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Exam 21: The Statement of Cash Flows

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Question 61

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Acquiring land with a long-term note is:

A) Reported as an investing activity in the statement of cash flows.
B) Reported as a financing activity in the statement of cash flows.
C) Reported as a noncash investing and financing activity.
D) None of these is correct.

E) B) and C)
F) A) and C)

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Question 62

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Alpha Company had the following account balances for 2009: Alpha reported net income of $210,000 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) $224,000.
B) $206,000.
C) $214,000.
D) $196,000.

E) A) and D)
F) None of the above

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Question 63

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Did accounts receivable increase or decrease during 2009?

During the year, cash increased by $300 million. Investing and financing activities created positive cash flow totaling $500 million. What were net cash flows from operating activities in the statement of cash flows?

Which of the following causes a change in cash?

Sneed Corporation reported balances in the following accounts for the current year: Income tax expense was $230 for the year. What was the amount paid for taxes?

The sale of stock and the sale of bonds are reported as financing activities. Are payments of dividends to shareholders and payments of interest to bondholders also reported as financing activities? Explain.

Which of the following is reported as a deduction from net income when using the indirect method to determine net cash flows from operating activities?

In its 2009 income statement, WME reported $695,000 for service revenue earned from membership fees. WME received $681,000 cash in advance from members during 2009. In its reconciliation schedule, WME should:

On June 4, White Corporation issued $400 million of bonds for $386 million. During the same year, $1 million of the bond discount was amortized. In a statement of cash flows prepared by the indirect method, White Corporation should report:

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

When preparing the statement of cash flows using the indirect method for determining net cash flows from operating activities, depreciation is added to net income because:

Ludwig Company's prepaid rent was $9,000 at December 31, 2008, and $13,000 at December 31, 2009. Ludwig reported rent expense of $19,000 on the 2009 income statement. What amount would be reported in the statement of cash flows as rent paid using the direct method?

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

On December 31, 2009, Tiras Company reported net income of $50,000 and sales of $200,000. The company also reported beginning and ending accounts receivable at $20,000 and $25,000, respectively. Tiras will report cash collected from customers in its 2009 statement of cash flows (indirect method) in the amount of:

Cash equivalents have each of the following characteristics except:

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?

Determine the amount of cash paid to suppliers for each of the four independent situations below. $\begin{array} { c c c c c } \text { Situation } & \begin{array} { c } \text { Cost of } \\\text { goods sold }\end{array} & \text { Inventory } & \begin{array} { c } \text { Accounts } \\\text { payable }\end{array} & \text { Cash paid to suppliers } \\1 & \$ 300,000 & \$ 6,000 & \$ \quad 0 & \$ \\2 & 300,000 & 0 & 7,000 & \$ \\3 & 400,000 & 6,000 & 7,000 & \$ \\4 & 400,000 & ( 6,000 ) & ( 7,000 ) & \$\end{array}$

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

Assuming the decrease in accrued expenses during fiscal year 2008 included a $14,000 reduction due to interest on debt, compute the interest expense (net) for Kinney in that year.