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Exam 21: The Statement of Cash Flows Revisited

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Question 1

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In a statement of cash flows using the indirect method, an increase in available-for-sale securities due to an increase in their fair value should be reported as:

A) A deduction from net income in determining cash flows from operating activities.
B) An addition to net income in determining cash flows from operating activities.
C) An investing activity.
D) Not reporteD.The unrealized gain increased other comprehensive income, not net income, and is not a cash flow.

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

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Question 2

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When one enters a $50,000 credit entry to the Land account in a spreadsheet for the statement of cash flows, it represents a negative change in that account and probably is due to selling such assets.

A) True
B) False

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Question 3

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Companies may report interest received and dividends received as investing activities using:

Interest payments to creditors are reported in a statement of cash flows as:

What was most responsible for the negative cash flow from financing activities during 2011? What amount was paid?

Which of the following is reported as an investing activity in the statement of cash flows?

When treasury stock is sold at an amount less than its cost, the sale is classified as:

Which of the following is reported as a financing activity in the statement of cash flows?

What are the general guidelines for an investment to be considered a cash equivalent?

When preparing a statement of cash flows using the direct method, accrual of payroll expense is:

A firm reported salary expense of $239,000 for the current year. The beginning and ending balances in salaries payable were $40,000 and $15,000, respectively. What was the amount of cash paid for salaries?

Property dividends distributed are reported in connection with a statement of cash flows as:

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

Partial balance sheets and additional information are listed below for Monaco Company. Additional information for 2013: Net income was $270,000. Depreciation expense was $30,000. Sales totaled $800,000. Cost of goods sold totaled $305,000. Required: Calculate the amount of cash paid to merchandise suppliers during 2013.

What activities are included in the statement of cash flows under the section titled "Cash flows from financing activities"?

Alpha Company had the following account balances for 2013: Alpha reported net income of $210,000 for 2013. Assuming no other changes in current account balances, what is the amount of net cash provided by operating activities for 2013 reported in the statement of cash flows?

A company reported interest expense of $540,000 for the year. Interest payable was $35,000 and $75,000 at the beginning and the end of the year, respectively. What was the amount of interest paid?

S Company reported net income for 2013 in the amount of $400,000. The company's financial statements also included the following: What is net cash provided by operating activities under the indirect method?

Hogan Company had the following account balances for 2013: Hogan reported net income of $300,000 for 2013. Assuming no other changes in current account balances, what is the amount of net cash provided by operating activities for 2013 reported in the statement of cash flows?

Selected information from Peridot Corporation's accounting records and financial statements for 2013 is as follows ($ in millions) : In its statement of cash flows, Peridot should report net cash outflows from investing activities of: