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Exam 12: Reporting Cash Flows

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Question 21

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The appropriate section in the statement of cash flows for reporting the receipt of cash dividends from investments in securities is:

A) Operating activities.
B) Financing activities.
C) Investing activities.
D) Schedule of noncash investing or financing activity.
E) This is not reported on the statement of cash flows.

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

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Question 22

Multiple Choice

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A method of computing and reporting the net cash provided (used) by operating activities that lists the major items of operating cash receipts,and then subtracts the major items of operating cash payments.

A) Financing activities
B) Investing activities
C) Statement of cash flows
D) Indirect method
E) Direct method
F) Operating activities

G) D) and E)
H) C) and D)

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Question 23

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A company's income statement showed the following: net income,$124,000 and depreciation expense,$30,000.An examination of the company's current assets and current liabilities showed the following changes: accounts receivable decreased $9,400; merchandise inventory increased $18,000; and accounts payable increased $3,400.Calculate the net cash provided or used by operating activities.

Cash receipts and cash payments are classified as operating,investing,or financing activities on the statement of cash flows.

The payment of cash dividends never changes the balance of retained earnings.

The accountant for Crusoe Company is preparing the company's statement of cash flows for the fiscal year just ended.The following information is available: -What is the ending balance for retained earnings?

Cash flow statements help users decide whether a company has enough cash to pay its debts.

Which of the following transactions or events should be reported as a source of cash from operating activities when using the direct method?

A company had average total assets of $3,216,000,total cash flows of $1,320,000,cash flows from operations of $554,000,and cash flows for plant assets of $850,000.The cash flow on total assets ratio equals:

A company had net cash flows from operations of $120,000,cash flows from financing of $330,000,total cash flows of $500,000,and average total assets of $2,500,000.The cash flow on total assets ratio equals:

A noncash investing activity should be disclosed in a note to the statement of cash flows or on a separate schedule.

An investment that is readily convertible to a known amount of cash and that is sufficiently close to its maturity date so that its market value is unaffected by interest rate changes is a(n) :

The payment of cash dividends to shareholders is classified as a financing activity.

Define and explain significant noncash investing and financing activities and the method of reporting them on the statement of cash flows.

When the operating activities section of the statement of cash flows is reported using the direct method:

The indirect method separately lists each major item of operating cash receipts and cash payments.

Explain how cash flows from investing and financing activities are determined.

Cash flows from interest received on loans are reported in the statement of cash flows as part of:

On a spreadsheet used to prepare the operating activities section of the statement of cash flows,depreciation expense does not require an entry in the Analysis of Changes columns because it is a noncash item.

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