Use the following information and the indirect method to calculate the net cash provided or used by operating activities: $\begin{array}{|l|r|} \hline \text { Cash paid for purchase of plant assets } & \$ 15,000 \\ \hline \text { Decrease in interest payable } & 2,000 \\ \hline \text { Depreciation expense } & 30,000 \\ \hline \text { Gain on retirement of bonds } & 32,000 \\ \hline \text { Increase in accounts receivable } & 40,000 \\ \hline \text { Loss on sale of plant assets } & 5,000 \\ \hline \text { Net Income } & 76,000\\ \hline \end{array}$

A) $22,000 B) $117,000 C) $69,000 D) $37,000 E) $91,000 A) $22,000 B) $117,000 C) $69,000 D) $37,000 E) $91,000

Given the following information,determine the amount of cash flows from investing and financing activities. \[\begin{array} { | l | r | } \hline \text { Net income } & \$ 50,000 \\ \hline \text { Loss on sale of plant assets } & 15,000 \\ \hline \text { Cash received from sale of plant assets } & 26,000 \\ \hline \text { Cash received from issuine stock } & 70,000 \\ \hline \text { Increase in income taxes payable } & 120,000\\ \hline \end{array}\]

A) Cash provided by investing activities, $\$ 11,000$ Cash provided by financing activities, $\$ 70,000$ B) Cash used by investirg activities, $\$ 11,000$ Cash used by Financing activities, $\$ 70,000$ C) Cash provided by investirg activities, $\$ 26,000$ Cash provided by financing activities, $\$ 55,000$ D) Cash used by investing activities, $\$ 26,000$ Cash used by Financing activities, $\$ 55,000$ E) Cash provided by investing activities, $\$ 26,000$ Cash provided by financing activities, $\$ 70,000$ A) Cash provided by investing activities, $\$ 11,000$ Cash provided by financing activities, $\$ 70,000$ B) Cash used by investirg activities, $\$ 11,000$ Cash used by Financing activities, $\$ 70,000$ C) Cash provided by investirg activities, $\$ 26,000$ Cash provided by financing activities, $\$ 55,000$ D) Cash used by investing activities, $\$ 26,000$ Cash used by Financing activities, $\$ 55,000$ E) Cash provided by investing activities, $\$ 26,000$ Cash provided by financing activities, $\$ 70,000$

Exam 12: Reporting and Analyzing Cash Flows

Use the following information and the indirect method to calculate the net cash provided or used by operating activities: Cash paid for purchase of plant assets \ 15,000 Decrease in interest payable 2,000 Depreciation expense 30,000 Gain on retirement of bonds 32,000 Increase in accounts receivable 40,000 Loss on sale of plant assets 5,000 Net Income 76,000

(Multiple Choice)

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Question 61

Financing activities include receiving cash dividends from investments in other companies' stocks.

(True/False)

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Question 62

A company reported that its bonds with a par value of $50,000 and a carrying value of $57,000 are retired for $60,000 cash,resulting in a loss of $3,000.The amount to be reported under cash flows from financing activities is:

(Multiple Choice)

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Question 63

The statement of cash flows reports:

(Multiple Choice)

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Question 64

Terri's accounts receivable increased during the year by $5.9 million.It had a bad debt expense of $1.4 million,and its allowance for uncollectible accounts increased by $2.4 million.What is the summary journal entry needed for this transaction assuming Terri had sales of $45.0 million?

(Essay)

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Question 65

Martin,Inc.'s,income statement is shown below.Based on this income statement and the other information provided,calculate the net cash provided by operations using the indirect method. $Martin,Inc.'s,income statement is shown below.Based on this income statement and the other information provided,calculate the net cash provided by operations using the indirect method. Additional information: \begin{array}{|l|r|} \hline \text { Increase in accounts receivable } & \$ 4,000 \\ \hline \text { Increase in accounts payable } & 16,000 \\ \hline \text { Increase in income taxes payable } & 300 \\ \hline \text { Decrease in prepaid expenses } & 10,000 \\ \hline \text { Decrease in merchandise inventory } & 14,000 \\ \hline \text { Decrease in long-term notes payable } & 20,000\\ \hline \end{array}$ Additional information: Increase in accounts receivable \ 4,000 Increase in accounts payable 16,000 Increase in income taxes payable 300 Decrease in prepaid expenses 10,000 Decrease in merchandise inventory 14,000 Decrease in long-term notes payable 20,000

(Essay)

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Question 66

Spirit Company,a merchandiser,recently completed its 2010 calendar year.For the year, (1)all sales are credit sales, (2)all credits to Accounts Receivable reflect cash receipts from customers, (3)all purchases of inventory are on credit, (4)all debits to Accounts Payable reflect cash payments for inventory,and (5)Other Expenses are paid in advance and are initially debited to Prepaid Expenses.The company's balance sheet and income statement follow: $Spirit Company,a merchandiser,recently completed its 2010 calendar year.For the year, (1)all sales are credit sales, (2)all credits to Accounts Receivable reflect cash receipts from customers, (3)all purchases of inventory are on credit, (4)all debits to Accounts Payable reflect cash payments for inventory,and (5)Other Expenses are paid in advance and are initially debited to Prepaid Expenses.The company's balance sheet and income statement follow: Additional Information on Year 2010 Transactions a. The loss on the cash sale of equipment was \$ 5,875 (details in b ). b. Sold equipment costing \$ 46,500 , for a loss of \$ 5,875 . c. Purchased equipment costing \$ 99,000 by paying \$ 35,000 cash and signing a long-term note payable for the balance. d. Borrowed \$ 2,000 cash by signing a short-term note payable. e. Paid \$ 47,500 cash to reduce the long-term notes payable. f. Issued 2,400 shares of common stock for \$ 20 cash per share. g. Net income and dividends were the only items that affected retained earnings. What is the net cash flows provided (used)by financing activities?$ $Spirit Company,a merchandiser,recently completed its 2010 calendar year.For the year, (1)all sales are credit sales, (2)all credits to Accounts Receivable reflect cash receipts from customers, (3)all purchases of inventory are on credit, (4)all debits to Accounts Payable reflect cash payments for inventory,and (5)Other Expenses are paid in advance and are initially debited to Prepaid Expenses.The company's balance sheet and income statement follow: Additional Information on Year 2010 Transactions a. The loss on the cash sale of equipment was \$ 5,875 (details in b ). b. Sold equipment costing \$ 46,500 , for a loss of \$ 5,875 . c. Purchased equipment costing \$ 99,000 by paying \$ 35,000 cash and signing a long-term note payable for the balance. d. Borrowed \$ 2,000 cash by signing a short-term note payable. e. Paid \$ 47,500 cash to reduce the long-term notes payable. f. Issued 2,400 shares of common stock for \$ 20 cash per share. g. Net income and dividends were the only items that affected retained earnings. What is the net cash flows provided (used)by financing activities?$ Additional Information on Year 2010 Transactions a. The loss on the cash sale of equipment was $\$ 5,875$ (details in $b$ ). b. Sold equipment costing $\$ 46,500$ , for a loss of $\$ 5,875$ . c. Purchased equipment costing $\$ 99,000$ by paying $\$ 35,000$ cash and signing a long-term note payable for the balance. d. Borrowed $\$ 2,000$ cash by signing a short-term note payable. e. Paid $\$ 47,500$ cash to reduce the long-term notes payable. f. Issued 2,400 shares of common stock for $\$ 20$ cash per share. g. Net income and dividends were the only items that affected retained earnings. What is the net cash flows provided (used)by financing activities?

(Multiple Choice)

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Question 67

A spreadsheet can help organize the information needed to prepare a statement of cash flows.

(True/False)

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Question 68

Activities that involve the production or purchase of merchandise and the sale of goods and services to customers,including expenditures related to administering the business,are classified as:

(Multiple Choice)

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Question 69

Wessen Company reports net income of $180,000 for the year ended December 31,2010.It also reports $45,800 depreciation expense,$21,410 amortization expense and a $15,000 gain on the sale of machinery.Its comparative balance sheets reveal a $28,300 increase in accounts receivable,$20,400 decrease in accounts payable,$10,470 increase in prepaid expenses,and $33,140 decrease in wages payable.What is the net cash flows provided (used)by operating activities using the indirect method?

(Multiple Choice)

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Question 70

Given the following information,determine the amount of cash flows from investing and financing activities. Net income \ 50,000 Loss on sale of plant assets 15,000 Cash received from sale of plant assets 26,000 Cash received from issuine stock 70,000 Increase in income taxes payable 120,000

(Multiple Choice)

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Question 71

Use the cash flow on total assets ratio to determine which of these three companies is using its assets most efficiently.

(Multiple Choice)

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Question 72

Accounting standards require that the statement of cash flows be included in a complete set of financial statements.

(True/False)

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Question 73

The statement of cash flows explains the difference between the beginning and ending balances of cash and cash equivalents.

(True/False)

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Question 74

The reporting of investing and financing activities is _________________ under the direct and indirect methods of preparing the statement of cash flows.

(Short Answer)

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Question 75

Most managers stress the importance of understanding and predicting cash flows for business decisions.

(True/False)

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Question 76

The full disclosure principle requires that noncash investing and financing activities be disclosed as part of the statement of cash flows.

(True/False)

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Question 77

When using the indirect method to calculate and report net cash provided or used by operating activities,which of the following is subtracted from net income?

(Multiple Choice)

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Question 78

A company's income statement showed the following: net income,$124,000; depreciation expense,$30,000 and gain on sale of plant assets,$14,000.An examination of the company's current assets and current liabilities showed the following changes as a result of operating activities: accounts receivable decreased $9,400; merchandise inventory increased $18,000; prepaid expenses decreased $6,200; accounts payable increased $3,400.Calculate the net cash provided or used by operating activities.

(Multiple Choice)

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Question 79

Match each definition with its term

A calculation of the net cash provided (used) by operating activities that lists the major items of operating cash receipts and then subtracts the major items of operating cash payments

Indirect method

A financial statement that reports the cash inflows and cash outflows for an accounting period and classifies those cash flows as operating, investing or financing activities

Statement of cash flows

Activities that involve the production or purchase of merchandise and the sale of goods or services to customers, including expenditures related to administering the business

Direct method

Correct Answer:

Verified

A calculation of the net cash provided (used) by operating activities that lists the major items of operating cash receipts and then subtracts the major items of operating cash payments

A financial statement that reports the cash inflows and cash outflows for an accounting period and classifies those cash flows as operating, investing or financing activities

Activities that involve the production or purchase of merchandise and the sale of goods or services to customers, including expenditures related to administering the business

Transactions with a company's owners and creditors that include obtaining cash from issuing debt and repaying the amounts borrowed and obtaining cash from or distributing cash to owners

A calculation that reports net income and then adjusts the net income amount by adding and subtracting items that are necessary to yield net cash provided (used) by operating activities

Transactions that include making and collecting notes receivable or purchasing and selling plant assets or investments in other than cash equivalents and trading securities

(Matching)

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Question 80

Showing 61 - 80 of 183

Financing activities include receiving cash dividends from investments in other companies' stocks.

A company reported that its bonds with a par value of $50,000 and a carrying value of $57,000 are retired for $60,000 cash,resulting in a loss of $3,000.The amount to be reported under cash flows from financing activities is:

The statement of cash flows reports:

Terri's accounts receivable increased during the year by $5.9 million.It had a bad debt expense of $1.4 million,and its allowance for uncollectible accounts increased by $2.4 million.What is the summary journal entry needed for this transaction assuming Terri had sales of $45.0 million?

A spreadsheet can help organize the information needed to prepare a statement of cash flows.

Activities that involve the production or purchase of merchandise and the sale of goods and services to customers,including expenditures related to administering the business,are classified as:

Given the following information,determine the amount of cash flows from investing and financing activities. Net income \ 50,000 Loss on sale of plant assets 15,000 Cash received from sale of plant assets 26,000 Cash received from issuine stock 70,000 Increase in income taxes payable 120,000

Use the cash flow on total assets ratio to determine which of these three companies is using its assets most efficiently.

Accounting standards require that the statement of cash flows be included in a complete set of financial statements.

The statement of cash flows explains the difference between the beginning and ending balances of cash and cash equivalents.

The reporting of investing and financing activities is _________________ under the direct and indirect methods of preparing the statement of cash flows.

Most managers stress the importance of understanding and predicting cash flows for business decisions.

The full disclosure principle requires that noncash investing and financing activities be disclosed as part of the statement of cash flows.

When using the indirect method to calculate and report net cash provided or used by operating activities,which of the following is subtracted from net income?

Introducing Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Analyzing and Interpreting Financial Statements

Investments and International Operations

Reporting and Analyzing Partnerships

Reporting and Preparing Special Journals

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