The statement of cash flows reports



The statement of cash flows reports ________.

cash flows from operating activities

total assets

total changes in stockholders' equity

changes in retained earnings

2. Which of the following does not represent an outflow of cash and therefore would not be reported on the statement of cash flows as a use of cash?

purchase of noncurrent assets

purchase of treasury stock

discarding an asset that had been fully depreciated

payment of cash dividends

The last item on the statement of cash flows prior to the schedule of noncash investing and financing activities reports ________.       

the increase or decrease in cash

        cash at the end of the year

        net cash flow from investing activities

        net cash flow from financing activities

4. Cash paid for equipment would be reported in the statement of cash flows in ________.

        the cash flows from operating activities section

        the cash flows from financing activities section

        the cash flows from investing activities section

        a separate schedule

5. If accounts payable have increased during a period ________.

        revenues on an accrual basis are less than revenues on a cash basis

        expenses on an accrual basis are less than expenses on a cash basis

        expenses on an accrual basis are the same as expenses on a cash basis

        expenses on an accrual basis are greater than expenses on a cash basis

6. Income tax was $400,000 for the year. Income tax payable was $30,000 and $40,000 at the beginning and end of the year. Cash payments for income tax reported on the cash flow statement using the direct method is _______.

        $400,000

        $390,000

        $430,000

        $440,000

= $400,000 + $30,000 - $40,000

 

= $390,000

7. The cost of merchandise sold during the year was $50,000. Merchandise inventories were $12,500 and $10,500 at the beginning and end of the year, respectively. Accounts payable were $6,000 and $5,000 at the beginning and end of the year, respectively. Using the direct method of reporting cash flows from operating activities, cash payments for merchandise total _________.

        $49,000

        $47,000

        $51,000

        $53,000

Decrease in Inventory = $12,500 - $10,500 = $2,000

 

Decrease in Accounts Payable = $6,000 - $5,000 = $1,000

 

= $50,000 - $2,000

 

= $48,000

 

Add: Decrease in Accounts Payable $1,000

 

Cash payment for merchandise = $49,000

8. Identify whether each of the following would be reported as an operating, investing, or financing activity in the statement of cash flow.

A)Issuance of bonds payable Financing

B)Collection of accounts receivable Operating

C)Purchase of investments Investing

D)Disposal of equipment Investing

E)Payment for selling expenses Operating

F)Cash sales                                   Operating

what is the answer to Disposal of equipment?

        Financing

        Operating

        Investing

        None of the above

9. Zale corp accumulated depreciation-equipment increased by 8,000, while patents decreased by 5,200 between balance sheet dates. There were no purchases or sales of depreciable or intangible assets during the year. In addition, the income statement showed a loss of 6,000 from the sale of investments. Reconcile a net income of 90,000 to net cash flow from operating activities. what is the net cash flow from operating activities?

        $90,000

        $108,000

        $109,200

        $98,000

= $90,000 + $8,000 + $5,200 + $6,000

= $109,200

10. Sage Corporation's comparative balance sheet for current assets and liabilities was as follows:

Dec 31, 2008Dec 31, 2007

Accounts receivable$ 12,000$ 14,000

Inventory 9,0006,500

Accounts payable8,5007,200

Dividends payable24,00026,000

what is the net cash flow from operating activities?

        $110,800

        $113,300

        $110,000

        $115,800

= ($14,000 - $12,000) – ($9,000 - $6,500) + ($8,500 - $7,200) –($26,000 - $24,000)

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