Exam 16: Understanding Corporate Annual Reports: Basic Financial Statements

Indian Company has the following data available: Dividends of $10 were declared on December 1,2012.What is the net income for the year ended December 31,2012?

The sections of the statement of cash flows are listed below: Sections of Statement of Cash Flows O = Operating activities I = Investing activities F = Financing activities Required: For each of the following items,identify the section of the statement of cash flows you would find the item.Assume the direct method is used. ________ 1.Paid taxes of $15,000. ________ 2.Borrowed $35,000 from the bank on a long-term note payable. ________ 3.Collected $690,000 from customers. ________ 4.Received $40,000 in dividend income. ________ 5.Paid $12,000 to suppliers for inventory. ________ 6.Issued common stock for $170,000 cash. ________ 7.Purchased $120,000 in long-term securities for cash. ________ 8.Paid $18,000 dividend on common stock. ________ 9.Purchased land for $345,000 cash. ________ 10.Sold long-term securities for cash.No gain or loss on sale. ________ 11.Paid $210,000 on long-term debt. ________ 12.Received $31,000 cash on sale of equipment.No gain or loss on sale.

Which of the following is NOT a current liability?

Cash collections from customers are included in the ________ section of the statement of cash flows.Assume the direct method is used.

The cash paid for taxes is included in the ________ section of the statement of cash flows.Assume the direct method is used.

The cash received from the sale of investment securities is included in the ________ section of the statement of cash flows.

The statement of cash flows shows the financial position of an entity at a point in time.

________ summarizes the results of the basic operating activities of a company.

The indirect method of preparing the statement of cash flows is the most popular method in the United States.