Exam 16: Statement of Cash Flows

Cash flows from investing activities, as part of the statement of cash flows, would include any receipts from the issuance of bonds payable.

A 10-year bond was issued at par for $250,000 cash. This transaction should be shown on a statement of cash flows under

The comparative balance sheets of ConnieJo Company, for Years 1 and 2 ended December 31, appear below in condensed form.​ The income statement for the current year is as follows:​ Additional data for the current year are as follows: (a)Fully depreciated equipment costing $39,000 was scrapped, no salvage, and equipment was purchased for $157,000. (b)Bonds payable for $100,000 were retired by payment at their face amount. (c)5,000 shares of common stock were issued at $15 for cash. (d)Cash dividends declared were paid, $28,000. (e)All sales are on account.​Prepare a statement of cash flows using the direct method of reporting cash flows from operating activities.​

The current period statement of cash flows includes the following:​ The cash balance at the end of the period is

To determine cash payments for operating expenses for the statement of cash flows using the direct method, a decrease in accrued expenses is added to operating expenses payable other than depreciation.

The order of presentation of activities on the statement of cash flows is

The statement of cash flows is not useful for

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 following two scenarios are independent of one another. (a)An analysis of the general ledger accounts indicates that office equipment was sold for $39,600 during the year. The equipment originally cost $68,000 and had accumulated depreciation of $22,500 on the date of sale. Indicate how the elements of this transaction would be reported on the statement of cash flows using the indirect method. (b)An analysis of the general ledger accounts indicates that delivery equipment, which cost $97,000 and on which accumulated depreciation totaled $42,100 on the date of sale, was sold for $57,500 during the year. Using this information, indicate the items to be reported on the statement of cash flows.

Identify which section of the statement of cash flows (using the indirect method) would present information regarding the following activities. (Use O for operating, I for investing, or F for financing.)? a. Issued common stock b. Redeemed bonds c. Issued preferred stock d. Purchased patents e. Net income f. Paid cash dividends g. Purchased treasury stock h. Sold long-term investment i. Sold equipment j. Purchased buildings k. Issued bonds

In preparing the Cash flows from operating activities section of the statement of cash flows by the indirect method, the amortization of bond discount for the period is deducted from the net income for the period.

If a business issued bonds payable in exchange for land, the transaction would be reported in a separate schedule on the statement of cash flows.

Which of the following should be shown on a statement of cash flows under the financing activities section?

Cash flows from investing activities, as part of the statement of cash flows, would include any receipts from the sale of land.

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

Under the direct method of preparing a statement of cash flows, the gain on the sale of land is not adjusted or reported as part of cash flows from operating activities.

Income tax was $175,000 for the year. Income tax payable was $30,000 and $40,000 at the beginning and end of the year, respectively. Cash payments for income tax reported on the statement of cash flows using the direct method is

On the statement of cash flows prepared using the indirect method, a $7,500 gain on the sale of fixed assets would be

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. -Acquisition of treasury stock

Complete each of the columns in the table below, indicating in which section each item would be reported on the statement of cash flows (operating, investing, or financing), the amount that would be reported, and whether the item would create an increase or decrease in cash. For items that affect more than one section of the statement, indicate all affected. Assume the indirect method of reporting cash flows from operating activities.The first item has been completed as an example.