Exam 12: Reporting and Analyzing Cash Flows

Fernwood Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available: The ending balance in retained earnings is:

The FASB requires a reconciliation of net income to net cash provided or used by operating activities when the ______________ method is used.

An investment that is readily convertible to a known amount of cash and that is sufficiently close to its maturity date so that its market value is unaffected by interest rate changes is a(n):

IFRS permits classification of cash inflows from interest revenue and dividend revenue under either the ___________________ activities section of the statement of cash flows, provided that this classification is consistently applied.

The cash flow on total assets ratio reflects actual cash flows and is therefore affected by income recognition and measurement.

Explain the value of separating cash flows into operating activities, investing activities, and financing activities to financial statement users in analyzing cash flows and the company's financial performance and condition.

Faster Freight Co. reported net cash provided by operating activities of $142.7 million and average total assets of $1,762.5 million at the end of the year. Calculate the cash flow on total assets ratio for Faster Freight.

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 financing activities:

When preparing the operating activities section of the statement of cash flows using the indirect method, expenses with no cash outflows are added back to net income.

When analyzing the changes on a spreadsheet used to prepare a statement of cash flows, the cash flows from investing activities generally affect:

A company reported net income of $318,000, operating cash flows of $218,000, total cash flows of $184,000, and average total assets of $898,000. Calculate its cash flow on total assets ratio.

Common uses of the statement of cash flows include all but which of the following?

The accountant for Crusoe Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available: What is the ending balance for retained earnings?

The FASB requires a reconciliation of net income to net cash provided or used by operating activities when the direct method is used (which can be reported in the notes).

The purpose of the statement of cash flows is to report cash receipts (inflows) and cash payments (outflows) during a period.

Use the following calendar-year information to prepare Adam Company's statement of cash flows using the direct method.

The cash flow on total assets ratio is computed by dividing _____________ by ____________.

Alvez Company reports net income of $305,000 for the year ended December 31. It also reports $93,700 depreciation expense and a $10,000 loss on the sale of equipment. Its comparative balance sheet reveals a $40,200 increase in accounts receivable, a $10,200 decrease in prepaid expenses, a $15,200 increase in accounts payable, a $12,500 decrease in wages payable, and a $100,000 decrease in notes payable. Calculate the cash provided (used) in operating activities using the indirect method.

The appropriate section in the statement of cash flows for reporting the cash payment of wages is:

Explain how the cash flows from operating activities section of the statement of cash flows is prepared using the indirect method.