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Exam 13: Statement of Cash Flows

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Question 21

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Zenith Corporation sells some of its used store fixtures. The acquisition cost of the fixtures is $12,500, the accumulated depreciation on these fixtures is $9,750 at the time of sale. The fixtures are sold for $5,300. The value of this transaction in the Investing section of the statement of cash flows is:

A) $12,500
B) $5,300
C) $2,750
D) $2,550

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

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Question 22

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Cash flows from investing activities, as part of the statement of cash flows, include payments for the purchase of treasury stock.

A) True
B) False

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Question 23

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Preferred stock issued in exchange for land would be reported in the statement of cash flows in

The cash flows from operating activities are reported by the direct method on the statement of cash flows. Determine the following:

Cash receipts from interest and dividends are classified as

Identify which section the statement of cash flows (using the indirect method) would present information regarding the following activities: (Use O for operating, I for investing, or F for financing): a. Issued common stock b. Redeemed bonds c. Issued preferred stock d. Purchased patents e. Net income f. Paid cash dividends g. Purchased treasury stock h. Sold long-term investment. i. Sold equipment. j. Purchased buildings k. Issued bonds

The following information is available from the current period financial statements: The net cash flow from operating activities using the indirect method is

Sales reported on the income statement were $690,000. The accounts receivable balance declined $39,000 over the year. Determine the amount of cash received from customers.

The board of directors declared cash dividends total $168,000 during 2014. The comparative balance sheet indicated dividends payable of $46,000 at the beginning of the year and $42,000 at the end of the year. What was the amount of cash payment to stockholders during the year?

Equipment with an original cost of $75,000 and accumulated depreciation of $20,000 was sold at a loss of $7,000. As a result of this transaction, cash would

Which of the following would not be found in a Schedule of Noncash Investing and Financing Activities, reported at the end of a Statement of Cash Flows?

Cash flows from financing activities, as part of the statement of cash flows, include payments for dividends.

On the statement of cash flows, the cash flows from financing activities section would include

To arrive at cash flows from operations, it is necessary to convert the income statement from an accrual basis to the cash basis of accounting.

Under the direct method of preparing a Statement of Cash Flows, the gain on the sale of land is not adjusted or reported as part of cash flows from operating activities.

Rarely would the cash flows from operating activities, as reported on the statement of cash flows, be the same as the net income reported on the income statement.

A major disadvantage of the indirect method of reporting cash flows from operating activities is that the difference between the net amount of cash flows from operating activities and net income is emphasized.

On the statement of cash flows, a $7,500 gain on the sale of fixed assets would be

A business issues 20-year bonds payable in exchange for preferred stock. This transaction would be reported on the statement of cash flows in

Selected data taken from the accounting records of Laser Inc. for the current year ended December 31, are as follows: