Exam 14: Statement of Cash Flows

The net income reported on the income statement for the current year was $210,000. Depreciation recorded on equipment and a building amount to $62,500 for the year. Balances of the current asset and current liabilities accounts at the beginning and end of the year are as follows: Required: 1) Prepare the cash flows from operating activities section of the statement of cash flows, using the indirect method. 2) If the direct method had been used, would the net cash flow from operating activities have been the same? Explain.

For each of the following activities that may take place during the accounting period, indicate the effect a-g) on the statement of cash flows prepared using the indirect method. Choices may be selected as the answer for more than one question. -exchange of land for common stock

Under GAAP, cash receipts from interest and dividends are classified as

Norris Company declared cash dividends of $60,000 during the year. Cash dividends payable were $20,000 at the beginning of the year and $25,000 at the end of the year. The amount of cash Norris Co. used for payment of dividends during the year was

The statement of cash flows shows the effects on cash of a company's operating, investing, and financing activities.

In preparing the cash flows from operating activities section of the statement of cash flows by the indirect method, the net decrease in inventories from the beginning to the end of the period is added to net income for the period.

The manner of reporting cash flows from investing and financing activities will be different under the direct method as compared to the indirect method.

Preferred stock issued in exchange for land would be reported in the statement of cash flows in

On the statement of cash flows prepared by the indirect method, the cash flows from operating activities section would include

The declaration and issuance of a stock dividend would be reported on the statement of cash flows.

Rogers Company reported net income of $35,000 for the year. During the year, accounts receivable increased by $7,000, accounts payable decreased by $3,000 and depreciation expense of $8,000 was recorded. Net cash provided by operating activities for the year is

Free cash flow is flow cash from operations less cash used for

A building with a book value of $54,000 is sold for $63,000 cash. Using the indirect method, this transaction should be shown on the statement of cash flows as follows:

The net income reported on the income statement for the current year was $250,000. Depreciation recorded on fixed assets and amortization of patents for the year were $40,000 and $9,000, respectively. Balances of current asset and current liability accounts at the end and at the beginning of the year are as follows: What is the amount of cash flows from operating activities reported on the statement of cash flows prepared by the indirect method?

A corporation uses the indirect method for preparing the statement of cash flows. A fixed asset has been sold for $25,000 representing a gain of $4,500. The value in the operating activities section regarding this event would be

Which of the following should be added to net income in calculating net cash flow from operating activities using the indirect method?

For each of the following, identify whether it would be disclosed as an operating O), financing F), or investing I) activity on the statement of cash flows under the indirect method. a. _____purchased buildings b. _____sold patents c. _____net income d. _____issued common stock e. _____paid cash dividends f. _____depreciation expense

Cash payments for merchandise were

Baxter Company reported a net loss of $13,000 for the year ended December 31. During the year, accounts receivable decreased by $5,000, merchandise inventory increased by $8,000, accounts payable increased by $10,000, and depreciation expense of $4,000 was recorded. During the year, operating activities

On the statement of cash flows prepared by the indirect method, a $50,000 gain on the sale of investments would be