Question 1

Which of the following is disclosed separately in a statement of cash flows using the indirect method?

Accepted Answer

A)  Net income 
B)  Cash received from customers 
C)  Cash paid to employees and other suppliers 
D)  Increase in retained earnings for the period 
A)  Net income 
B)  Cash received from customers 
C)  Cash paid to employees and other suppliers 
D)  Increase in retained earnings for the period

Question 2

Cloud Industries acquired a $1,800,000 building by issuing a $1,800,000 note payable due to Square Bank.
a. In terms of cash flow reporting, what type of transaction is this?
b. What special disclosure is required for this transaction?

Accepted Answer

a. This is a noncash investing

Question 3

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 proceeds from the issuance of stock

Accepted Answer

A)  Op Out = Operating Cash Outflow 
B)  Op In = Operating Cash Inflow 
C)  Inv Out = Investing Cash Outflow 
D)  Inv In = Investing Cash Inflow 
E)  Fin Out = Financing Cash Outflow 
F) Fin In = Financing Cash Inflow 
A)  Op Out = Operating Cash Outflow 
B)  Op In = Operating Cash Inflow 
C)  Inv Out = Investing Cash Outflow 
D)  Inv In = Investing Cash Inflow 
E)  Fin Out = Financing Cash Outflow 
F) Fin In = Financing Cash Inflow

Question 4

Consider the following 2016 data for three manufacturing firms ($ in millions):
   a. Compute the operating cash flow to capital expenditures ratio for each firm for 2016.
b. Compute the free cash flow for each firm for 2016.
c. Comment on the results of your computations.

Accepted Answer

a. Molly: ($107,200) / $53,700 = (2.00)

Question 5

Brian Sports Co. had the following income statement for the current year:
   Additional information about the company follows:
   Calculate Brian Sports' net cash flow provided by operating activities for the current year using the direct method. Show a separate cash flow for each revenue and expense.

Accepted Answer

@#IMG-DLM& (a) $2,848,000 + $136,000 - $132,000 =

Question 6

A firm's cash flows from investing activities include:

Accepted Answer

A)  Cash received from the sale of a plant asset 
B)  Cash paid as dividends 
C)  Cash received from the rendering of services to customers 
D)  Cash paid to retire bonds payable 
A)  Cash received from the sale of a plant asset 
B)  Cash paid as dividends 
C)  Cash received from the rendering of services to customers 
D)  Cash paid to retire bonds payable

Question 7

Cash received from the sale of one of a company's warehouses is classified as a cash flow from investing activities in a statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 8

Rachel's Modeling School has an accrual basis net income of $128,000 and the following related items:
  What is Rachel's Modeling School's net cash flow from operating activities?

Accepted Answer

A)  $162,000 
B)  $252,000 
C)  $248,000 
D)  $150,000 
A)  $162,000 
B)  $252,000 
C)  $248,000 
D)  $150,000

Question 9

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 purchase of equipment

Accepted Answer

A)  Op Out = Operating Cash Outflow 
B)  Op In = Operating Cash Inflow 
C)  Inv Out = Investing Cash Outflow 
D)  Inv In = Investing Cash Inflow 
E)  Fin Out = Financing Cash Outflow F) Fin In = Financing Cash Inflow 
A)  Op Out = Operating Cash Outflow 
B)  Op In = Operating Cash Inflow 
C)  Inv Out = Investing Cash Outflow 
D)  Inv In = Investing Cash Inflow 
E)  Fin Out = Financing Cash Outflow F) Fin In = Financing Cash Inflow

Question 10

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 collection on loans

Accepted Answer

A)  Op Out = Operating Cash Outflow 
B)  Op In = Operating Cash Inflow 
C)  Inv Out = Investing Cash Outflow 
D)  Inv In = Investing Cash Inflow 
E)  Fin Out = Financing Cash Outflow F) Fin In = Financing Cash Inflow 
A)  Op Out = Operating Cash Outflow 
B)  Op In = Operating Cash Inflow 
C)  Inv Out = Investing Cash Outflow 
D)  Inv In = Investing Cash Inflow 
E)  Fin Out = Financing Cash Outflow F) Fin In = Financing Cash Inflow

Question 11

The statement of cash flows separates cash flows into operating, nonoperating, and investing categories.

Accepted Answer

A) True 
 B)False

Question 12

Sail Boats, Inc. provided the following information for 2016 and 2015:
   No new loans were taken out during 2016. Prepare the financing activities section of the statement of cash flows for 2016.

Accepted Answer

Dividends paid = Beginning retained earn

Question 13

With reference to the reporting of net cash flow from operating activities, which method do most companies use and why?

Accepted Answer

A)  Indirect method because it provides better information for decision making 
B)  Direct method because it is based on the accrual basis of accounting 
C)  Direct method because it requires a supplemental indirect method section 
D)  Indirect method because it is less expensive to prepare 
A)  Indirect method because it provides better information for decision making 
B)  Direct method because it is based on the accrual basis of accounting 
C)  Direct method because it requires a supplemental indirect method section 
D)  Indirect method because it is less expensive to prepare

Question 14

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 received

Accepted Answer

A)  Op Out = Operating Cash Outflow 
B)  Op In = Operating Cash Inflow 
C)  Inv Out = Investing Cash Outflow 
D)  Inv In = Investing Cash Inflow 
E)  Fin Out = Financing Cash Outflow F) Fin In = Financing Cash Inflow 
A)  Op Out = Operating Cash Outflow 
B)  Op In = Operating Cash Inflow 
C)  Inv Out = Investing Cash Outflow 
D)  Inv In = Investing Cash Inflow 
E)  Fin Out = Financing Cash Outflow F) Fin In = Financing Cash Inflow

Question 15

The following schedule of information relates to Atom Ant, LLC for the year 2016:
   The cash balance was $44,000 at the beginning of 2016.
In good form, prepare a 2016 statement of cash flows for Atom Ant, LLC using the indirect method.

Accepted Answer

The answer of The following schedule of information relates to...

Question 16

Put 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 flow.

Accepted Answer

The answer of Put an X in the appropriate column...

Question 17

Researchers have noted a reported growth in free cash flow over the past few years as company management, financial analysts, and investors are increasingly focusing on cash flows to validate reported earnings. Explain what is problematic about this and what might be responsible for this growth?

Accepted Answer

Unfortunately, the free cash flow calcul

Question 18

During 2016, Donald T. Duck, Inc. issued common stock for cash and borrowed $240,000 from the bank on a long-term loan. Donald T. Duck, Inc. provided the following:
   How much cash was received from issuing common stock?

Accepted Answer

Cash received for stock issuan

Question 19

Megan Industries uses the indirect method. Selected information appears below. How much is its net cash flow from operating activities?

Accepted Answer

The answer of Megan Industries uses the indirect method. Selected...

Question 20

The following schedule of cash receipts and payments relates to Design Elements for the year 2016:
   Design had $104,000 cash to start 2016 and ended the year with $288,000 cash. In good form, prepare a 2016 statement of cash flows for Design Elements using the direct method.

Accepted Answer

The answer of The following schedule of cash receipts and...

Which of the following is disclosed separately in a statement of cash flows using the indirect method?

Cloud Industries acquired a $1,800,000 building by issuing a $1,800,000 note payable due to Square Bank. a. In terms of cash flow reporting, what type of transaction is this? b. What special disclosure is required for this transaction?

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 proceeds from the issuance of stock

Consider the following 2016 data for three manufacturing firms ($ in millions): a. Compute the operating cash flow to capital expenditures ratio for each firm for 2016. b. Compute the free cash flow for each firm for 2016. c. Comment on the results of your computations.

Brian Sports Co. had the following income statement for the current year: Additional information about the company follows: Calculate Brian Sports' net cash flow provided by operating activities for the current year using the direct method. Show a separate cash flow for each revenue and expense.

A firm's cash flows from investing activities include:

Cash received from the sale of one of a company's warehouses is classified as a cash flow from investing activities in a statement of cash flows.

Rachel's Modeling School has an accrual basis net income of $128,000 and the following related items: What is Rachel's Modeling School's net cash flow from operating activities?

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 purchase of equipment

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 collection on loans

The statement of cash flows separates cash flows into operating, nonoperating, and investing categories.

Sail Boats, Inc. provided the following information for 2016 and 2015: No new loans were taken out during 2016. Prepare the financing activities section of the statement of cash flows for 2016.

With reference to the reporting of net cash flow from operating activities, which method do most companies use and why?

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 received

The following schedule of information relates to Atom Ant, LLC for the year 2016: The cash balance was $44,000 at the beginning of 2016. In good form, prepare a 2016 statement of cash flows for Atom Ant, LLC using the indirect method.

Put 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 flow.

Researchers have noted a reported growth in free cash flow over the past few years as company management, financial analysts, and investors are increasingly focusing on cash flows to validate reported earnings. Explain what is problematic about this and what might be responsible for this growth?

During 2016, Donald T. Duck, Inc. issued common stock for cash and borrowed $240,000 from the bank on a long-term loan. Donald T. Duck, Inc. provided the following: How much cash was received from issuing common stock?

Megan Industries uses the indirect method. Selected information appears below. How much is its net cash flow from operating activities?

The following schedule of cash receipts and payments relates to Design Elements for the year 2016: Design had $104,000 cash to start 2016 and ended the year with $288,000 cash. In good form, prepare a 2016 statement of cash flows for Design Elements using the direct method.

Introducing Financial Accounting

Constructing Financial Statements

Adjusting Accounts for Financial Statements

Analyzing and Interpreting Financial Statements

Reporting and Analyzing Revenues and Receivables

Reporting and Analyzing Inventory

Reporting and Analyzing Long-Term Operating Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Leases, Pensions, and Income Taxes

Reporting and Analyzing Stockholders Equity

Reporting and Analyzing Financial Investments

Appendix : Compound Interest and the Time-Value of Money

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Exam 4: Reporting and Analyzing Cash Flows

Which of the following is disclosed separately in a statement of cash flows using the indirect method?

Cloud Industries acquired a $1,800,000 building by issuing a $1,800,000 note payable due to Square Bank. a. In terms of cash flow reporting, what type of transaction is this? b. What special disclosure is required for this transaction?

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 proceeds from the issuance of stock

Consider the following 2016 data for three manufacturing firms ($ in millions): a. Compute the operating cash flow to capital expenditures ratio for each firm for 2016. b. Compute the free cash flow for each firm for 2016. c. Comment on the results of your computations.

Brian Sports Co. had the following income statement for the current year: Additional information about the company follows: Calculate Brian Sports' net cash flow provided by operating activities for the current year using the direct method. Show a separate cash flow for each revenue and expense.

A firm's cash flows from investing activities include:

Cash received from the sale of one of a company's warehouses is classified as a cash flow from investing activities in a statement of cash flows.

Rachel's Modeling School has an accrual basis net income of $128,000 and the following related items: What is Rachel's Modeling School's net cash flow from operating activities?

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 purchase of equipment

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 collection on loans

The statement of cash flows separates cash flows into operating, nonoperating, and investing categories.

Sail Boats, Inc. provided the following information for 2016 and 2015: No new loans were taken out during 2016. Prepare the financing activities section of the statement of cash flows for 2016.

With reference to the reporting of net cash flow from operating activities, which method do most companies use and why?

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 received

The following schedule of information relates to Atom Ant, LLC for the year 2016: The cash balance was $44,000 at the beginning of 2016. In good form, prepare a 2016 statement of cash flows for Atom Ant, LLC using the indirect method.

Put 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 flow.

Researchers have noted a reported growth in free cash flow over the past few years as company management, financial analysts, and investors are increasingly focusing on cash flows to validate reported earnings. Explain what is problematic about this and what might be responsible for this growth?

During 2016, Donald T. Duck, Inc. issued common stock for cash and borrowed $240,000 from the bank on a long-term loan. Donald T. Duck, Inc. provided the following: How much cash was received from issuing common stock?

Megan Industries uses the indirect method. Selected information appears below. How much is its net cash flow from operating activities?

The following schedule of cash receipts and payments relates to Design Elements for the year 2016: Design had $104,000 cash to start 2016 and ended the year with $288,000 cash. In good form, prepare a 2016 statement of cash flows for Design Elements using the direct method.

Introducing Financial Accounting

Constructing Financial Statements

Adjusting Accounts for Financial Statements

Analyzing and Interpreting Financial Statements

Reporting and Analyzing Revenues and Receivables

Reporting and Analyzing Inventory

Reporting and Analyzing Long-Term Operating Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Leases, Pensions, and Income Taxes

Reporting and Analyzing Stockholders Equity

Reporting and Analyzing Financial Investments

Appendix : Compound Interest and the Time-Value of Money

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