FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 16: Reporting the Statement of Cash Flows

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 61

Essay

Review LaterAdd Note

Review Later

Use the following financial statements and additional information to (1)prepare a complete statement of cash flows for the year ended December 31,2013.The cash provided or used by operating activities should be reported using the direct method,and (2)compute the company's cash flow on total assets ratio for 2013. Additional Information a.A $20,000 note payable is retired at its carrying value in exchange for cash. b.The only changes affecting retained earnings are net income and cash dividends paid. c.New equipment is acquired for $120,000 cash. d.Received cash for the sale of equipment that had cost $85,000,yielding a gain of $4,700. e.Prepaid expenses relate to Other Expenses on the income statement. f.All purchases and sales of merchandise inventory are on credit.

Correct Answer

verified

(1)
(2)$...

View Answer

Show Answer

Question 62

Essay

Review LaterAdd Note

Review Later

Use the following information about the calendar-year cash flows of MacArthur Company to prepare a statement of cash flows (direct method)and a schedule of noncash investing and financing activities.

Correct Answer

verified

Show Answer

Question 63

Short Answer

Review LaterAdd Note

Information to prepare the statement of cash flows usually comes from three sources: (1)_______________,(2)_______________________,and (3)____________________.

The following selected account balances are taken from a merchandising company's records: (a)Calculate the cash payments made during 2013 for merchandise.Assume all of the company's accounts payable balances result from merchandise purchases. (b)Calculate the cash receipts from customer sales during 2013. (c)Calculate the cash payments for salaries during 2013.

When preparing the operating activities section of the statement of cash flows using the indirect method,non-operating gains are added to net income.

Noncash investing and financing activities may be disclosed in:

Sebring Company reports depreciation expense of $40,000 for Year 2.Also,equipment costing $140,000 was sold for a $10,000 loss in Year 2.The following selected information is available for Sebring Company from its comparative balance sheet.Compute the cash received from the sale of the equipment.

When preparing the operating activities section of the statement of cash flows using the indirect method,a decrease in accounts receivable is subtracted from net income.

Describe the format of the statement of cash flows,including the reporting of significant noncash investing and financing activities.

A company had average total assets of $1,760,000,total cash flows of $1,320,000,cash flows from operations of $205,000,and cash flows from financing of $850,000.The cash flow on total assets ratio equals:

A purchase of land in exchange for shares of stock is disclosed on the statement of cash flows or in a note to the statement.

When preparing the operating activities section of the statement of cash flows using the indirect method,expenses with no cash outflows are added back to net income.

Typical cash flows from investing activities include each of the following except:

Castine reports net income of $305,000 for the year ended December 31,Year 2.It also reports $93,700 depreciation expense and a $10,000 loss on the sale of equipment.Its comparative balance sheet reveals a $40,200 increase in accounts receivable,a $10,200 decrease in prepaid expenses,a $15,200 increase in accounts payable,a $12,500 decrease in wages payable,a $75,000 increase in equipment,and a $100,000 decrease in notes payable.Calculate the increase in cash for Year 2.

When preparing a statement of cash flows on the indirect method,which of the following is correct?

Probably the most important section of the statement of cash flows in analyzing the financial performance of a company's ongoing business is the ____________ section.

A purchase of land in exchange for a long-term note payable is reported in the investing section of the statement of cash flows.

A noncash investing transaction should be disclosed in either a footnote or at the bottom of the statement of cash flows.

A company purchased equipment for $150,000 by paying $50,000 and signing a $100,000 note payable.The entire transaction is disclosed to users on the statement of cash flows and/or in the notes to the financial statements.

Trenton reports net income of $230,000 for the year ended December 31,Year 2.It also reports $87,700 depreciation expense and a $5,000 gain on the sale of equipment.Its comparative balance sheet reveals a $35,500 decrease in accounts receivable,a $15,750 increase in accounts payable,and a $12,500 decrease in wages payable.Calculate the new cash provided (used) in operating activities using the indirect method.