Exam 12: Reporting and Analyzing Cash Flows

In preparing a company's statement of cash flows for the most recent year, the following information is available: Net cash flows from financing activities for the year were:

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:

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

Which of the following transactions or events should be reported as a source of cash from operating activities when using the direct method?

Use the information provided to calculate the missing cash paid for merchandise for the period.

Equipment costing $100,000 with accumulated depreciation of $40,000 is sold at a loss of $10,000. This implies that $40,000 cash was received from the sale.

The following information is available for the Brookstone Company: Additional information: (1) There was no gain or loss on the sales of the long-term investments, nor on the bonds retired. (2) Old machinery with an original cost of $45,060 was sold for $2,520 cash. (3) New machinery was purchased for $81,060 cash. (4) Cash dividends of $40,320 were paid. (5) Additional shares of stock were issued for cash. Prepare a complete statement of cash flows for calendar-year 2013 using the indirect method.

All of the following statements related to reporting cash flows from operating activities under U.S. GAAP and IFRS are true except:

The direct method for computing and reporting net cash flows from operating activities involves adjusting the net income figure to obtain net cash provided or used by operating activities.

A company had net cash flows from operations of $120,000, cash flows from financing of $330,000, total cash flows of $500,000, and average total assets of $2,500,000. The cash flow on total assets ratio equals:

Explain how cash flows from investing and financing activities are determined.

Use the following company information to calculate net cash provided or used by investing activities: (a) Equipment with a book value of $185,000 and an original cost of $300,000 was sold for $167,000. (b) Paid $52,000 cash for a new delivery van. (c) Purchased land costing $37,500, paid in cash. (d) Purchased treasury stock for $61,000 cash. (e) Long-term investments in stock with a cost of $46,500 are sold for $42,000 cash.

The indirect method separately lists each major item of operating cash receipts and cash payments.

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

A main purpose of the statement of cash flows is to report all the major cash ________ and cash _______________.

A company's transactions with its creditors to borrow money and/or to repay the principal amounts of both short- and long-term debt are reported as cash flows from:

Bagrov Corporation had a net decrease in cash of $10,000 for the current year. Net cash used in investing activities was $52,000 and net cash used in financing activities was $38,000. What amount of cash was provided (used) in operating activities?

Explain the use of a spreadsheet in the preparation of the statement of cash flows.

The cash flow on total assets ratio:

All of the following statements related to preparation of the statement of cash flows under U.S. GAAP and IFRS are true except: