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Exam 16: Statement of Cash Flows

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Question 21

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For each of the following, identify whether it would be disclosed as an operating (O), financing (F), or investing (I) activity on the statement of cash flows under the indirect method.

Premises

Responses

Purchased treasury stock

operating (O)

Sold equipment at book value

financing (F)

Net income

investing (I)

Sold long-term investments

Issued common stock

Depreciation expense

Premises

Purchased treasury stock

Sold equipment at book value

Net income

Sold long-term investments

Issued common stock

Depreciation expense

Responses

operating (O)

financing (F)

investing (I)

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Correct Answer

Premises

Responses

Purchased treasury stock

Sold equipment at book value

Net income

Sold long-term investments

Issued common stock

Depreciation expense

Premises

Purchased treasury stock

Sold equipment at book value

Net income

Sold long-term investments

Issued common stock

Depreciation expense

Responses

Question 22

Multiple Choice

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Zenith Corporation sells some of its used store fixtures. The acquisition cost of the fixtures is $12,500, the accumulated depreciation on these fixtures is $9,750 at the time of sale. The fixtures are sold for $5,300. The value of this transaction in the Investing section of the statement of cash flows is:

A) $12,500
B) $5,300
C) $2,750
D) $2,550

E) B) and C)
F) A) and D)

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Question 23

Multiple Choice

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Cash dividends paid on capital stock would be reported in the statement of cash flows in

Cash flows from investing activities, as part of the statement of cash flows, include payments for the acquisition of fixed assets.

On the basis of the following data for Branch Co. for the year ended December 31, 2011 and the preceding year, prepare a statement of cash flows using the indirect method of reporting cash flows from operating activities. Assume that equipment costing $125,000 was purchased for cash and the land was sold for $15,000. The stock was issued for cash and the only entries in the retained earnings account were net income of $56,000 and cash dividends declared and paid of $18,000.

Cash flows from investing activities, as part of the statement of cash flows, include receipts from the sale of land.

Accounts receivable from sales transactions were $51,000 at the beginning of the year and $64,000 at the end of the year. Net income reported on the income statement for the year was $105,000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows prepared by the indirect method is

Cash paid to purchase long-term investments would be reported in the statement of cash flows in

Cash flows from financing activities, as part of the statement of cash flows, include payments for dividends.

The board of directors declared cash dividends totaling $252,000 during the current year. The comparative balance sheet indicates dividends payable of $48,000 at the beginning of the year and $63,000 at the end of the year. What was the amount of cash payments to stockholders during the year?

Purchasing equipment by issuing a six-month note should be shown on the statement of cash flows under the investing activities section.

Cash flow per share is

Each of the events below may have an effect on the statement of cash flows. Designate how the event should be reported within the statement of cash flows using the codes provided below. Codes may be used more than once, or not at all.

For each of the following, identify whether it would be disclosed as an operating (O), financing (F), or investing (I) activity on the statement of cash flows under the indirect method.

On the statement of cash flows prepared by the indirect method, a $50,000 gain on the sale of investments would be

Rogers Company reported net income of $35,000 for the year. During the year, accounts receivable increased by $7,000, accounts payable decreased by $3,000 and depreciation expense of $8,000 was recorded. Net cash provided by operating activities for the year is

Which one of the following below would not be classified as an operating activity?

A business issues 20-year bonds payable in exchange for preferred stock. This transaction would be reported on the statement of cash flows in

Which of the following should be deducted from net income in calculating net cash flow from operating activities using the indirect method?

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