FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 11: Statement of Cash Flows

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 51

Multiple Choice

Review LaterAdd Note

Review Later

Shively Mfg. Co. sold land costing $10,000 for $12,000. Shively would report:

A) Operating cash inflows of $12,000.
B) Investing cash inflows of $12,000.
C) Financing cash inflows of $12,000.
D) Financing cash inflows of $2,000.

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

Correct Answer

verified

Show Answer

Question 52

Multiple Choice

Review LaterAdd Note

Review Later

The statement of cash flows reports cash flows from the activities of:

A) Operating, purchasing, and investing.
B) Borrowing, paying, and investing.
C) Operating, investing, and financing.
D) Using, investing, and financing.

E) None of the above
F) A) and B)

Correct Answer

verified

Show Answer

Question 53

True/False

Review LaterAdd Note

Under the indirect method, an increase in inventory is added to net income and a decrease in inventory is subtracted from net income to arrive at net cash flows from operating activities. We would subtract an increase in inventory and add a decrease in inventory to net income to arrive at net cash flows from operating activities under the indirect method.

We report interest paid on bonds or notes payable with operating activities rather than financing activities.

Portions of the financial statements for Horizon Telecom are provided below. Horizon Telecom Selected Balance Sheet Data December 31, 2012 $\begin{array}{lr}\text { Increase in accounts receivable } & \$ 6,000 \\\text { Increase in inventory } & 13,000 \\\text { Decrease in prepaid rent } & 9,000 \\\text { Increase in operating expenses payable } & 5,000 \\\text { Decrease in accounts payable } & 8,000 \\\text { Increase in income tax payable } & 20,000\end{array}$ Prepare the operating activities section of the statement of cash flows for Horizon Telecom using the indirect method.

Bad Brad's would report net cash inflows (outflows) from operating activities in the amount of:

Which of the following statements is true?

Cash flows from investing activities do not include cash flows from:

A statement of cash flows provides a summary of cash inflows and cash outflows during the reporting period.

The balance sheet of Tech Track reports total assets of $400,000 and $500,000 at the beginning and end of the year, respectively. Sales revenues are $1.1 million ($0.8 million in the previous year) , net income is $40,000, and net cash flows from operating activities are $50,000. How does Tech Track's cash flow to sales ratio compare to the industry average of 5%?

Assuming Net Income for the year is $115,000, what is the Operating Cash Flows given the following information: $\begin{array} { l r } \text { Increase in Salaries Payable } & \$ 15,000 \\\text { Depreciation Expense } & \$ 6,000 \\\text { Increase in Prepaid Rent } & \$ 24,000 \\\text { Loss on sale of asset } & \$ 1,000 \\\text { Increase in Accounts Payable } & \$ 25,000 \\\text { Increase in Inventory } & \$ 50,000\end{array}$

Income statement items that have no cash effect are still reported under the direct method. Income statement items that have no cash effect are simply not reported under the direct method.

Using the direct method, we examine each account in the income statement and convert it from an accrual amount to a cash amount.

We can find most financing activities by examining changes in long-term liabilities and stockholders' equity accounts.

Highland Park Homes reports net income of $300,000, and yet its net cash flow from operating activities is a negative $200,000 during the same period. Is this possible? Explain.

The purchase of land is classified in the statement of cash flows as a(n) :

The issuance of notes payable for borrowing is classified in the statement of cash flows as a(n) :

Analysis of an income statement, balance sheets, and additional information from the accounting records of Gaming Strategies reveal the following items: 1. Collection of notes receivable. 2. Purchase of equipment. 3. Exchange of long-term assets. 4. Decrease in accounts payable. 5. Payment of dividends. 6. Purchase of a patent. 7. Depreciation expense. 8. Decrease in accounts receivable. 9. Issuance of note payable. 10. Increase in inventory. Indicate in which section of the statement of cash flows each of these items would be reported: operating activities (indirect method), investing activities, financing activities, or noncash activities.

Classify each of the following items as an operating, investing, or financing activity. 1. Dividends paid. 2. Sale of goods or services for cash. 3. Sale of equipment. 4. Purchase of inventory. 5. Repayment of notes payable.

Nevada Boot Co. reported net income of $205,000 Beginning and ending Inventory balances were $40,000 and $45,000, respectively. Accounts Payable balances at the beginning and end of the year were $35,000 and $33,000, respectively. Assuming that all relevant information has been presented, Nevada Boot would report operating cash flows of: