Exam 4: Reporting and Analyzing Cash Flows

The following amounts have been taken from the recent financial statements for Bright Star Industries: To the closest hundredth, which of the following amounts is Bright Star's operating cash flow to current liabilities ratio?

Becky Company uses the indirect method. Selected information appears below. How much is Becky's net cash flow from operating activities?

Construction Hats purchased equipment for $248,000 cash, sold equipment costing $144,000 with a book value of $88,000 at a loss, and declared dividends during 2016. No new notes payable were issued during the year. Financial data follows: Calculate cash flows from operations using the indirect method for 2016.

In which of the three activity categories of a statement of cash flows would each of the following items appear and do they represent a cash inflow or cash outflow? Use the following abbreviations: -Cash interest received

In which of the three activity categories of a statement of cash flows would each of the following items appear and do they represent a cash inflow or cash outflow? Use the following abbreviations: -Cash dividends paid

Little Kerry Inc. had a $64,000 net loss from operations in 2016. Depreciation expense for 2016 was $126,400 and a 2016 cash dividend of $144,000 was declared and paid. Balances of the current asset and current liability accounts at the beginning and end of 2016 follow. Did Little Kerry's 2016 operating activities provide or use cash and by what amount? Use the indirect method to determine your answer and show your work.

A company reported annual income tax expense of $328,000. During the year, income tax payable increased from a $24,800 beginning balance to a $35,200 ending balance. How much is cash paid for income taxes during the year?

You took a job as the new accountant for Pauline Company, a small company with significant overdrafts in a checking account. The previous accountant prepared the financial statements for last period and classified the overdrafts as a vendor accounts payable. He also reported the overdraft as a cash inflow in the operating section of the statement of cash flows. Briefly discuss the issues surrounding this treatment of the overdraft.

If accounts payable increase during an accounting period, then the cash paid for merchandise purchased is less than the merchandise purchases for the period.

The following amounts have been taken from the recent financial statements for Lumos Enterprises: Which of the following amounts is the free cash flow for Lumos Industries?

The following information relates to Kailey Company for 2016, in which the company reported a $264,000 net income. Calculate the 2016 net cash flow from operating activities using the indirect method.

The operating cash flow to capital expenditures ratio in excess of 1.0 means that the firms' current operating activities are providing cash in excess of the amount needed to provide the desired level of plant capacity.

Cash paid as dividends to stockholders is classified as a cash flow from investing activities in a statement of cash flows.

Information about noncash investing and financing activities must be disclosed in a schedule that is separate from the statement of cash flows.

Green St., Inc. reported the following amounts during 2016 and 2015: a. How much is the net increase or decrease in cash during 2016? b. How much will the company report on its balance sheet at December 31, 2016 as 'cash'?

If accounts receivable increase during an accounting period, then the cash received from customers is more than the sales revenue for the period.

The following account changes were presented in a recent balance sheet for Fred Company ($ in millions). Determine whether the amount of change would be added to (+) or subtracted from (‒) Fred's net income for the period when calculating cash flow from operations using the indirect method.

Write an X in the appropriate column to show whether each of the following cash flows should be classified as an operating, investing, or financing.

Cash received from customers for services rendered is classified as a cash flow from operating activities in a statement of cash flows.

A company reported annual sales revenue of $1,800,000. During the year, accounts receivable decreased from a $56,000 beginning balance to a $48,000 ending balance. Accounts payable decreased from a $44,000 beginning balance to a $32,000 ending balance. How much is cash received from customers for the year?