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Exam 12: Statement of Cash Flows

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Question 31

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On January 1,Year 2,the balance of Jacobs Corporation's Accounts Receivable was $40,000.Sales on account for Year 2 amounted to $320,000 and the ending balance of Accounts Receivable was $64,000.What is the amount of cash collected from customers?

A) $296,000
B) $256,000
C) $344,000
D) $360,000

E) C) and D)
F) B) and C)

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Question 32

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Which section of the statement of cash flows is prepared using either the direct or indirect method?

A) Operating activities
B) Investing activities
C) Financing activities
D) All of these answer choices are correct

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

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Question 33

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When using the indirect method to complete the cash flows from operating activities section of the statement of cash flows,what is the proper disposition of a loss on disposal of equipment?

The final or bottom line on the statement of cash flows is the net increase or decrease in cash for the period.

The amount of revenue a company recognizes on the income statement normally differs from the amount of cash collected from customers.

Statler Corporation has beginning and ending accounts payable balances of $400 and $800,respectively.Inventory had beginning and ending balances of $700 and $600,respectively.If cost of goods sold was $2,800,how much cash was spent to purchase inventory?

During Year 1,Mallard Company earned $165,000 of sales revenue on account and accrued $122,500 of operating expenses.The company also earned $26,400 of service revenue that had previously been recorded as unearned revenue.In addition,a $2,200 stock dividend was issued to the stockholders.What can be said about cash flows considering these transactions?

What effect does depreciation expense have on net income and cash flows? Net Income $\quad$$\quad$$\quad$$\quad$ Cash Flows

[The following information applies to the questions displayed below.] During Year 1, El Paso Company had the following changes in account balances: . The Accumulated Depreciation account had a beginning balance of $25,000 and an ending balance of $35,000. The increase was due to depreciation expense. . The Long-Term Notes Payable account had a beginning balance of $40,000 and an ending balance of $15,000. The decrease was due to repayment of debt. . The Equipment Account had a beginning balance of $25,000 and an ending balance of $92,500. The increase was due to the purchase of other operational assets. . The Long-Term Investments Account (Marketable Securities) had a beginning balance of $18,000 and an ending balance of $12,500. The decrease was due to the sale of investments at cost. . The Dividends Payable account had a beginning balance of $12,000 and an ending balance of $10,000. There were $20,000 of dividends declared during the period. . The Interest Payable account had a beginning balance of $2,250 and an ending balance of $1,250. The difference was due to the payment of interest. -What is the net cash flow from investing activities?

The following information is for Cleveland Company: Additional data for the current year: (1) Sales on account for the period were $80,000. (2) Operating expenses for the period were $52,000. Based on this limited information,what was the net cash inflow from operating activities?

Mercury Company rents out a portion of its office space to another company.At the beginning of the year,the balance in the Unearned Rent Revenue account was $3,400.During the year,Mercury recognized $16,600 of rent revenue.If the ending balance of Unearned Rent Revenue is $2,600,how much cash was received from the tenant for rent during the year?

The amount of increase in accounts receivable is added to credit sales to calculate the amount of cash inflow from customers when using the direct method to prepare the operating activities section of the statement of cash flows.

In preparing the statement of cash flows by the indirect method,increases in noncash current assets are subtracted from net income.

[The following information applies to the questions displayed below.] On August 1, Year 1, Jackson Company issued a one-year $80,000 face value interest-bearing note with a stated interest rate of 9% to Galaxy Bank. Jackson accrues interest expense on December 31, Year 1, its calendar year-end. -What is the cash flow from financing activities that will be reported during the year ending December 31,Year 1?

On the statement of cash flows,cash receipts from interest and dividends are classified as investing activities.

Investing activities on the statement of cash flows always involve long-term assets,including marketable securities.

Which of the following cash transactions is not classified as an operating activity?

Which of the following statements best explains the correct handling of depreciation on the statement of cash flows when using the indirect method?

Under the indirect method,which of the following items would be added to net income to determine the cash flow from operating activities?

Phillips Co.reported total credit sales of $460,000 for Year 2.Its accounts receivable totaled $70,000 and $100,000 at the beginning and end of the year,respectively.What was the cash collected from customers during Year 2?