FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 11: The Statement of Cash Flows

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 91

Multiple Choice

Review LaterAdd Note

Review Later

When the direct method is used to determine operating cash flows,how is the retirement of bonds payable at their maturity date shown on the statement of cash flows?

A) as an operating activity
B) as an investing activity
C) as a financing activity
D) as a noncash investing and financing activity

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

Correct Answer

verified

Show Answer

Question 92

Multiple Choice

Review LaterAdd Note

Review Later

Which of the following is an operating activity?

A) purchase of investments for cash
B) purchase of equipment for cash
C) sale of merchandise for cash
D) sale of land for cash

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

Correct Answer

verified

Show Answer

Question 93

Short Answer

Review LaterAdd Note

A decrease in retained earnings represents dividends that were ____________________ during the period,not necessarily those that were paid.

When the indirect method is used to determine operating cash flows,how is the issuance of shares for cash shown on the statement of cash flows?

One of the firm's financial analysts is assessing the performance of three particular companies whose cash flow statements for the last three years are presented below: -Refer to McCullow Investment Group.Ignoring the differences in magnitude,comment on the similarities and differences in the cash flows of the three companies.

The statement of cash flows is considered to be a good indicator of current cash inflows and outflows.

To be classified as a cash equivalent,an item must be readily convertible to a known amount of cash and have an original maturity to the investor of three months or more.

Cash flows from selling machinery would be classified as investing activities.

Mack's Truck Stop Upon reviewing Mack's Truck Stop's statement of cash flows, the following was noted: $\begin{array} { l r } \text { Cash flows from operating activites } & \$ 15,000 \\\text { Cash flows from investing activities } & 70,000 \\\text { Cash flows from financing activites } & ( 50,000 ) \end{array}$ -Refer to the figure Mack's Truck Stop.From this information,which of the following statements reflects the company's activities?

Match these terms with their correct definition. -includes cash received from the sale of property,plant,and equipment and cash paid to purchase equity securities

Which method of preparing the operating activities section of a statement of cash flows adjusts net income to remove the effects of deferrals and accruals for revenues and expenses?

Which method of preparing the operating activities section of a statement of cash flows reports major classes of gross cash receipts and cash payments for revenues and expenses?

Mr. Transmission The following information was taken from the financial records of Mr. Transmission: $\begin{array}{llr} \text { Accounts payable, December 31 , Year 2 } &\$88,000\\ \text {Accounts payable, December 31, Year 1 } &99,000\\ \text { Operating expenses for Year 2 } &999,00\end{array}$ -Refer to the figure Mr.Transmission.Under the indirect method,how would the change in accounts payable be reported in the operating activities section of Mr.Transmission's statement of cash flows?

Under the ____________________ method of preparing a statement of cash flows,the net cash flow from operating activities is computed by adjusting net income to remove the effect of all deferrals of past operating cash receipts and payments,and all accruals of future operating cash receipts or payments.

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

Company D The following information was reported by a catering company: $\begin{array}{llr} \text { Accrued liabilities, December 31, Year 2 } &\$92,000\\ \text {Accued liablities, December 31, Year 1 } &55,000\\ \text { Operating expenses for Year 2} &200,000\end{array}$ -Refer to the figure Company D.Under the direct method,what amount would be reported in the operating activities section of Company D's statement of cash flows for payments for operating expenses?

Company C The following chart represents Company C's operating activities section of a statement of cash flows for Year 1: $\begin{array}{l} \underline{\text { Operatine artivities: }}\\ \text { Cash collected from customers } & \$ 550,000 \\\text { Cash payments for merchandise } & ( 150,000 ) \\\text { Cash payments for operating expenses } & \underline{( 275,000 ) }\\\text { Net cash inflow from operating activities } & \underline{ \$ 125,000}\end{array}$ -Refer to the figure Company C.Which method of preparing the operating activities section was used?

When a company sells its own common shares,it is a(n)____________________ activity on the statement of cash flows.

Metalcrafts Inc.Selected information from the company's financial records is presented in the following table: $\begin{array}{lr}\text { Equipment, December 31, Year 1 } & \$ 300,000 \\\text { Equipment, December 31, Year 2 } & 400,000 \\\text { Accumulated depreciation, December 31, Year 1 } & 80,000\\\text { Accumulated depreciation, December } 31 \text {, Year } 2&60,000\end{array}$ During Year 2, 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. Only one equipment sale was made during the year. -Refer to the figure Metalcrafts Inc.What amount would be reported as the cash proceeds from the sale of equipment?

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