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Exam 12: Statement of Cash Flows

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Question 51

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The direct method of preparing the statement of cash flows shows increases and decreases in noncash current assets and current liabilities to arrive at cash flows from operating activities.

A) True
B) False

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Question 52

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The Beech Company reported the following partial list of accounts, beginning and ending balances and results for 2013: Required: Present in good form the cash flows from operating activities section of a statement of cash flows using the direct method.

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Question 53

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When using the indirect method to complete the cash flows from operating activities section of the statement of cash flows, what is the proper disposition of depreciation expense?

The Chenoweth Corporation provided the following partial list of accounts, balances and additional information for 2013: Net income for 2013 was reported as $200,000. Required: Prepare the financing activities section of the statement of cash flows.

Prepare the investing activities section of Westerman's statement of cash flows.

In preparing the statement of cash flows by the indirect method, increases in noncash current assets are subtracted from net income.

The 2013 income statement of Peterson Co. reported total sales revenue of $230,000; the 2012 balance sheet showed a balance in accounts receivable of $35,000 while the 2013 balance sheet showed a balance in accounts receivable of $50,000. The amount of cash collected from customers was:

George Co. purchased land by issuing a note payable in the amount of $250,000.

Prepare the financing activities section of Westerman's statement of cash flows.

Under the indirect method, which of the following items would be added to net income to determine the cash flow from operating activities?

A mortgage issued in exchange for a building would be reported on the statement of cash flows in the

George Co. made a $15,000 cash payment on a term loan. The payment included a $13,000 reduction of principal as well as $2,000 of interest. Show the combined effects of the events.

Ball Corp. had beginning Accounts Receivable of $154,000 and ending Accounts Receivable of $128,000. If total sales were $440,000, what amount of cash was collected from customers, and how would it be reported on the statement of cash flows using the indirect method? How would it be reported using the direct method?

At the beginning of 2013, Garrett Co. paid cash to purchase equipment costing $90,000. There was $15,000 of depreciation expense recognized during the accounting period. Show the combined effects of the events.

On January 1, 2012, Mayson Corporation signed a contract to perform $25,000 worth of services for the Phillips Company over the next three years. Which of the following indicates the effects of this event on the income statement and statement of cash flows of Mayson Corporation?

The following information is for Carson Company: Additional data for 2013: (1) Sales on account for the period were $160,000. (2) Operating expenses for the period were $104,000. Based on this limited information, what was the net cash inflow from operations?

The Lemmon Corporation reported a beginning balance of $1,200 in its Prepaid Insurance account for 2013. During the year, a total of $16,000 was recognized as Insurance Expense and the Prepaid Insurance account had an ending balance of $1,600. How much cash did Lemmon pay for insurance during 2013?

List the three categories of cash inflows and outflows shown on the statement of cash flows.

What is the net cash flow from financing activities?

How can cash flow from operating activities be greater than net income from operations?