Exam 16: Statement of Cash Flows

The comparative balance sheets of Posner 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 $60,000 was scrapped, no salvage, and new equipment was purchased for $183,200. (b)Bonds payable for $100,000 were retired by payment at their face amount. (c)5,000 shares of common stock were issued at $13 for cash. (d)Cash dividends declared and paid, $25,000.​Prepare a statement of cash flows using the indirect method of reporting cash flows from operating activities.

Which of the following is not one of the four basic financial statements?

A business issues 20-year bonds payable in exchange for preferred stock. This transaction would be reported on the statement of cash flows in

The cash flows from operating activities are reported by the direct method on the statement of cash flows. Determine the following: (a)If sales for the current year were $375,000 and accounts receivable increased by $29,000 during the year, what was the amount of cash received from customers? (b)If income tax for the current year was $39,000 and income tax payable decreased by $21,000 during the year, what was the amount of cash payments for income tax?

Indicate the section (operating activities, investing activities, financing activities, or none) in which each of the following would be reported on the statement of cash flows prepared by the indirect method. (a)Gain on sale of fixed assets (b)Net income (c)Retirement of long-term debt (d)Sale of capital stock (e)Distribution of stock dividends (f)Payment of cash dividends (g)Purchase of fixed assets (h)Sale of fixed assets (i)Increase in inventory (j)Payment of interest expense

Balances of the current asset and current liability accounts at the end and beginning of the year are as follows:​ Use the direct method to prepare the Cash flows from operating activities section of a statement of cash flows.

Sales for the year were $600,000. Accounts receivable were $100,000 and $80,000 at the beginning and end of the year, respectively. Cash received from customers to be reported on the statement of cash flows using the direct method is

Fortune Corporation's comparative balance sheet for current assets and liabilities was as follows:​ Adjust Year 2 net income of $65,000 for changes in operating assets and liabilities to arrive at cash flows from operating activities using the indirect method.

When using the spreadsheet (work sheet) for the statement of cash flows, under the indirect method, entries made on the spreadsheet are​

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. Gain from sale of land b. Paid dividends c. Purchased equipment d. Net income e. Issued company's common stock f. Amortization expense

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. -Payment of dividends

On the statement of cash flows, the Cash flows from operating activities section would include

The following information is available from the current period financial statements:​ The net cash flow from operating activities using the indirect method is

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. -Gain on sale of investments

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 major disadvantage of the indirect method of reporting cash flows from operating activities is that the difference between the net amount of cash flows from operating activities and net income is emphasized.

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

Changes in current assets and current liabilities are reported on the statement of cash flows, using the indirect method, in the

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 Company used for payment of dividends during the year was

In preparing the statement of cash flows, the correct order of reporting cash activities is financing, operating, and investing.