Match between columns Premises: Sold equipment for cash. Sold merchandise to a customer for cash. Purchased treasury stock. Paid employee salaries. Paid for a three-year insurance policy. Purchased merchandise inventory on account. Purchased land and a building. Paid a dividend. Sold a temporary investment in marketable securities. Issued common stock in return for land.

The Answer of an investing activity (I), and a financing is...

Given the following selected information,prepare a schedule showing net cash flows from operating activities for the year ended July 31,2010 using the direct format: \[\begin{array} { l r r } \text { Accourts Receivable } & \frac { \text { July } 31,2010 } { } & \text { July 31,2009 } \\ \text { Irventory } & 32,000 & \$ 39,000 \\ \text { Prepaid Insurarnce } & 145,000 & 127,000 \\ \text { Accourts Payable } & 9,000 & 5,000 \\ \text { Wages Payble } & 21,000 & 26,000 \\ \text { Sales } & 13,000 & 11,000 \\ \text { Cost of Goods Sold } & 382,000 & \\ \text { Irsurarce Experse } & 237,000 \\ \text { Wages Expense } & 16,000 \\ \text { Irterest Experse } & 74,000 \\ \text { Dividend Reverue } & 8,000 & \\ & 25,000 & \end{array}\]

Cash received from customers $ 389,000 (

Exam 19: Company Performance: Cash Flows

Create the operating section of the statement of cash flows (indirect method). RLV Inc. Income Statement For the Year Ending Dec. 31,2010 Sales 250,000 Cost of Goods Sold Gross Margin 200,000 All Other Items: Salaries Expense (100,000 Depreciation Expense (25,000 Gain on Sale of Equipment Net Income RLVIIC. Balarice Sheet - Partial Staternent Dec. 31, 2010 $2010 \quad 2009$ Cash $10,000 \quad 3,000$ Accounts Receivable $20.000 \quad 15.000$ Inventory 9,000 13,000 Accounts Payable 13.000 2,000

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Question 1

Correct Answer:

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Rl.V Inc.
Staternert of Cash Flows
For the Year Ending Dec. 31,2010
Net Cash Flows fram OperatingActivities:
Net Income $\$ 85,000$
Adjustments to reconcile to operating cash flows
$\begin{array}{lr}\text { Depreciation Expense } & \$ 25,000 \\\text { Increase in Accounts Receivable } & \$ 5,000 \\\text { Decrease in Inventory } & \$ 4,000 \\\text { Increase in Accounts Payable } & \$ 11,000 \\\text { Gain on Equipment Sale } & \$ 10,000 \\\quad \text { Net Cash Flows from Operating Activities } & \$ 110,000\end{array}$

Create the operating section of the statement of cash flows (indirect method). Book Inc. Balarice Sheet - Partial Statement Dec. 31,2010

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Question 2

Correct Answer:

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Book Ir1c.
Staternert of Cash Flows
For the Year Erding Dec. 31,2010

$\text { Net Cash Flows from Operating Activities: }$
$Book Ir1c. Staternert of Cash Flows For the Year Erding Dec. 31,2010 \text { Net Cash Flows from Operating Activities: }$

On a statement of cash flows using the indirect format,amortization of the premium on investments in bonds is:

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Question 3

Correct Answer:

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C

Cash flows for financing activities do not include

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Question 4

Using the indirect method (statement of cash flows),a gain would:

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Question 5

The purchase of treasury stock is reported on the statement of cash flows in the

(Multiple Choice)

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Question 6

On a statement of cash flows using the indirect format,a decrease in unearned revenue is:

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Question 7

Identify each of the following transactions as an

Sold equipment for cash.

an investing activity (I),

Sold merchandise to a customer for cash.

a financing activity (F),

Purchased treasury stock.

operating activity (O)

Correct Answer:

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Sold equipment for cash.

Sold merchandise to a customer for cash.

Purchased treasury stock.

Paid employee salaries.

Paid for a three-year insurance policy.

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Question 8

On a statement of cash flows using the indirect format,depreciation expense is:

(Multiple Choice)

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Question 9

Which of the following is true about the direct method of determining cash from operations?

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Question 10

Explain how depreciation is handled under the direct and indirect methods of reporting cash flow from operating activities.Why is it treated this way?

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Question 11

Interest revenue for the current year was $4,500 more than cash collected for interest.This difference is most likely due to a(n):

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Question 12

Match the following classifications on the statement of cash flows with the events listed below.Unless otherwise indicated,assume payments made or received are for cash.

Purchased Available-for-Sale Securities

Not on cash flow statement.

Purchased Land by issuing a long-term note payable.

Financing

Paid a cash dividend.

Operating

Correct Answer:

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Purchased Available-for-Sale Securities

Purchased Land by issuing a long-term note payable.

Paid a cash dividend.

Paid utilities.

Borrowed money after signing a 5 year note payable

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Question 13

Using the indirect method (statement of cash flows),an increase in current assets would:

(Multiple Choice)

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Question 14

The proceeds from the issuance of common stock would be reported in the following section of the statement of cash flows:

(Multiple Choice)

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Question 15

Given the following selected information,prepare a schedule showing net cash flows from operating activities for the year ended July 31,2010 using the direct format: Accourts Receivable July 31,2009 Irventory 32,000 \ 39,000 Prepaid Insurarnce 145,000 127,000 Accourts Payable 9,000 5,000 Wages Payble 21,000 26,000 Sales 13,000 11,000 Cost of Goods Sold 382,000 Irsurarce Experse 237,000 Wages Expense 16,000 Irterest Experse 74,000 Dividend Reverue 8,000 25,000

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Question 16

Since the statement of cash flows is so useful,why doesn't FASB substitute it for the income statement?

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Question 17

Using the indirect method (statement of cash flows),a decrease in current assets would:

(Multiple Choice)

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Question 18

Which of the following is subtracted from net income in computing cash flows from operating activities using the indirect method?

(Multiple Choice)

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Question 19

Using the indirect method (statement of cash flows),a gain from the sale of equipment would:

(Multiple Choice)

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Question 20

Create the operating section of the statement of cash flows (indirect method). Book Inc. Balarice Sheet - Partial Statement Dec. 31,2010

On a statement of cash flows using the indirect format,amortization of the premium on investments in bonds is:

Cash flows for financing activities do not include

Using the indirect method (statement of cash flows),a gain would:

The purchase of treasury stock is reported on the statement of cash flows in the

On a statement of cash flows using the indirect format,a decrease in unearned revenue is:

On a statement of cash flows using the indirect format,depreciation expense is:

Which of the following is true about the direct method of determining cash from operations?

Explain how depreciation is handled under the direct and indirect methods of reporting cash flow from operating activities.Why is it treated this way?

Interest revenue for the current year was $4,500 more than cash collected for interest.This difference is most likely due to a(n):

Using the indirect method (statement of cash flows),an increase in current assets would:

The proceeds from the issuance of common stock would be reported in the following section of the statement of cash flows:

Since the statement of cash flows is so useful,why doesn't FASB substitute it for the income statement?

Using the indirect method (statement of cash flows),a decrease in current assets would:

Which of the following is subtracted from net income in computing cash flows from operating activities using the indirect method?

Using the indirect method (statement of cash flows),a gain from the sale of equipment would:

Accounting and Business

Business Processes and Accounting Information

Operating Processes: Planning and Control

Short-Term Decision Making

Strategic Planning Regarding Operating Processes

Planning, The Balanced Scorecard, and Budgeting

Accounting Information Systems

Purchasinghuman Resourcespayment Process: Recording and Evaluating Expenditure Process Activities

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