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Exam 12: The Statement of Cash Flows

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Question 81

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A __________,is a useful device to help in the preparation of a statement of cash flows.

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Question 82

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Under the __________,a company reports its major classes of gross cash receipts and cash payments in the Operating Activities section of the statement of cash flows.

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Question 83

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Some companies use a work sheet approach,which functions like the T account approach,as a tool to aid in preparing the statement of cash flows.

The following items were reported on the balance sheets and income statement for Bezos Corp.: $\begin{array}{lr}\text { Accounts payable, December } 31,2017 & \$ 42,000 \\\text { Accounts payable, December } 31,2018 & 48,000 \\\text { Operating expenses } & 286,000\end{array}$ How would the change in accounts payable be reported in the Operating Activities section of the statement of cash flows under the indirect method?

If the December 31,2017,balance of accounts payable is higher than the January 1,2017,balance,then the amount of cash payments will exceed the purchases on account for the year.

Which of the following statements is false regarding how the cash flow effects of the changes in the Equipment and Accumulated Depreciation accounts would be reported on a statement of cash flows if the indirect method is used to prepare the Operating Activities section?

The financial statement that summarizes the operating,investing,and financing activities of a business over a period of time is the __________.

Two methods are available to prepare the Operating Activities section of a statement of cash flows.Which of the following statements regarding these two methods is false?

Determining the cash flows from operating activities generally requires analyzing each item on the income statement as well as the current asset (except cash)and current liability accounts.

Which of the following activities is most likely to have a cash flow effect?

Below are several transactions for Louisville Company: $\begin{array} { l r } \text { Proceeds from issuance of bonds payable } & \$ 635,000 \\\text { Payment to purchase equipment } & 275,000 \\\text { Payment of wages } & 115,000 \\\text { Payment of dividends } & 155,000 \\\text { Payment to pay off notes payable } & 195,000\end{array}$ Based on these transactions,what is the net cash flow from financing activities?

When using the indirect method,how is the receipt of cash from the sale of long-term investments treated on the statement of cash flows?

Which method of preparing the Operating Activities section of a statement of cash flows adjusts net income to remove the effects of deferrals and accruals for revenues and expenses?

The investment in stock of another company is considered a significant activity and thus is reported on the statement of cash flows.

Presented below is the Operating Activities section of the statement of cash flows for Feline Friends Corp.for 2017: $\begin{array}{l}\text { Operating activities: }\\\begin{array} { l r } \text { Cash collected from customers } & \$ 165,000 \\\text { Cash payments for merchandise } & ( 83,000 ) \\\text { Cash payments for operating expenses } & \underline { ( 58,000 ) } \\\text { Net cash inflow from operating activities } & \$ 24,000\end{array}\end{array}$ Which method of preparing the Operating Activities section has Feline used?

Kelly Corp.reported the following information for 2017 and 2018. $\begin{array}{lr}\text { Salaries payable, December } 31,2017 & \$ 3,700 \\\text { Salaries payable, December } 31,2018 & 1,800 \\\text { Salaries expense-2018 } & 57,000\end{array}$ How much cash was paid for salaries during 2018?

Which of the following is not a financing activity?

The issuance of common stock in exchange for a building would appear both as a cash inflow in the Financing Activities section of the cash flow statement and also as a cash outflow in the Investing Activities section.

Parks Company reported an increase of $370,000 in its accounts receivable during the year 2017.The company's statement of cash flows for 2017 using the direct method reported $1 million of cash received from customers.What amount of net sales must Parks have recorded in 2017?

Ultra-lite Corp.began operations on January 1,2017.The statement of cash flows for the first year reported dividends paid of $180,000.The balance sheet at the end of the first year reported $60,000 in dividends payable and $600,000 in ending retained earnings.Determine Ultra-lite's net income for its first year of operations.