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Exam 21: The Statement of Cash Flows

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Question 51

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Do the statement of cash flows and its related disclosure note report only transactions that cause an increase or decrease in cash? Explain.

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A statement of cash flows reports transa...

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Question 52

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What activities are included in the statement of cash flows under the section entitled "Cash flows from financing activities"?

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Question 53

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Determine the amount of cash received from customers for each of the four independent situations below.

Which of the following is reported as a financing activity in the statement of cash flows?

Explain why Brothers Corporation subtracts equity income from its net income in its measurement of operating cash flows.

What method (direct or indirect) does Henchman & Co. use to present its Statement of Cash Flows? Explain how you can tell.

Selected information from Peridot Corporation's accounting records and financial statements for 2009 is as follows ($ in millions) : In its statement of cash flows, Peridot should report net cash outflows from investing activities of:

Payments to acquire bonds of other corporations should be classified on a statement of cash flows as:

The purchase of treasury stock is:

Partial balance sheets and additional information are listed below for Funk Company. Additional information for 2009: Net income was $170,000. Depreciation expense was $30,000. Sales totaled $800,000. Cost of goods sold totaled $325,000. Required: Calculate the amount of cash received from customers during 2009. Funk Company Partial Balance Sheets as of December 31 $\begin{array} { l r r } \text { Assets } & \mathbf { 2 0 0 9 } & \mathbf { 2 0 0 8 } \\ \text { Cash } & \$ 40,000 & \$ 20,000 \\ \text { Accounts receivable } & 94,000 & 90,000 \\ \text { Inventory } & 25,000 & 40,000 \\ \text { Liabilities } & & \\ \text { Accounts payable } & \$ 58,000 & \$ 72,000 \end{array}$

Bowers Corporation reported the following ($ in 000s) for the year: Sales on account were $1,900 and bad debt expense was $18 for the year. How much cash was collected from customers on account?

In determining cash flows from operating activities (indirect method) , adjustments to net income should not include:

Following are the income statement and some additional information for Carolina Consulting Company. All sales were on credit and accounts receivable decreased by $900 this year compared to last year. Merchandise purchases were on credit with a decrease in accounts payable of $700 during the year. Ending inventory was $500 larger than beginning inventory. Income taxes payable increased $300 during the year. All operating expenses were paid for in cash. Required: Prepare the cash flows from operating activities section of the statement of cash flows using the direct method.

The purchase of treasury stock is an investing cash outflow.

A loss on the sale of machinery should be reported in the statement of cash flows as:

All of the following may qualify as cash equivalents except:

Hemmer Company reported net income for 2009 in the amount of $40,000. The company's financial statements also included the following: What is net cash provided by operating activities?

How is the amortization of patents reported in a statement of cash flows that is prepared using the direct method?

Following are the income statement and some additional information for Parson Corporation for 2009. All sales were on credit and accounts receivable increased by $600 this year compared to last year. Merchandise purchases were on credit with an increase in accounts payable of $400 during the year. Ending inventory was $500 larger than beginning inventory. Income taxes payable increased $300 during the year. All operating expenses were paid for in cash. Required: Prepare the cash flows from operating activities section of the statement of cash flows using the indirect method. Parson Corporation Income Statement For the Year Ended December 31, 2009 Net sales Cost of goods sold Gross margin $\begin{array} { l r c } \text { Operating expenses } & \$ 2,000 & \\ \text { Depreciation expense } & 900 & ( 2,900 ) \\ \text { Income before taxes } & & 5,600 \\ \text { Income taxes } & & ( 1,600 ) \\ \text { Net income } & \$ 4,000 \end{array}$

Which of the following does not represent a cash flow relating to operating activities?