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 71

Multiple Choice

Review LaterAdd Note

Review Later

Cash flows from investing activities include:

A) Proceeds from the issuance of common stock.
B) Cash outflows from acquiring land.
C) Retirement of bonds payable.

D) B) and C)
E) All of the above

Correct Answer

verified

Show Answer

Question 72

True/False

Review LaterAdd Note

Review Later

When accounts payable decrease,cash paid to suppliers must have been more than purchases.

A) True
B) False

Correct Answer

verified

Show Answer

Question 73

Multiple Choice

Review LaterAdd Note

A company had the following cash flows for the year: (a) Purchased land,$60,000 (b) Borrowed from a local bank,$100,000 (c) Paid employee salaries,$50,000 (d) Issued common stock,$75,000 (e) Paid dividends,$20,000 (f) Sold equipment,$40,000 (g) Sold services to customers,$120,000 What amount would be reported for net financing cash flows on the Statement of Cash Flows?

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

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

If there are no current assets or liabilities associated with operating expenses,the amounts we report for these expenses in the income statement must equal the amount of cash we paid for these items.

Because depreciation expense reduces net income,companies will add depreciation expense back to net income as a step in arriving at net cash flows from operations under the indirect method.

Bad Brad's BBQ had cash flows for the year as follows ($ in millions) : Bad Brad's would report net cash inflows (outflows) from investing activities in the amount of: $\begin{array} { | l | r | } \hline \mathbf { CASH FECENED ~FROM: } & \\\hline \text { Customers } & \$ 1,800 \\\hline \text { Interest on irwestments } & 200 \\\hline \text { Sale of land } & 100 \\\hline \text { Sale of common stock } & 600 \\\hline \text { Issuance of debt securities } & 2,000 \\\hline \mathbf { CASH PAID~ FOR } & \\\hline \text { Interest on debt } & \$ 300 \\\hline \text { Income tax } & 80 \\\hline \text { Debt principal reduction } & 1,500 \\\hline \text { Purchase of equipment } & 4,000 \\\hline \text { Purchase of inventory } & 1,000 \\\hline \text { Diwidends on common stock } & 200 \\\hline \text { Operating expenses } & 500 \\\hline\end{array}$

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%?

Investing activities include cash transactions involving the purchase and sale of long-term assets and current investments.

Depreciation expense is not reported on the statement of cash flows under the direct method.

The indirect method begins with net income,while the direct method considers each of the individual accounts that make up net income.

We can identify operating activities from income statement information and changes in

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

In preparing a statement of cash flows under the indirect method,a decrease in accounts receivable would be reported or included as a(n) :

Under the indirect method,an increase in prepaid rent is added to net income to arrive at net cash flows from operating activities.We would subtract an increase in prepaid rent from net income to arrive at net cash flows from operating activities under the indirect method.

Given the items below,which of the following is an addition to net income to arrive at operating cash flows using the indirect method? I.Loss on sale of assets II) Increase in Supplies III) Increase in Accounts Payable IV) Increase in Accounts Receivable

Some cash flow ratios are derived by substituting net cash flows from operating activities in place of:

Under what section of the Statement of Cash Flows would you classify dividends paid on common stock?

The balance sheet of Computer World reports total assets of $350,000 and $450,000 at the beginning and end of the year,respectively.Sales revenues are $800,000,net income is $100,000,and net cash flows from operating activities are $150,000.What is Computer Worlds' cash return on assets?