Exam 12: Reporting and Interpreting the Statement of Cash Flows

Under the indirect method, changes in current assets are used in determining net cash flows from operating activities and changes in current liabilities are used in determining cash flows from financing activities.

Given this information, what is the amount of cash paid for insurance?

If Sales are $850,000 and the beginning and ending balances of Accounts Receivable are $43,000 and $48,000, respectively, the cash collected from customers is:

What was the amount of cash paid for purchases of equipment during the year?

Given this information, what is the amount of cash paid for rent?

If Interest Revenue for the period is $14,000 and the beginning and ending Interest Receivable balances are $1,320 and $5,900, respectively, cash received for interest is:

What is the net cash flows from investing activities?

A company purchases a $300,000 building, paying $200,000 in cash and signing a $100,000 promissory note. What will be reported on the statement of cash flows as a result of this transaction?

Which of the following statements is NOT true?

Which of the following statements regarding cash flows from investing activities is true?

When the indirect method is used, if accounts receivable increases during the accounting period, the change in accounts receivable is:

Company X paid Company Y $1.35 million for a new plant. During the same accounting period, Company X experienced the following changes in its balance sheet: Cash decreased by $350,000, Accounts Receivable increased by $321,300, Inventory increased by $275,800, Property, Plant, and Equipment increased by $752,900, and Bonds Payable increased by $1 million. The net cash flow from financing activities is:

Use the information provided above to calculate the net cash flow from operat ing activities in 2011 using the direct method.

Assume a company uses the indirect method to prepare its statement of cash flows. If inventory decreases and unearned revenue increases during an accounting period, what does the company do with the changes in these accounts to calculate net cash flows from operating activities?

Cash flows from financing activities:

Which of the following statements regarding financing activities is NOT true?

Cinno Company reported net income of $20,000 for the year ended December 31, 2011. During the year, inventories decreased by $7,000, accounts payable decreased by $8,000, depreciation expense was $10,000, and accounts receivable increased by $6,500. Net cash provided by operations in 2011, computed using the indirect method, was:

Significant noncash financing and investing activities are not reported on the statement of cash flows since they do not represent a cash flow.

When preparing the operating activities section of the statement of cash flows using the indirect method, an increase in income taxes payable is added to net income.

If an analyst wishes to analyze the ability of a company's operating activities to fund its level of investment in property, plant, and equipment, a good measure would be the: