Exam 5: Statement of Cash Flows and Articulation

Brown Company reported the following information for the year 2011: Sales revenue of $280,000; cost of goods sold of $100,000; selling expenses of $40,000; administrative expenses of $35,000; depreciation of $25,000; interest expense of $8,000; and income tax expense of $28,000. All sales were made for cash and all expenses (other than depreciation and bond premium amortization of $2,000) were paid in cash. All current assets and current liabilities remained unchanged. How much cash was provided by operations for Brown Company during 2011?

Net income for the Frost Company for the most recent year was $150,000, consisting of $875,000 of revenues, $360,000 of cost of goods sold, and $365,000 of operating expenses. The following changes in current assets and current liabilities have been identified: Required: Calculate the cash flows from operating activities for the year, applying the direct method. Identify the individual amounts that would be disclosed in the statement of cash flows where possible.

Cotton Corp. reported net income of $420,000 for 2011. Changes occurred in several balance sheet accounts as follows: Additional information: In Cotton's 2011 statement of cash flows, net cash used in investing activities should be

In a statement of cash flows, payments to acquire bonds or mortgages of other entities should be classified as cash outflows for

Users of financial statements are interested in the ability of a firm to generate favorable cash flows. This is one reason why the FASB has required the inclusion of a statement of cash flows in the primary financial statements of an enterprise. A cash flow of major interest to investors is the dividends an enterprise has paid in the past and will pay in the future. Investors are particularly interested in the prediction of future dividends. The prediction of the cash flows associated with dividends requires, however, that investors have information regarding other cash flows of the enterprise. Identify cash flows of an enterprise the knowledge of which would be useful to users of the financial statement in the prediction of future dividends.

In its accrual basis income statement for the year ended December 31, 2011, Nelson Company reported revenue of $3,500,000. Additional information is as follows: Nelson should report cash collected from customers in its 2011 statement of cash flows (direct method) in the amount of

Which of the following would be an example of an investing activity?

In preparing a statement of cash flows, sale of treasury stock at an amount greater than cost would be classified as a(n)

In a statement of cash flows, if equipment is sold at a gain, the amount shown as a cash inflow from investing activities equals the carrying amount of the equipment

Dicksen Company's income statement for the year ended December 31, 2011, reported net income of $360,000. The financial statements also disclosed the following information: Net cash provided by operating activities for 2011 should be reported as

UR Company is preparing a forecast of its net income for the year 2011. In addition, UR plans to construct a forecasted statement of cash flows for 2011. The balance sheet and income statement data for 2010 are presented below, as well as a forecast of the balance sheet for 2011. Management expects sales in 2011 to rise to $6,000,000. In order to achieve this level of increase, management estimates that operating expenses (specifically sales commissions) will rise to $410,134. Prepare a forecasted income statement and forecasted statement of cash flows (using the indirect method) for the year ended December 31, 2011, for UR Company. Calculate the cash flow to net income and cash flow adequacy ratios. There were no changes in stockholders' equity other than net income and cash dividends.

The following information is available from the financial statements of Worthington Corporation for the year ended December 31, 2011: What is Worthington Corporation's net cash flow from operating activities?

During 2011, Lewis Corp. acquired buildings for $325,000, paying $75,000 cash and signing a 10% mortgage note payable in 10 years for the balance. How should the transaction be shown in the cash flow statement for Lewis in 2011?

See information regarding Frye Company above. The net cash provided by (used in) all activities is

A cash dividend that is declared during an accounting period, to be paid in the next accounting period, may be presented in the statement of cash flows in which of the following ways?

Partial balance sheet data and additional information for Deloitte Industries are given below: Additional information: Prepare the investing and financing activities sections of the statement of cash flows for the year ending December 31, 2011.

Which of the following would not be classified as an operating activity?

In preparing a statement of cash flows, which of the following transactions would be considered an investing activity?

The following information is provided by Northern Company: Northern Company Balance Sheet December 31, 2011 and 2010 Northern Company Income Statement For the Years Ended December 31, 2011 and 2010 Additional information pertinent to this company is as follows: Required: Determine the following amounts:

Which of the following is classified as a cash inflow from financing activities?