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Exam 21: The Statement of Cash Flows

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Question 41

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Hogan Company had the following account balances for 2009: Hogan reported net income of $300,000 for 2009. Assuming no other changes in current account balances, what is the amount of net cash provided by operating activities for 2009 reported in the statement of cash flows?

A) $291,000.
B) $290,000.
C) $281,000.
D) $301,000.

E) A) and C)
F) All of the above

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Question 42

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

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Cash flows from investing acti...

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Question 43

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Which of the following would be reported as a cash outflow from investing activities?

Which of the following is always reported as an outflow of cash?

Of the following, which is not an investing activity?

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?

Using the direct method, cash received from customers is calculated as sales:

Partial balance sheets and additional information are listed below for Rickey Company. Additional information for 2009: Net income was $160,000. Depreciation expense was $20,000. Required: Prepare the operating activities section of the statement of cash flows for 2009 using the indirect method. Rickey Company Partial Balance Sheets as of December 31 $\begin{array}{lrr}\text { Assets }&2009&2008\\\text { Cash } & \$ 20,000 & \$ 40,000 \\\text { Accounts receivable } & 85,000 & 70,000 \\\text { Inventory } & 35,000 & 40,000\\\text { Liabilities }\\\text { Accounts payable }&\$62,000&\$80,000\end{array}$

Proceeds from the sale of a plant site are:

Red Manufacturing Company owns 40% of the outstanding common stock of Blue Supply Company. During 2009, Red received a $50 million cash dividend from Blue. What effect did this dividend have on Red's 2009 statement of cash flows?

Lite Travel Company's accounting records include the following information: What is the amount of net cash provided by operating activities indicated by the numbers provided?

In preparing its cash flow statement for the year ended December 31, 2009, Red Co. gathered the following data: In its December 31, 2009, statement of cash flows, what amount should Red report as net cash outflows from investing activities?

Which of the following is not an inflow of cash?

A decrease in cash dividends payable means that dividends declared were less than dividends paid.

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:

Interest payments on debt are classified as cash outflows from financing activities.

(a.) What is the most significant change in operating cash outflow activity in 2008 relative to 2007? (b.) What balance sheet accounts would likely have changed during 2008 in relation to the cash flow change that you identify in (a)?

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

Prepare the summary entries necessary to determine the amount of cash received from customers for each of the four independent situations below. $\begin{array} { c c c c c c } \text { Situation } & \begin{array} { c } \text { Sales } \\\text { revenue }\end{array} & \begin{array} { c } \text { Accounts } \\\text { receivable } \\\text { inc (dec) }\end{array} & \begin{array} { c } \text { Bad debt } \\\text { expense } \\\text { inc (dec) }\end{array} & \begin{array} { c } \text { Allowance for } \\\text { uncollectible } \\\text { Accounts inc }\end{array} & \begin{array} { c } \text { Cash received } \\\text { from customers }\end{array} \\\hline 1 & 200,000 & 10,000 & 0 & 0 & \\2 & 200,000 & ( 10,000 ) & 0 & 0 & \\3 & 200,000 & ( 10,000 ) & 2,000 & 1,000 & \\4 & 200,000 & 10,000 & 2,000 & ( 1,000 ) &\end{array}$

Moon Company owns 56 million shares of stock of Center Company classified as available for sale. During 2009, the fair value of those shares increased by $34 million. What effect did this increase have on Moon's 2009 statement of cash flows?