FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 13: Statement of Cash Flows

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 101

Essay

Review LaterAdd Note

Review Later

The net income reported on the income statement for the current year was $210,000. Depreciation recorded on equipment and a building amount to $62,500 for the year. Balances of the current asset and current liabilities accounts at the beginning and end of the year are as follows: ​ $\begin{array} { | l | r | r | } \hline & \text { End of Year } & \text { Beginning of Year } \\\hline \text { Cash } & \$ 56,000 & \$ 59,500 \\\hline \text { Accounts receivable (net) } & 71,000 & 73,400 \\\hline \text { Inventories } & 140,000 & 126,500 \\\hline \text { Prepaid expenses } & 7,800 & 8,400 \\\hline \text { Accounts payable (merchandise creditors) } & 62,600 & 66,400 \\\hline \text { Sal aries payable } & 9,000 & 8,250 \\\hline\end{array}$ ​ ​ (a) Prepare the cash flows from operating activities section of the statement of cash flows, using the indirect method. (b) If the direct method had been used, would the net cash flow from operating activities have been the same? Explain.

Correct Answer

verified

Show Answer

Question 102

Essay

Review LaterAdd Note

Review Later

The board of directors declared cash dividends total $168,000 during the year. The comparative balance sheet indicated dividends payable of $46,000 at the beginning of the year and $42,000 at the end of the year. What was the amount of cash payments to stockholders during the year?

Correct Answer

verified

_TB2281_00 ​
The company probably had fo...

View Answer

Show Answer

Question 103

True/False

Review LaterAdd Note

Sales reported on the income statement were $372,000. The accounts receivable balance declined $4,500 over the year. The amount of cash received from customers was $367,500.

Net income for the year was $45,500. Accounts receivable increased $5,500, and accounts payable increased by $11,200. Under the indirect method, the cash flow from operations is

Firefly Inc. sold land for $225,000 cash. The land had been purchased five years earlier for $275,000. The loss on the sale was reported on the income statement. On the statement of cash flows, what amount should Firefly report as an investing activity from the sale of the land?

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.

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.

Using the indirect method, if land costing $85,000 was sold for $145,000, the amount reported in the financing activities section of the statement of cash flows would be $85,000.

The cash flows from operating activities are reported by the direct method on the statement of cash flows. Determine the following: (a) If sales for the current year were $\$ 695,000$ and accounts receivable decreased by $\$ 43,500$ during the year, what was the amount of cash received from customers? (b) If income tax expense for the current year was $\$ 56,000$ and income tax payable decreased by $\$ 5,200$ during the year, what was the amount of cash payments of income tax?

In preparing the cash flows from operating activities section of the statement of cash flows by the indirect method, the amortization of bond discount for the period is deducted from the net income for the period.

Identify the section of the statement of cash flows (a-d) where each of the following items would be reported. -Dividends received on investment

Which of the following represents an inflow of cash and therefore would be reported on the statement of cash flows?

On the basis of the following data for Garrett Co. for Years 1 and 2 ended December 31, 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 equipment costing $85,000 with accumulated depreciation of $65,000 was sold for $15,000; that the stock was issued for cash; and that the only entries in the retained earnings account were for net income of $56,000 and cash dividends declared of $18,000.

Identify the section of the statement of cash flows (a-d) where each of the following items would be reported. -Increase in accounts receivable

For each of the following, identify whether it would be disclosed as an activity on the statement of cash flows under the indirect method.