Exam 16: The Statement of Cash Flows

Which of the following sections of the statement of cash flows include activities that affect net income on the income statement?

Nevada Sales purchased some equipment for $12,000 by issuing a five-year note payable.This will appear in the non-cash investing and financing activities section of the statement of cash flows.

The payment of interest on a loan is considered a ________ on a statement of cash flows prepared using the direct method.

Financing activities on the statement of cash flows affect the long-term liability and equity accounts.

Diamond Corp.has provided the following information for the year ended December 31,2018. Additional information provided by the company includes the following: Equipment costing $60,000 was purchased for cash. Equipment with a net book value of $10,000 was sold for $16,000. Depreciation expense of $16,000 was recorded during the year. During 2018,the company repaid $43,000 of long-term notes payable. During 2018,the company borrowed $34,000 on a new long-term note payable. There were no stock retirements during the year. There were no sales of treasury stock during the year. All sales are on credit. Prepare the 2018 statement of cash flows,using the indirect method.

Lightning Electric Company uses the direct method to prepare its statement of cash flows.Lightning has reported operating expenses of $63,000 on its income statement for the year 2019.If the balance in accrued liabilities has increased by $6,000 during the year,then $6,000 needs to be added to $63,000 to calculate payments to suppliers for operating expenses.Accrued liabilities relate to operating expenses.

Optics Company uses the direct method for preparing its statement of cash flow.Optics reports the following information regarding 2019: From the income statement: Sales Revenues,$266,000 Cost of Goods Sold,$212,000 Operating Expenses,$37,000 Net Income $17,000 From the balance sheet: Assume that there were no sales of long-term assets,no interest revenue,and no expenses other than the expenses shown above.Also,assume that Accounts Payable are for purchases of merchandise inventory only.Accrued liabilities relate to operating expenses.What amount will be shown for the net cash provided by operating activities?

Which of the following items are included as an operating activity on the statement of cash flows,using the direct method?

Companies sometimes obtain financing and do not receive cash.Although such transactions do not directly involve cash,they still must be reported in the financing section of the statement of cash flows.

Identify how each of the following items is shown on the statement of cash flows.Identify each as operating (O),investing (I),financing (F),or non-cash investing and financing (N).

The only part that differs in a statement of cash flows prepared by the direct method from one prepared by the indirect method is the ________.

Atlanta Company sold equipment for cash.The income statement shows a gain on the sale of $1020.The net book value of the asset was $3810.Which of the following statements describes the cash effect of the transaction?

The direct method of reporting cash flows from operating activities provides clearer information about the sources and uses of cash than does the indirect method.

When preparing the statement of cash flows by the indirect method,it is necessary to adjust for non-cash expenses such as depreciation expense.

Dakota Telescopes Company uses the indirect method to prepare the statement of cash flows.Refer to the following income statement: Additional information provided by the company includes the following: Current assets other than cash decreased by $25,000. Current liabilities increased by $3,000. Prepare the operating activities section of the statement of cash flows.

Merchandise Inventory increased $28,000 and Accounts Payable decreased $19,600 during the year.Accounts Payable relates only to the acquisition of merchandise inventory.Sales were $796,000 and Cost of Goods Sold was $549,700.Compute the payment made to the suppliers for inventory.

Which of the following sections of the statement of cash flows include activities that increase and decrease long-term assets?

Which of the following sections of the statement of cash flows include activities that create revenue and expenses of the business?

Connecticut,Inc.uses the indirect method to prepare its statement of cash flows.Refer to the following portion of the comparative balance sheet: Additional information provided by the company includes the following: 1)Equipment was purchased for $69,000 with cash. 2)Equipment with a cost of $33,000 and accumulated depreciation of $7300 was sold for $46,000. What was the amount of net cash provided by (used for)investing activities?

A business's cash receipts and cash payments for a specific period are reported on a(n)________.