Exam 21: The Statement of Cash Flows Revisited

Prepare the summary entries necessary to determine the amount of cash paid to suppliers for each of the four independent situations below. Situation Cost of goods sold Inventory incr. (decr.) Account payable incr. (decr.) Cash paid to suppliers 1 400,000 6,000 0 2 400,000 0 7,000 3 100,000 6,000 7,000 4 100,000 (6,000) (7,000)

Which of the following is always reported as an outflow of cash?

Which of the following is reported as an investing activity in the statement of cash flows?

When preparing a statement of cash flows using the direct method, accrual of payroll expense is:

How is the amortization of patents reported in a statement of cash flows that is prepared using the indirect method?

Listed below are the reporting classifications for a statement of cash flows using the direct method for reporting operating cash flows. Match the reporting classifications with the transactions described below. -Operating cash inflow

In its 2018 Annual Report to Shareholders, Sisters Corporation included the following information on cash flows from operations: -Explain why Sisters Corporation subtracts equity income from its net income in its measurement of cash flows.

Partial balance sheets and additional information are listed below for Funk Company. Funk Company Partial Balance Sheets as of December 31 Assets 2018 2017 Cash \ 40,000 \ 20,000 Accounts receivable 94,000 90,000 Inventory 25,000 40,000 Accounts payable \ 58,000 \ 72,000 Additional information for 2018: Net income was $170,000. Depreciation expense was $30,000. Sales totaled $800,000. Cost of goods sold totaled $325,000. Required: Prepare the summary entry for the amount of cash received from customers during 2018.

Why are "cash equivalents" included as part of cash in the statement of cash flows?

If the direct method is used to report cash flows from operating activities in the body of the statement of cash flows, a reconciliation of net income to net cash flows from operating activities also is required.

Like U.S. GAAP, International Financial Reporting Standards (IFRS) also require a statement of cash flows. Consistent with U.S. GAAP, cash flows are classified as operating, investing, or financing activities. However, with regard to interest and dividend inflows and outflows, the international standard for cash flow statements:

In determining cash flows from operating activities (indirect method), adjustments to net income should not include:

Cost of goods sold as reported in the income statement will be less than cash paid to suppliers if:

Listed below are the reporting classifications for a statement of cash flows using the direct method for reporting operating cash flows. Match the reporting classifications with the transactions described below. -Investing cash outflow

Hugh Morris Comics sold for $110,000 cash a 3D printer that cost $334,000 with accumulated depreciation of $221,000. This transaction would be reported as:

In a statement of cash flows using the indirect method, an increase in the available-for-sale debt securities account not due to an increase in fair value should be reported as:

Which of the following would be an example of an investing activity on a statement of cash flows?

Cash paid to suppliers under the direct method is computed as:

Creditors and investors would generally find the statement of cash flows least useful for assessing the:

Using the direct method, cash received from customers is calculated as sales: