Exam 12: Reporting and Analyzing Cash Flows

Managers only use the cash flow statement to evaluate the net cash increase or decrease, and do not pay much attention to the details of cash flows from operating activities, cash flows from investing activities, and cash flows from financing activities.

An increase in the accounts receivable account during the year should be reported on the statement of cash flows as:

The direct method of reporting operating cash flows:

Northington, Inc. is preparing the company's statement of cash flows for the fiscal year just ended. Using the following information, determine the amount of cash flows from operating activities using the indirect method:

Depreciation expense is not reported on a statement of cash flows prepared under the direct method.

Define and explain significant noncash investing and financing activities and the method of reporting them on the statement of cash flows.

A company's income statement showed the following: net income, $124,000 and depreciation expense, $30,000. 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; and accounts payable increased $3,400. Calculate the net cash provided or used by operating activities.

The statement of cash flows reports all but which of the following?

A statement of cash flows explains the differences between the beginning and ending balances of:

In preparing a company's statement of cash flows for the most recent year using the indirect method, the following information is available: Net cash provided by operating activities was:

Financing activities include: (a) the purchase and sale of long-term assets, (b) the purchase and sale of short-term investments, and (c) lending and collecting on loans.

A company's Inventory balance at 12/31/17 was $188,000 and $200,000 at 12/31/16. Its Accounts Payable balance at 12/31/17 was $84,000 and $80,000 at 12/31/16, and its cost of goods sold for 2017 was $720,000. The company's total amount of cash payments for merchandise in 2017 equals:

Mercury Company reports depreciation expense of $40,000 for Year 2. Also, equipment costing $150,000 was sold for its book value in Year 2. The following selected information is available for Mercury Company from its comparative balance sheet. Compute the cash received from the sale of the equipment.

For each of the following separate cases, use the information provided to calculate the missing cash inflow or cash outflow using the direct method.

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:

Stormer Company reports the following amounts on its statement of cash flow: Net cash provided by operating activities was $28,000; net cash used in investing activities was $10,000 and net cash used in financing activities was $12,000. If the beginning cash balance is $5,000, what is the ending cash balance?

The statement of cash flows reports:

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

A machine with a cost of $130,000, accumulated depreciation of $85,000, and current year depreciation expense of $17,000 is sold for $40,000 cash. The amount that should be reported as a source of cash under cash flows from investing activities is:

In preparing a company's statement of cash flows for the most recent year using the indirect method, the following information is available: Net cash provided by operating activities was: