Exam 21: Statement of Cash Flows Revisited

Which of the following causes a change in the amount of cash held by a company?

The following information for Wilbur Company is available at December 31, 2011, and for the year then ending: The following information is available for specific accounts and transactions: 1. On February 2, 2011, Wilbur issued a 10 percent stock dividend to shareholders of record on January 15, 2011. Market price per share of the common stock on February 2, 2011, was $15. 2. On March 1, 2011, Wilbur issued 3,800 shares of common stock for land. The common stock had a current market value of approximately $40,000 on March 1, 2011. 3. On April 15, 2011, Wilbur repurchased its long-term bonds payable with a face value of $50,000 for cash. 4. On June 30, 2011, Wilbur sold for $19,000 cash equipment having a book value of $23,000 and an original cost of $53,000. 5. On September 30, 2011, Wilbur declared and paid a 4 cent per share cash dividend to shareholders of record on August 1, 2011. 6. On October 1, 2011, Wilbur purchased land for $85,000 cash. Required: Prepare a statement of cash flows for Wilbur Company for the year ending December 31, 2011, using the indirect method.

Which of the following items involving current trade accounts receivable is most likely to appear in a statement of cash flows?

What is the effect of the sale of $3,000 worth of cash equivalents at cost in the statement of cash flows prepared under the direct method?

Assume cash paid to suppliers for 2011 is $420,000, that merchandise inventory increased by $20,000 during the year, and that cost of goods sold was $415,000 for the year. During 2011, accounts payable must have

Jackson Company began the current year with the following: During the current year, the following events occurred: At the end of the current year, the company showed a balance in gross accounts receivable (before the allowance for doubtful accounts) of $16,800. What amount would be shown as an operating cash inflow in the statement of cash flows under the indirect method?

A loss on the sale of machinery in the ordinary course of business should be presented in a statement of cash flows as a(n):

At the beginning of the year, a firm leased equipment on a capital lease, capitalizing $60,000 in its lease receivable account. The contract calls for December 31 payments of $15,000. The lessor's annual reporting period ends December 31 and the contract reflects 10% interest. The lessee made the first payment as required. The direct method statement of cash flows for the lessor should reflect which of the following in the first year of the lease contract (ignore noncash disclosures)?

The conversion of nonparticipating preferred stock into common stock should be presented in a statement of cash flows as a(n)

A loss on the sale of machinery in the ordinary course of business should be presented in a statement of cash flows prepared under the indirect method as a(n)

A company's income statement disclosed $45,000 of investment revenue on equity method investments. The company did not purchase or dispose of any such investments during the year, yet the equity method investments account increased $30,000 during the year. What is the complete disclosure of these events in the statement of cash flows prepared under the indirect method?

Which of the following items is included on a statement of cash flows as a noncash exchange?

The records of George Company provided the following information for the year ended December 31, 2011: Additional Information: 1. Sold the long-term investment at cost, for cash. The securities were classified as available-for-sale. The market value had not changed since acquisition. 2. Declared and paid a cash dividend of $28,000. 3. Purchased operational assets that cost $68,000 by giving a $48,000 long-term note payable and by paying $20,000 cash. 4. Paid a $16,000 long-term note payable by issuing common stock having a market value of $16,000. 5. Issued a stock dividend of $44,000. Required: Prepare a statement of cash flows using the direct method for George Company for the year ending December 31, 2011.

A firm's accumulated depreciation account increased $30,000 for the year and total plant assets at cost increased $200,000. During the year, the firm purchased $350,000 of new equipment for cash, and sold equipment for $50,000 cash. This equipment had been depreciated $30,000 at the time of the sale. What is the complete disclosure of these events in the statement of cash flows prepared under the direct method?

Which of the following is not an adjustment to reconcile net income to cash from operating activities?

Which of the following is a deduction from net income in reconciling net income to cash flow from operating activities?

In preparing a statement of cash flows, the reconciliation of net income to cash from operating activities does not include

Cash inflows from investing activities would include all of the following except

A company sold an investment in trading securities originally costing $30,000, for $28,000. At the beginning of the year, the investment had a valuation allowance of $3,000, debit. What is the correct disclosure for these events on the statement of cash flows prepared under the direct method, assuming that this is the only investment in trading securities?

Daniels Corporation reports its income from investments under the equity method and recognized income of $15,000 from its investment in Travis Company during the current year. Travis declared no dividends during the current year. On Daniels' statement of cash flows the $15,000 would