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Exam 13: Statement of Cash Flows

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Question 31

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Which of the following would be a financing activities cash flow?

A) Common stock dividends distributed.
B) Interest payments.
C) Repurchase of treasury shares.
D) Purchase of a building by signing a note payable.

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

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Question 32

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Sagaworth Inc.reported the following information: $\begin{array}{lr}\text {2011 Income Statement:} \\\text { Net loss } & \$ 380,000 \\\text { Depreciation expense } & 150,000 \\\text { Amortization expense } & 25,000\end{array}$ $\begin{array}{lrr}\text {Balance Sheet: } \\& 2011 & 2010\\\text { Accounts receivable } & \$ 200,000 & \$ 230,000 \\\text { Inventory } & 140,000 & 160,000 \\\text { Prepaid expenses } & 40,000 & 30,000 \\\text { Accounts payable } & 190,000 & 180,000 \\\text { Accrued liabilities } & 50,000 & 45,000 \\\text { Taxes payable } & 10,000 & 20,000\end{array}$ Determine Sagaworth's net cash flow from operating activities for 2011 under the indirect method.

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Question 33

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The quality of income ratio measures the portion of net income that generated cash flow from operating activities.

During 2010,Edna Enterprises had a capital acquisitions ratio of 7.9.During 2010,Carlos' Corporation had a capital acquisitions ratio of 3.6.The amount of cash flow from operations was $5,968,000 for Edna's and $5,054,000 for Carlos.Which of the following statements is incorrect?

Atkins Corporation has provided the following information for the year ended December 31,2010: The equipment account balance increased $200,000. The equipment accumulated depreciation account increased $35,000. Equipment costing $50,000 was sold during the year resulting in a $10,000 gain. Depreciation expense on the equipment recorded during the year was $65,000. Which of the following statements is incorrect with respect to preparation of the statement of cash flows? Assume that the equipment purchase and sale resulted in cash flows.

If sales revenue was $1,800,000 and accounts receivable decreased $40,000 while unearned revenue increased $10,000 during the year,then cash collected from customers equals $1,850,000.

Bold Company's 2010 income statement reported total sales revenue of $250,000.During 2010,accounts receivable decreased by $20,000 and accounts payable increased $10,000.How much cash was collected from customers during 2010?

Atkins Corporation has provided the following information for the year ended December 31,2010: The equipment account balance increased $200,000. The equipment accumulated depreciation account increased $35,000. Equipment costing $50,000 was sold during the year resulting in a $10,000 gain. Depreciation expense on the equipment recorded during the year was $65,000. How much was the investing activities cash inflow from the sale of the equipment? Assume that the equipment purchase and sale resulted in cash flows.

Which of the following transactions would not be reported as a cash flow from investing activities?

Which statement regarding the indirect method is false?

During 2010,Tommy's Toys reported the following: Long-term debt repayments,$503 million; interest paid,$143 million; proceeds from exercise of stock options,$27 million,and issue of common stock in exchange for land costing $10 million.How much is the 2010 net cash flow from financing activities?

A higher quality of income ratio implies that operations tend to be more self-supporting.

A company's 2010 income statement reported total sales revenue of $1,200,000; accounts receivable increased by $25,000 and the unearned revenue account decreased $15,000 during 2010.How much cash was collected from customers during 2010?

Which of the following is reported as a cash flow from investing activities?

Flow Company has provided the following information for the year ended December 31,2010: Cash paid for interest,$20,000; Cash paid for dividends,$6,000; Cash dividends received,$4,000; Cash proceeds from bank loan,$29,000; Cash purchase of treasury stock,$11,000; Cash paid for equipment purchase,$27,000; Cash received from common stock sale,$37,000; Cash received from sale of land with a $32,000 book value,$25,000; Acquisition of land costing $51,000 in exchange for preferred stock issuance. Paid a $100,000 note payable by exchanging used machinery with a $77,000 book value. How much was Flow's net cash flow from financing activities?

Canadian Beer reported they sold equipment for $222 million cash and purchased $1,515 million of new equipment using cash.The equipment sold had a net book value of $150 million.Cash flow from investing activities would show

Amanda Company reported income tax expense of $250,000.Beginning income taxes payable was $30,000,while ending income taxes payable was $25,000,and accounts payable decreased $10,000.How much cash was paid for taxes?

RM Company,a manufacturer,has provided the following information pertaining to its recent year of operation: Net income,$300,000; Accounts payable increased $24,000; Prepaid rent decreased $10,000; Depreciation expense was $35,000; Accounts receivable increased $34,000; Gain on sale of a building was $11,000; Wages payable decreased $21,000; Unearned revenue increased $44,000. How much was RM's net cash inflow from operating activities?

Which of the following would be added to net income when determining cash flows from operating activities under the indirect method?

Non-cash financing and investing activities