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Exam 11: The Statement Of Cash Flows

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Question 71

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Maritime Marine Services Selected data from the financial statements for the years ended December 31, 2020 and 2019, are presented below: The following additional information was obtained from the company's records: -Refer to Maritime Marine Services. What was the amount paid to retire long-term debt during 2020?

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$150
$1,200 (Long-term debt ba...

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Question 72

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Use the following codes to indicate how the cash flow effect, if any, of each transaction or event would be reported on a statement of cash flows if the operating activities section is prepared using the indirect method. (Choices may be used more than once.) -Paid cash dividends.

A) Operating activity--add to net income
B) Operating activity--deduct from net income
C) Inflow from investing activity
D) Outflow from investing activity
E) Inflow from financing activity
F) Outflow from financing activity
G) Noncash investing and financing activity
H) Not reported on statement of cash flows

I) A) and C)
J) E) and H)

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Question 73

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Which of the following statements regarding the statement of cash flows is true?

Selected information from the company's financial records is presented below: During 2020, the company sold equipment with a cost of $50,000 and accumulated depreciation of $30,000. A gain of $10,000 was recognized on the sale of the equipment. This was the only equipment sale during the year. -Refer to Metalcrafts, Inc. What was depreciation expense for 2020?

Presented below is the operating activities section of a statement of cash flows for the current year: Which method of preparing the operating activities section was used?

Use the following codes to indicate how the cash flow effect, if any, of each transaction or event would be reported on a statement of cash flows if the operating activities section is prepared using the indirect method. (Choices may be used more than once.) -Received cash from the sale of securities.

When using the indirect method to determine operating cash flows, where is the gain from selling a long-term investment recognized? (The proceeds from selling the investment are considered separately.)

The following information was reported by a catering company: What amount would be reported in the operating activities section of the statement of cash flows for Payments for Operating Expenses under the direct method?

A company reported the following information: If the indirect method is used to prepare the operating activities section of the statement of cash flows, what amount will be reported as net cash inflow from operating activities for 2020?

Match these terms with their correct definition. -Represents the cash flow that a company is able to generate after considering the maintenance or expansion of its assets and the payment of dividends.

When using the indirect method to determine operating cash flows, how is the issuing of stock for cash shown on the Statement of Cash Flows?

Depreciation is a noncash expense that is subtracted from net income in determining cash provided from operating activities under the indirect method.

Upon reviewing Mack's Truck Stop's Statement of Cash Flows, the following was noted: From this information, the most likely explanation is that this company is

The issuance of common stock in exchange for a building would appear both as a cash inflow in the financing activities section of the cash flow statement and also as a cash outflow in the investing activities section.

If the balance of prepaid insurance was the same on January 1, 2019, and December 31, 2019, then the insurance expense must have been ____________________ the cash payments made for insurance during the year.

Mary Kay Cosmetics Selected data and additional information from the company's records are presented below: Additional information: -Refer to Mary Kay Cosmetics. What amount was recorded as depreciation expense during 2020?

The cash flow adequacy ratio is defined as Free Cash Flow / Average Amount of Debt Maturing over the Next Five Years.

When using the direct method to determine operating cash flows, how is depreciation expense recorded on the Statement of Cash Flows?

Match these terms with their correct definition. -A transaction that represents both an investing and financing activity but that does not involve the receipt or payment of cash.

Merry Maids Company Merry Maids Company began 2019 with a cash and cash equivalents balance of $7,670. Consolidated statements of cash flows for the years ended December 31, 2020 and 2019, are presented below: -Refer to Merry Maids Company. In 2020, why are depreciation and amortization expenses added back to net income in the operating activities section of the statement of cash flows?