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Exam 21: The Statement of Cash Flows Revisited

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Question 31

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

A) The amortization of a patent.
B) The exchange of common stock for a building.
C) The acquisition of long-term investments.
D) The repayment of bonds issued at face value.

E) All of the above
F) B) and D)

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Question 32

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Partial balance sheets and additional information are listed below for Funk Company. Additional information for 2013: Net income was $170,000. Depreciation expense was $30,000. Sales totaled $800,000. Cost of goods sold totaled $325,000. Required: Calculate the amount of cash received from customers during 2013.

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Question 33

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Cash equivalents generally would not include short-term investments in:

Which type of activity (operating, investing, financing) was most responsible for the cash flow experienced by Henchman & Co. during 2012?

Of the following, which is not an investing activity?

In its 2013 income statement, WME reported a $40,000 loss on the sale of equipment. In its reconciliation schedule, WME should:

Acquiring land with a long-term note is:

Which of the following would not be a cash inflow from financing activities?

The Murdock Corporation reported the following balance sheet data for 2013 and 2012: Additional information for 2013: (1.) Sold available-for-sale securities costing $69,500 for $74,000. (2.) Equipment costing $20,000 with a book value of $5,000 was sold for $6,000. (3.) Issued 6% bonds payable at face value, $200,000. (4.) Purchased new equipment for $145,000 cash. (5.) Paid cash dividends of $20,000. (6.) Net income was $50,000. Required: Prepare a statement of cash flows for 2013 in good form using the indirect method for cash flows from operating activities.

Dooling Corporation reported balances in the following accounts for the current year: Cost of goods sold was $7,500. What was the amount of cash paid to suppliers?

In a statement of cash flows in which operating activities are reported by the direct method, which of the following would increase reported cash flows from operating activities?

In its 2013 income statement, WME reported $11,000 of interest expense on its outstanding bonds. During the year, WME paid its regular installments of $9,000 of interest in cash. In its reconciliation schedule, WME should:

A 10% stock dividend is reported in connection with a statement of cash flows as:

Determine the amount of cash received from customers for each of the two independent situations below.

Why is the statement of cash flows required as part of the set of external financial statements?

Listed below are the reporting classifications for a statement of cash flows using the direct method for reporting operating cash flows. Indicate the reporting classification that would apply to each of the five transactions described below by placing the number of the reporting classification in the space provided by each transaction.

Which of the following is not required by generally accepted accounting principles?

The accounting records of Harrison Company provided the data below. Required: Prepare a reconciliation of net income to net cash flows from operating activities.

Red Manufacturing Company owns 40% of the outstanding common stock of Blue Supply Company. During 2013, Red received a $50 million cash dividend from Blue. What effect did this dividend have on Red's 2013 statement of cash flows?

(a.) What is the most significant change in operating cash outflow activity in 2012 relative to 2011? (b.) What balance sheet accounts would likely have changed during 2012 in relation to the cash flow change that you identify in (a)?