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Exam 16: Statement of Cash Flows

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Question 41

Multiple Choice

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Operating expenses other than depreciation for the year were $400,000. Prepaid expenses increased by $17,000 and accrued expenses decreased by $30,000 during the year. Cash payments for operating expenses to be reported on the cash flow statement using the direct method would be

A) $353,000
B) $413,000
C) $447,000
D) $383,000

E) All of the above
F) None of the above

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Question 42

Multiple Choice

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The current period statement of cash flows includes the flowing: The cash balance at the end of the period is

A) $45,000
B) $635,000
C) $355,000
D) $125,000

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

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Question 43

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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.

If accounts payable have increased during a period

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?

Which of the following does not represent an outflow of cash and therefore would not be reported on the statement of cash flows as a use of cash?

The cash flows from operating activities are reported by the direct method on the statement of cash flows. Determine the following:

Free cash flow is cash flow from operations, less cash used to purchase fixed assets to maintain productive capacity and cash used for dividends.

The following selected account balances appeared on the financial statements of the Washington Company: The Washington Company uses the direct method to calculate net cash flow from operating activities. Cash collections from customers are

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

A ten-year bond was issued at par for $250,000 cash. This transaction should be shown on a statement of cash flows under

There is no difference in the Investing and Financing sections of the statement of cash flows using the indirect and direct method.

If a gain of $11,000 is realized in selling (for cash) office equipment having a book value of $55,000, the total amount reported in the cash flows from investing activities section of the statement of cash flows is

Lamar Corporation purchased land for $150,000. Later in the year the company sold land with a book value of $190,000 for $200,000. Show how the effects of these transactions are reported on the statement of cash flows using the indirect method.

Durrand Corporation's accumulated depreciation increased by $12,000, while patents decreased by $2,200 between consecutive balance sheet dates. There were no purchases or sales of depreciable or intangible assets during the year. In addition, the income statement showed a gain of $4,300 from sale of land. Reconcile a net income of $65,000 to net cash flow from operating activities.

A corporation uses the indirect method for preparing the Statement of Cash Flows. A fixed asset has been sold for $25,000 representing a gain of $4,500. The value in the operating activities section regarding this event would be:

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

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

The net income reported on an income statement for the current year was $63,000. Depreciation recorded on fixed assets for the year was $24,000. Balances of the current asset and current liability accounts at the end and beginning of the year are listed below. Prepare the cash flows from operating activities section of a statement of cash flows using the indirect method.

There are two alternatives to reporting cash flows from operating activities in the statement of cash flows: (1) the direct method and (2) the indirect method.