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Exam 9: Preparing and Analyzing the Statement of Cash Flows

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Question 81

Multiple Choice

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Cash from financing activities includes ________.

A) all cash receipts and all cash disbursements for long-term business assets
B) all cash receipts and all cash disbursements for loans,contributions from owners,and distributions to owners
C) all cash receipts and cash disbursements for routine sales and purchases made in the course of doing business
D) detailed estimates of the sources of cash and uses of cash

E) A) and C)
F) C) and D)

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Question 82

Multiple Choice

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In applying the direct method,depreciation expense is ________.

A) added to net income because purchases of the depreciable long-term assets are investing activities
B) subtracted from net income because it is a non-cash expense
C) subtracted from cash from operating activities because it is a non-cash expense
D) not shown on the statement of cash flows prepared using the direct method

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

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Question 83

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Use the following information from Artizan,Inc.,to prepare the financing section of the statement of cash flows for May.

Team Shirts,Inc.issued $100,000 in common stock,borrowed $20,000,and paid $5,000 in dividends.The amount of net cash from (or used for) FINANCING activities is ________.

Team Shirts, Inc. bought a screen-printing machine for $50,000, received $15,000 for the sale of its machine, and repaid a loan of $20,000. The amount of net cash from (or used for) INVESTING activities is ________.

The beginning balance in accounts payable was $4,365.The ending balance was $2,995.How is the accounting information for these items reported on the statement of cash flows using the indirect method?

A use of cash for operating activities is ________.

College TV,Inc.had supplies of $20,000 on hand at December 31,2010 and $25,000 on hand at December 31,2011.Supplies used during 2011 were $50,000.No supplies were purchased on account.For each item,first select the column of the 2011 financial statement where the line item appears,and then fill in the correct amount:

The following information is from Cashew,Inc.'s December 31,2011 annual report: Cash collected from customers on Cashew,Inc.'s statement of cash flows equals ________.

The statement of cash flows ________.

Krupt, Inc., an international company, classified cash transferred to Krupt from its subsidiaries in foreign countries as cash collected from customers on its statement of cash flows. The subsidiaries classified the same cash transferred to Krupt, Inc., the parent company, as payment of long-term debt on their statements of cash flows. Which sections of the consolidated statement of cash flows (both the parent and its subsidiaries combined) will be affected and how? Does this classification of cash seem ethical?

Team Shirts,Inc.bought a computer system for $100,000 and received $10,000 for the sale of its used computers.It also received $10,000 from the sale of its inventory.The amount of net cash from INVESTING activities is ________.

Team Shirts,Inc.recognized $4,690 of insurance expense for the year.At the beginning of the year,the balance in Prepaid insurance was $775.At the end of the year,the balance was $400.How is the accounting information for these items reported on the statement of cash flows using the INDIRECT method?

Cash collected from customers will be greater than the revenue for the same period if the accounts receivable balance increases.

The statement of cash flows shows all of ________ the period.

The preparation of cash budgets includes ________.

Which of the following statements is true?

Which method of preparing the statement of cash flows would show increases in accounts receivable being subtracted from net income?

Which of the following supplementary disclosures are required by GAAP to be reported on the statement of cash flows or as a note to the financial statements?

How is the statement of cash flows prepared when using the direct method?