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Exam 24: The Statement of Cash Flows

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Question 1

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The Natural Company's Statement of Cash Flows would report Cash Flows from Operating Activities totaling:

A) $252,000.
B) $286,000.
C) $368,000.
D) $470,000.

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

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Question 2

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A corporation received $80,000 in cash when it sold common stock and used the proceeds to pay $60,000 in bonds payable. As a result, the statement of cash flows would report

A) $20,000 as the net cash used in financing activities.
B) $20,000 as the net cash provided by investing activities.
C) $20,000 as the net cash used in investing activities.
D) $20,000 as the net cash provided by financing activities.

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

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Question 3

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Transactions for the acquisition or disposal of long-term assets are

An example of a financing activity is

The Financial Accounting Standards Board prefers the indirect method of preparing the statement of cash flows.

The Natural Company's Statement of Cash Flows would report Cash Flows from Financing Activities totaling:

On a statement of cash flows, depreciation expense is

The following transactions occurred at the Lionel Corporation in 2013. Use this information to prepare Lionel's schedule of cash flows from investing activities. A) The company sold a used truck for $4,000 in cash. The original cost of the truck was $19,000. Depreciation of $14,000 had been deducted. B) The company purchased some new equipment for $25,000.

The starting point for analyzing cash flows from operating activities is the beginning balance of cash.

A list of sources and uses of cash are given below. Indicate on the line provided whether each is an operating, investing, or financing activity. ________ (a) purchase of land ________ (b) repayment of bond indebtedness ________ (c) sale of merchandise ________ (d) pay salaries and wages ________ (e) pay interest expense ________ (f) sale of office equipment ________ (g) dividends paid ________ (h) resale of Treasury Stock ________ (i) borrowing through a note payable ________ (j) dividend income

Doff Manufacturing Co. sold equipment that cost $12,000 for $3,000. Depreciation of $10,000 had been taken on the equipment. How is the Cash Flows from Operating Activities affected?

Transactions that provide cash to the business to carry on its activities are

Bastion Corporation paid $15,600 on its mortgage loan. The principal portion was $5,000 and the interest was $10,600. The $5,000 constitutes what on the Statement of Cash Flows?

Generally, if a short-term investment is to be classified as a cash equivalent, it must fall due within

The Other Income and Other Expense sections of an Income Statement are shown below. In preparing the Cash Flows from Operating Activities section of the statement of Cash Flows using the indirect method, indicate how each item would be handled. (Assume all line items involved cash.)

On the statement of cash flows, it is necessary to reconcile the ____________________ with the net cash provided by operating activities.

Why is the Statement of Cash Flows important?

Usually, there is a difference between the net income reported on the income statement and the net cash from operating activities shown on the statement of cash flows.

Chattel Company sold for $5,000 equipment that originally cost $40,000 and had depreciation in the amount of $34,000 taken. What amount is reported in the Cash Flows from Operating Activities section of the Statement of Cash Flows?

Eleemosynary Organization acquired land valued at $56,000 for 4,200 shares of its stock. Where on the Statement of Cash flows does this transaction activity appear?