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Exam 13: Differential Analysis: The Key to Decision Making

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Question 41

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Suggett Corporation's net cash provided by operating activities was $34;its income taxes were $12;its capital expenditures were $24;and its cash dividends were $7.The company's free cash flow was:

A) ($19)
B) $77
C) $3
D) $15

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

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Question 42

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Alcoser Corporation's most recent balance sheet appears below: Net income for the year was $60.Cash dividends were $12.The company did not dispose of any property,plant,and equipment.It did not issue any bonds payable or repurchase any of its own common stock.The following questions pertain to the company's statement of cash flows. The net cash provided by (used in) financing activities for the year was:

A) $10
B) $5
C) ($12)
D) $17

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

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Question 43

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Manila Corporation's comparative balance sheet appears below: The company's net income (loss)for the year was $0 and its cash dividends were $2,000.It did not dispose of any property,plant,and equipment,issue any bonds payable,or repurchase any of its own common stock during the year. Required: Compute the change in each balance sheet account denoted with an asterisk (*).Indicate whether the change in each balance will be recorded in the operating,investing,or financing activities section of the statement of cash flows.For items recorded in the operating activities section,also indicate whether the change will be added to or subtracted from net income.For all other items,indicate whether the change will be added as a cash inflow or subtracted as a cash outflow.The first entry has been filled in as an example.

Collecting the principal on a loan to another company would be reported on the investing activities section of the statement of cash flows.

Salsedo Corporation's balance sheet and income statement appear below: Cash dividends were $9.The company sold equipment for $15 that was originally purchased for $10 and that had accumulated depreciation of $5.It did not issue any bonds payable or repurchase any of its own common stock. The net cash provided by (used in) investing activities for the year was:

An increase in accounts receivable of $1,000 over the course of a year would be shown on the company's statement of cash flows prepared under the indirect method as:

The data given below are from the accounting records of the Kuhn Corporation: Based on this information,the net cash provided by operating activities using the indirect method would be:

Kaeser Corporation's most recent balance sheet appears below: The company's net income for the year was $52 and it did not sell or retire any property,plant,and equipment during the year.Cash dividends were $9.The net cash provided by (used in) investing activities for the year was:

Randal Corporation recorded the following activity for the year just ended: The net cash provided by (used in) investing activities for the year was:

Birchett Corporation's most recent balance sheet appears below: The company's net income for the year was $91 and it did not sell or retire any property,plant,and equipment during the year.Cash dividends were $22.The net cash provided by (used in) operating activities for the year was:

Money received from issuing bonds payable would be included as part of a company's financing activities on the statement of cash flows.

Free cash flow decreases when a company issues common stock for cash.

When computing the net cash provided by operating activities under the indirect method on the statement of cash flows,a decrease in common stock would be subtracted from net income.

In the statement of cash flows,collecting cash from customers is treated as a cash inflow in the financing activities section.

Negative free cash flow does not automatically signal poor performance.

Furis Corporation's cash and cash equivalents consist of cash and marketable securities.Last year the company's cash account decreased by $12,000 and its marketable securities account increased by $19,000.Cash provided by operating activities was $18,000.Net cash used in financing activities was $12,000.Based on this information,the net cash flow from investing activities on the statement of cash flows was:

An increase in the Inventory account of a company from $10,000 at the beginning of the year to $15,000 at the end of the year would be shown on the company's statement of cash flows prepared under the indirect method as:

The most recent comparative balance sheet of Giacomelli Corporation appears below: The company uses the indirect method to construct the operating activities section of its statements of cash flows. Which of the following is correct regarding the operating activities section of the statement of cash flows?

Majorn Auto Parts Store had net income of $81,000 for the year just ended.Majorn collected the following additional information to prepare its statement of cash flows for the year: Majorn uses the indirect method to prepare its statement of cash flows.What is Majorn's net cash provided (used) by operating activities?

Krech Corporation's comparative balance sheet appears below: The company's net income (loss) for the year was ($3,000) and its cash dividends were $3,000.It did not sell or retire any property,plant,and equipment during the year.The company uses the indirect method to determine the net cash provided by operating activities. The company's net cash provided by operating activities is: