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Exam 12: Statement of Cash Flows

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Question 71

True/False

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In preparing a statement of cash flows, an increase in the Common Stock and Treasury Stock accounts during a period would be an investing activity.

A) True
B) False

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Question 72

Multiple Choice

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Under IFRS, some companies present which section of the cash flow statement as a single line item?

A) Operating activities
B) Investing activities
C) Financing activities
D) Noncash investing and financing activities

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

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Question 73

Multiple Choice

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Assume that the Fitzgerald Corporation uses the indirect method to depict cash flows. Indicate where, if at all, inventory purchased with cash would be classified on the statement of cash flows.

Using the direct method, major classes of investing and financing activities are listed in the operating activities section.

Authentic Exposure Company had the following transactions that took place during the year: I. Paid amount owing to suppliers $2,750. II) Purchased new equipment for $5,000 by signing a long-term note payable. III) Purchased a patent and paid $15,000 cash for the asset. How what is the total effect of these transactions on Free Cash Flow, Current Cash Debt Coverage, and Cash Debt Coverage respectively?

The current cash debt coverage is computed by dividing

Which one of the following affects cash during a period?

Using the following information, which company appears to be most liquid?

Accounts receivable arising from sales to customers amounted to $80,000 and $70,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $212,000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows is

In preparing the statement of cash flows, determining the net increase or decrease in cash requires the use of

Zoum Corporation had the following transactions during 2014: 1) Issued $125,000 of par value common stock for cash. 2) Recorded and paid wages expense of $60,000. 3) Acquired land by issuing common stock of par value $50,000. 4) Declared and paid a cash dividend of $10,000. 5) Sold a long-term investment (cost $3,000) for cash of $3,000. 6) Recorded cash sales of $400,000. 7) Bought inventory for cash of $160,000. 8) Acquired an investment in Zynga stock for cash of $21,000. 9) Converted bonds payable to common stock in the amount of $500,000. 10) Repaid a 6 year note payable in the amount of $220,000. What is the net cash provided by operating activities?

The following information is available for Mergenthaler Corporation for the year ended December 31, 2014: In addition, the following information is available from the comparative balance sheet for Mergenthaler at the end of 2014 and 2013: Instructions Prepare Mergenthaler's statement of cash flows for the year ended December 31, 2014, using the indirect method.

Which of the following is not typically a characteristic experienced by a company during the growth phase of the corporate life cycle?

Under IFRS, the cash flow statement can be prepared using

Annapolis Company reported net income of $365,000 for the current year. Depreciation recorded on buildings and equipment amounted to $73,000 for the year. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: Instructions Prepare the cash flows from the operating activities section of the statement of cash flows using the indirect method.

Using the following information, which company appears to be least solvent?

The statement of cash flows will not provide insight into

Assume that the Quinn Corporation uses the indirect method to depict cash flows. Indicate where, if at all, dividends received on securities held would be classified on the statement of cash flows.

Analysis of the changes in all of the noncash balance sheet accounts will explain the change in the Cash account.

Which of the following is the first step in preparing the statement of cash flows?