Exam 12: Reporting and Interpreting the Statement of Cash Flows

Complete the last two columns in the following table by indicating whether each transaction would be reported: Part a.In the operating (O),investing (I),or financing (F)activities section of the statement of cash flows or if the transaction would be reported instead as a noncash investing and/or financing transaction (Noncash). Part b.As a cash inflow (+)or a cash outflow (-)on the statement of ash flows.(Leave this cell blank if you entered "Noncash" for part a.)

Identify whether each of the following list of items is an operating activity cash flow (O),an investing activity cash flow (I),a financing activity cash flow (F),or none of these (None). 1._____ Proceeds from sale of equipment 2._____ Cash collected from customers 3._____ Payments to suppliers 4._____ Stock repurchases 5._____ Repayment of bond principal 6._____ Payment of income tax 7._____ Purchases of bonds from other companies 8._____ Purchases of equipment financed with a note 9._____ Interest and cash dividends received 10._____ Payment of cash dividends

When preparing the statement of cash flow using the indirect method,Depreciation Expense is:

Which of the following would be included in cash flows from investing activities?

Depreciation is added back to net income in a statement of cash flows prepared using the indirect method because it:

Assume a company uses the direct method to prepare its statement of cash flows.If the company's inventory and accounts payable both increase during the accounting period,how would these changes affect cash flow calculations?

Which of the following items would be reported on a statement of cash flows using the indirect method,but not on a statement prepared using the direct method?

Which of the statements below is correct when comparing the direct and indirect methods of reporting operating cash flows?

Which of the following is the best measure of a company's profitability?

Cash provided by issuing stock to owners should be reported as cash:

The reporting of financing activities is identical under the indirect and direct methods for the statement of cash flows on the statement of cash flows.

To determine net cash provided by or used in financing activities,one must analyze the:

A company's cash flows from investing activities include cash transactions relating to the purchase and disposal of which types of assets?

If Insurance Expense is $7,000 and the beginning and ending balances of Prepaid Insurance are $1,500 and $2,000,respectively,the cash paid for insurance is:

The T-account approach:

What is the starting point for calculating cash flows from operations when the indirect method is used?

Flynn Corporation had the following cash flows for the current year.The company uses the direct method in preparing the statement of cash flows. -Use the information above to answer the following question.What is the net cash flows provided by (used in)financing activities?

Use the information above to answer the question below.The company uses the indirect method in preparing the statement of cash flows.What is the amount of depreciation expense that will be reported in the operating activities section of the statement?

Which of the following statements best describes the reason Depreciation Expense is added to net income when preparing the statement of cash flows?

An outdoor water park that has a calendar year-end and is located in an area of the country that has warmer weather during April through September and colder weather during the rest of the year is likely to have: