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Exam 24: The Statement of Cash Flows

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Question 81

True/False

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The cash received from issuing common stock is not reported on the statement of cash flows.

A) True
B) False

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Question 82

Multiple Choice

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Anders Inc, reported that its bonds with a par value of $500,000 and a carrying value of $545,000 were retired for $525,000 resulting in a gain of $20,000. The amounts to be reported on the statement of cash flows include:

A) a $45,000 decrease in cash for financing activities
B) a $525,000 decrease in cash for investing activities and a $45,000 increase in financing activities.
C) a $20,000 decrease in cash from operating activities and a $525,000 decrease in cash for financing activities.
D) $20,000 increase in cash from operating activities and a $545,000 decrease in cash used for financing activities.

E) None of the above
F) All of the above

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Question 83

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The purchase of treasury stock is treated as a cash outflow in the------------ section of the statement of cash flows.

Use the following information . The Kerfuffle Company Income Statement For the Year Ended June 30, 2019 General and Administrative Expenses Liabilities and Stockholders' Equity Additional information: Plant assets that originally cost $67,200 were sold for $56,400, resulting in a gain of $8,200. Dividends of $35,815 were declared and paid in 2019. There were no dividends declared in 2018. -Using the information provided, prepare the cash flows from operating activities for The Kerfuffle Company using the indirect method.

On a statement of cash flows, depreciation expense is:

A list of sources and uses of cash are given below. Indicate on the line provided whether each is an (O) operating, (I) investing, (F) financing, or a significant (N) noncash financing and investing activity. -declared dividend

For each of the following operating activities, select whether it is a source of cash, a use of cash or neither under the indirect method. -increase in Prepaid Expense

Corporations do not commonly use the direct method for the Statement of Cash Flows because

Generally, if a short-term investment is to be classified as a cash equivalent,:

A decrease in current liabilities is:

If the income statement reports a net loss for the year, the loss is not reported in the operating activities section of the statement of cash flows.

When a firm issues a long-term note payable, the amount that it receives for the note is considered a cash inflow from financing activities.

For each of the following operating activities, select whether it is a source of cash, a use of cash or neither under the indirect method. -increase in Accounts Receivable

Cannon Manufacturing Co. sold equipment that cost $18,000 for $5,000. A gain on sale of $1,000 was recorded. How is the Cash Flows from Investing Activities affected?