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Exam 24: The Statement of Cash Flows

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Question 21

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A complete set of published financial statements for a corporation must include a statement of cash flows.

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B) False

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Question 22

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Additional information: Equipment costing $100,000 was sold for $70,000.Accumulated depreciation on this equipment was $20,000. Dividends of $38,000 were declared and paid. Bonds were issued at face value of $300,000. Common stock of $55,000 was issued to acquire land. Investments (stock in IBM)were purchased for $275,000. Using the information provided,prepare the cash flows from operating activities for The Dolmen Company.

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Question 23

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The purchase of treasury stock is treated as a cash outflow in the ____________________ activities section of the statement of cash flows.

Decreases in current assets must be deducted from net income to arrive at cash flows from operations.

On the statement of cash flows,cash and cash ____________________ consist of currency,bank accounts,and short-term,highly liquid investments.

If a firm's accounts receivable increased during the fiscal period,it is necessary to subtract the amount of the increase from the net income when computing the net cash provided by operating activities.

When a firm issues a long-term note payable,the amount that it receives for the note is considered a cash inflow from operating activities.

The payment of maturing bonds would be treated as a cash outflow in the ____________________ activities section of the statement of cash flows.

Additional information: Plant assets that originally cost $67,200 were sold for $56,400,resulting in a gain of $8,200. Dividends of $35,815 were declared and paid.There were no dividends declared in 2015. Using the information provided,prepare the cash flows from operating activities for The Kerfuffle Company using the indirect method.

In computing the cash flows from operating activities section,a loss on the sale of long-term assets must be deducted from net income.

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 list of sources and uses of cash are given below.Indicate on the line provided whether each is an (O)operating, (I)investing, (F)financing,or a significant (N)noncash financing and investing activity.

When the net cash provided by operating activities is determined,a gain on a sale of equipment should

Additional information: Equipment costing $100,000 was sold for $70,000.Accumulated depreciation on this equipment was $20,000. Dividends of $38,000 were declared and paid. Bonds were issued at face value of $300,000. Common stock of $55,000 was issued to acquire land. Investments (stock in IBM)were purchased for $275,000. Using the information provided,prepare the cash flows from financing activities for The Dolmen Company.

Windwhirl Company,reported net income of $150,000 and a $5,000 gain on the sale of equipment.The cash received from the sale of equipment was $22,000.Windwhirl issued additional shares of stock for $225,000,paid off a $200,000 bond issue recorded at par and paid out $40,000 in dividends during the year.Calculate the increase or decrease in cash from financing activities.

On a statement of cash flows,an increase in a prepaid expense

The net cash provided by operating activities is affected by

Cannon Manufacturing Co.sold equipment that cost $18,000 for $6,000.A loss on sale of $1,000 was recorded.How is the Cash Flows from Investing Activities affected?

When the net cash provided by operating activities is determined,the amortization of bond premium

List some examples of transactions or activities within a company that must be disclosed in the Statement of Cash Flows.