was received from the sale.

A) True
B) False

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Question 62

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When preparing the operating activities section of the statement of cash flows using the indirect method, decreases in current assets are subtracted from net income.

A) True
B) False

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Question 63

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Investing activities do not include the:

If a company borrows money from a bank, the interest paid on this loan should be reported on the statement of cash flows as a(n) :

A company reported that its bonds with a par value of $50,000 and a carrying value of $57,000 are retired for $60,000 cash, resulting in a loss of $3,000. The amount to be reported under cash flows from financing activities is:

When using a spreadsheet to prepare the statement of cash flows, a decrease in accounts payable is entered in the Analysis of Changes columns with a debit in the statement of cash flows section and a credit in the balance sheet section.

Sega Co. reported net cash provided by operating activities of $142.7 million and average total assets of $1,762.5 million at the end of the year. Calculate the cash flow on total assets ratio.

When preparing the operating activities section of the statement of cash flows using the indirect method, decreases in current assets are added back to net income.

For each of the following separate cases, use the information provided to calculate the missing cash inflow or cash outflow using the direct method.

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

A machine with a cost of $130,000 and accumulated depreciation of $85,000 is sold for $50,000 cash. The amount that should be reported in the operating activities section reported under the direct method is:

Citi Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available: The amount of cash paid for dividends was:

The following information is available for the Brookstone Company: Additional information: (1) There was no gain or loss on the sales of the long-term investments, nor on the bonds retired. (2) Old machinery with an original cost of $45,060 was sold for $2,520 cash. (3) New machinery was purchased for $81,060 cash. (4) Cash dividends of $40,320 were paid. (5) Additional shares of stock were issued for cash. Prepare a complete statement of cash flows for Year 2 using the indirect method.

Use the following information to calculate cash paid for wages and salaries: $\begin{array}{lr}\text { Salaries expense } & 168,000 \\\text { Salaries payable, January } 1 & 6,400 \\\text { Salaries payable, December } 31 & 10,600\end{array}$

Define and explain significant noncash investing and financing activities and the method of reporting them on the statement of cash flows.

When preparing the operating activities section of the statement of cash flows using the indirect method, decreases in current operating liabilities are added back to net income.

Rowan, Inc.'s, income statement is shown below. Based on this income statement and the other information provided, calculate the net cash provided by operations using the indirect method. Additional information:

For each of the following items, indicate whether it would be classified as either an (O) operating activity, an (I) investing activity, a (F) financial activity, or a significant (N) noncash financing and investing activity. ________ (1) Cash sales of merchandise. ________ (2) Sale of land for cash. ________ (3) Signed a note payable in exchange for cash. ________ (4) Purchased supplies for cash. ________ (5) Paid cash to settle an account payable. ________ (6) Purchased a warehouse in exchange for shares of its stock. ________ (7) Paid interest on a note payable. ________ (8) Reissued treasury stock. ________ (9) Purchased equipment for cash. ________ (10) Purchased equipment in exchange for a 6-month note payable.

The accountant for TI Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available: What is the ending balance for retained earnings?

The statement of cash flows reports all but which of the following: