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Exam 13: Statement of Cash Flows

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Question 1

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State the section(s) of the statement of cash flows prepared by the indirect method (operating activities, investing activities, financing activities, or not reported) and the amount that would be reported for each of the following transactions:

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Question 2

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The order of presentation of activities on the statement of cash flows is

A) operating, investing, and financing.
B) operating, financing, and investing.
C) financing, operating, and investing.
D) financing, investing, and operating.

E) B) and D)
F) A) and C)

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Question 3

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Balances of the current asset and current liability accounts at the end and beginning of the year are as follows:

Cost of merchandise sold reported on the income statement was $155,000. The accounts payable balance increased $5,000, and the inventory balance increased by $11,000 over the year. Determine the amount of cash paid for merchandise.

Sales reported on the income statement were $372,000. The accounts receivable balance declined $4,500 over the year. The amount of cash received from customers was $367,500.

The statement of cash flows is one of the basic financial statements.

Cash outflows from financing activities include the payment of cash dividends, the acquisition of treasury stock, and the repayment of amounts borrowed.

Fortune Corporation's comparative balance sheet for current assets and liabilities was as follows:

Net income for the year was $29,500. Accounts receivable increased $2,500, and accounts payable increased $5,400. Under the indirect method, the cash flow from operations is $32,400.

The board of directors declared cash dividends totaling $252,000 during the current year. The comparative balance sheet indicates dividends payable of $48,000 at the beginning of the year and $63,000 at the end of the year. What was the amount of cash payments to stockholders during the year?

The last item on the statement of cash flows prior to the schedule of noncash investing and financing activities reports

Free cash flow is

The following two problems are independent of one another.

Cash flows from investing activities, as part of the statement of cash flows, include receipts from the sale of land.

On the statement of cash flows prepared by the indirect method, a $50,000 gain on the sale of investments would be

If a business issued bonds payable in exchange for land, the transaction would be reported in a separate schedule on the statement of cash flows.

Cash dividends of $50,000 were declared during the year. Cash dividends payable were $10,000 and $5,000 at the beginning and end of the year, respectively. The amount of cash for the payment of dividends during the year is

On the statement of cash flows, the cash flows from investing activities section would include

Rogers Company reported net income of $35,000 for the year. During the year, accounts receivable increased by $7,000, accounts payable decreased by $3,000 and depreciation expense of $8,000 was recorded. Net cash provided by operating activities for the year is

Cash paid for preferred stock dividends should be shown on the statement of cash flows under