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Exam 13: Statement of Cash Flows

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Question 41

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Which of the following should be deducted from net income in calculating net cash flow from operating activities using the indirect method?

A) depreciation expense
B) gain on sale of land
C) a loss on the sale of equipment
D) dividends declared and paid

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Question 42

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The direct method of preparing the operating activities section of the statement of cash flows reports major classes of cash receipts and cash payments related to the day-to-day operations of the business.

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Question 43

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The income statement disclosed the following items for the current year: Balances of the current assets and current liabilities accounts changed between December 31, last year, and December 31, this year, as follows: Required: Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method.

If $475,000 of bonds payable are sold at 101, $475,000 would be reported in the cash flows from financing activities section of the statement of cash flows.

In preparing the cash flows from operating activities section of the statement of cash flows by the indirect method, the amortization of bond discount for the period is deducted from the net income for the period.

The operating cash flow available for company use after purchasing the fixed assets that are necessary to maintain current productive capacity is called the

Cash dividends paid on capital stock would be reported in the statement of cash flows in

For each of the following activities that may take place during the accounting period, indicate the effect a-g on the statement of cash flows prepared using the indirect method.Choices may be selected as the answer for more than one question. -decrease in accounts payable balance

When using the spreadsheet work sheet for the statement of cash flows, indirect method, entries made on the spreadsheet are

Cash paid for preferred stock dividends should be shown on the statement of cash flows under

Identify the section of the statement of cash flows a-d where each of the following items would be reported. -Loss on sale of equipment

Indicate whether each of the following would be added to or deducted from net income in determining net cash flow from operating activities by the indirect method: a Increase in prepaid expenses b Amortization of patents c Increase in salaries payable d Gain on sale of fixed assets e Decrease in accounts receivable f Increase in notes receivable due in 60 days g Amortization of discount on bonds payable h Decrease in merchandise inventory i Depreciation of fixed assets j Loss on retirement of long-term debt k Decrease in accounts payable l Increase in notes payable due in 30 days m Increase in income taxes payable

Free cash flow is

On the basis of the following data for Branch Co.for the current and preceding years ended December 31, prepare a statement of cash flows using the indirect method. Assume that equipment costing $125,000 was purchased for cash and the land was sold for $15,000.The stock was issued for cash and the only entries in the retained earnings account were for net income of $56,000 and cash dividends declared and paid of $18,000.

Cash flow per share is

Which of the following should be added to net income in calculating net cash flow from operating activities using the indirect method?

Under GAAP, cash receipts from interest and dividends are classified as

Which of the following does not represent an outflow of cash and therefore would not be reported on the statement of cash flows as a use of cash?

The board of directors of Kendall Co.declared cash dividends totaling $390,000 during the current year.The comparative balance sheet indicates dividends payable of $58,000 at the beginning of the year and $73,000 at the end of the year.What was the amount of cash payments Kendall Co.made to stockholders during the year?

Which of the following can be found on the statement of cash flows?