Exam 12: Reporting and Analyzing Cash Flows

When preparing a statement of cash flows using the indirect method, each of the following should be classified as an operating cash flow except:

Use the following information and the indirect method to calculate the net cash provided or used by operating activities:

Use the information provided to calculate the cash paid for insurance for the period.

The accountant for Mandarin Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available: What is the amount of cash dividends paid that should be reported in the financing section of the statement of cash flows?

What are the five usual steps involved in the preparation of the statement of cash flows?

The statement of cash flows reports and proves the net change in cash for a reporting period.

When using a spreadsheet to prepare the statement of cash flows, a decrease in accounts payable is entered in the Analysis of Changes columns with a debit in the statement of cash flows section and a credit in the balance sheet section.

Since it is recommended by the FASB, the direct method of preparing the statement of cash flows is most frequently used.

The gain or loss from retirement of debt is reported under cash flows from operating activities on the statement of cash flows using the direct method.

When preparing the operating activities section of the statement of cash flows using the indirect method, non-operating gains are added to net income.

A company purchased equipment for $150,000 by paying $50,000 and signing a $100,000 note payable. The entire transaction is disclosed to users in the financing section of the statement of cash flows.

Use the following information about the calendar-year cash flows of Park Company to prepare a statement of cash flows (direct method) and a schedule of noncash investing and financing activities.

The following selected account balances are taken from a merchandising company's records: (a) Calculate the cash payments made during 2017 for merchandise. Assume all of the company's accounts payable balances result from merchandise purchases. (b) Calculate the cash receipts from customer sales during 2017. (c) Calculate the cash payments for salaries during 2017.

Use the following financial statements and additional information to (1) prepare a complete statement of cash flows for the year ended December 31, 2013. The cash provided or used by operating activities should be reported using the direct method, and (2) compute the company's cash flow on total assets ratio for 2017. Additional Information: a. A $20,000 note payable is retired at its carrying value in exchange for cash. b. The only changes affecting retained earnings are net income and cash dividends paid. c. New equipment is acquired for $120,000 cash. d. Received cash for the sale of equipment that had cost $85,000, yielding a gain of $4,700. e. Prepaid expenses relate to Other Expenses on the income statement. f. All purchases and sales of merchandise inventory are on credit.

Conversion of preferred stock to common stock is disclosed in the financing section of the statement of cash flows.

The accountant for Glasgow Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available: What is the amount of cash dividends paid that should be reported in the financing section of the statement of cash flows?

An example of a transaction that must be disclosed as a noncash investing and financing activity includes all but which of the following?

Define the cash flow on total assets ratio and explain how it is used to evaluate cash flows and to assess company performance.

A company had net cash flows from operations of $341,000, net income of $286,000 and average total assets of $1,850,000. The cash flow on total assets ratio equals:

A company's income statement showed the following: net income, $134,000; depreciation expense, $30,000; and gain on sale of plant assets, $4,000. 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; prepaid expenses increased $6,200; accounts payable increased $3,400. Calculate the net cash provided or used by operating activities.