Exam 12: Reporting and Analyzing Cash Flows

Keita Co. reported net income of $213.4 million, net cash provided by operating activities of $151.3 million, total cash flows of $187.7 million, and average total assets of $2,314.8 million at the end of the year. Calculate the cash flow on total assets ratio for Keita.

Use the following company information to prepare a schedule of significant noncash investing and financing activities: (a) Sold a building with a book value of $300,000 for $225,000 cash and sold land with a book value of $40,000 for $65,000 cash. (b) Issued 15,000 shares of $10 par value common stock in exchange for equipment with a market value of $175,000. (c) Retired a $100,000, 8% bond by issuing another $100,000, 7% bond issue. (d) Acquired land by issuing a twenty-year, 5%, $73,000 note payable.

Use the following information to calculate cash paid for income taxes:

Of the following, which one affects cash during a period?

A machine with a cost of $130,000 and accumulated depreciation of $85,000 is sold for $50,000 cash. The amount that should be reported as a source of cash under cash flows from investing activities is:

A cash equivalent satisfies which of the following criteria?

___________________ activities include those transactions that affect long-term liabilities and equity.

Explain the purpose and format of the statement of cash flows. Also describe its relevance to decision makers.

If a company borrows money from a bank, the interest paid on this loan should be reported on the statement of cash flows as a(n):

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

In preparing Marjorie Company's statement of cash flows for the most recent year, the following information is available: Net cash flows from investing activities for the year were:

Use the following income statement and information about changes in noncash current assets and liabilities to (1) prepare only the cash flows from operating activities section of the statement of cash flows using the indirect method and (2) compute the company's cash flow on total assets ratio for the year assuming that average total assets are $525,250. Changes in current asset and current liability accounts for the year that relate to operations follow.

The following information is available for the Aarons Corporation: Additional information: (1) There was no gain or loss on the sales of the long-term investments, nor on the bonds retired. (2) Old equipment with an original cost of $37,550 was sold for $2,100 cash. (3) New equipment was purchased for $67,550 cash. (4) Cash dividends of $33,600 were paid. (5) Additional shares of stock were issued for cash. Prepare a complete statement of cash flows for calendar-year 2017 using the indirect method.

A cash coverage of growth ratio of less than 1 indicates cash inadequacy to meet asset growth.

When preparing a statement of cash flows using the indirect method, which of the following is correct?

Investing activities include: (a) the purchase and sale of long-term assets, (b) lending and collecting on notes receivable, and (c) the purchase and sale of short-term investments in the securities of other entities, other than cash equivalents and trading securities.

Based on Rowan, Inc.'s, income statement shown below and the other information provided, calculate the net cash provided by operations using the indirect method. Additional information:

Investments that are readily convertible to a known amount of cash and are sufficiently close to their maturity so that the market value is unaffected by interest rate changes are ______________________________.

Based on the information provided below for Krackle Corp., complete the following worksheet to be used to prepare the statement of cash flows using the indirect method. (a) Net income for the year was $30,000. (b) Dividends of $10,000 were declared and paid. (c) Krackle's only noncash expense was depreciation which totaled $50,000. (d) The company purchased plant assets for $70,000. (e) Notes payable in the amount of $40,000 were issued during the year for cash.

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