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Exam 14: Statement of Cash Flows

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Question 51

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Excerpts from Neuwirth Corporation's comparative balance sheet appear below: Which of the following is the correct treatment within the operating activities section of the statement of cash flows using the indirect method?

A) The change in Accounts Receivable is added to net income; The change in Inventory is added to net income
B) The change in Accounts Receivable is added to net income; The change in Inventory is subtracted from net income
C) The change in Accounts Receivable is subtracted from net income; The change in Inventory is subtracted from net income
D) The change in Accounts Receivable is subtracted from net income; The change in Inventory is added to net income

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

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Question 52

Multiple Choice

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The following events occurred last year for the Cart Corporation: Based solely on the above information,the net cash provided by (used in) financing activities for the year on the statement of cash flows was:

A) $12,000
B) $24,000
C) $20,000
D) $49,000

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

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Question 53

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

The most recent balance sheet and income statement of Penaloza Corporation appear below: The company paid a cash dividend of $18. It did not dispose of any property, plant, and equipment. The company did not retire 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) operating activities for the year was:

Beltram Corporation's balance sheet and income statement appear below: The company did not dispose of any property,plant,and equipment,issue any bonds payable,or repurchase any of its own common stock during the year.The company declared and paid a cash dividend of $13. Required: Prepare a statement of cash flows in good form using the indirect method.

Klicker Corporation's most recent balance sheet appears below: The company's net income for the year was $152 and it did not issue any bonds or repurchase any of its common stock during the year.Cash dividends were $40.The net cash provided by (used in) financing activities for the year was:

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) financing activities for the year was:

Carriveau Corporation's most recent balance sheet appears below: Net income for the year was $172.Cash dividends were $35.The company did not sell or retire any property,plant,and equipment during the year.The net cash provided by (used in) operating activities for the year was:

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.

Which one of the following transactions should be classified as a financing activity on the statement of cash flows?

The direct method of preparing the statement of cash flows will show the same increase or decrease in cash as the indirect method.

Spackel Corporation recorded the following events last year: On the statement of cash flows, some of these events are classified as operating activities, some are classified as investing activities, and some are classified as financing activities. -Based solely on the information above,the net cash provided by (used in) investing activities on the statement of cash flows would be:

Megan Corporation's net income last year was $98,000. Changes in the company's balance sheet accounts for the year appear below: The company paid a cash dividend of $36,000 and it did not dispose of any long-term investments or property, plant, and equipment. The company 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) investing activities last year was:

Klutz Dance Studio had net income of $167,000 for the year just ended.Klutz collected the following additional information to prepare its statement of cash flows for the year: Klutz uses the indirect method to prepare its statement of cash flows.What is Klutz's net cash provided by (used in) operating activities?

Free cash flow will increase if a company increases its accounts payable balance by delaying payments to suppliers.

Paying interest to lenders is classified as an operating activity on the statement of cash flows.

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 statement of cash flows. -Which of the following is correct regarding the operating activities section of the statement of cash flows?

In a statement of cash flows,the sale of a long-term investment would ordinarily be classified as:

Cash payments to repay the principal amount of debt are reported as a cash outflow in the investing activities section of the statement of cash flows.

Under the indirect method of determining the net cash provided by operating activities on the statement of cash flows,an increase in accounts receivable would be subtracted from net income.