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Exam 12: Reporting and Analyzing Cash Flows

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Question 1

Multiple Choice

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The accountant for Crusoe Company is preparing the company's statement of cash flows for the fiscal year just ended.The following information is available: What is the ending balance for retained earnings?

A) $218,000.
B) $170,000.
C) $352,000.
D) $172,000.
E) $179,000.

F) B) and D)
G) None of the above

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Question 2

Multiple Choice

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The accountant for Huckleberry Company is preparing the company's statement of cash flows for the fiscal year just ended.The following information is available: What is the ending balance for retained earnings?

A) $264,000.
B) $13,000.
C) $243,000.
D) $197,000.
E) $105,000.

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

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Question 3

Multiple Choice

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The appropriate section in the statement of cash flows for reporting the issuance of common stock for cash is:

Business activities that generate or use cash are classified as operating,investing,or financing activities on the statement of cash flows.

The reporting of net cash provided or used by operating activities that lists the major items of operating cash receipts,such as receipts from customers,and subtracts the major items of operating cash disbursements,such as cash paid for merchandise,is referred to as the:

For each of the following separate cases,use the information provided to calculate the missing cash inflow or cash outflow using the direct method.

Both the direct and indirect methods yield the identical net cash flow amount provided or used by operating activities.

When preparing the operating section of the statement of cash flows using the indirect method,noncash expenses are ________ net income.

Common uses of the statement of cash flows include all but which of the following?

A cash-based measure to help business decision makers estimate the amount and timing of cash flows is the cash flow on total assets ratio.

When preparing the operating activities section of the statement of cash flows using the indirect method,an increase in accounts receivable is subtracted from net income.

A noncash investing transaction should be disclosed in either a footnote or at the bottom of the statement of cash flows.

________ activities include those transactions that affect long-term liabilities and equity.

________ activities include the cash effects of transactions and events that determine net income.

When analyzing the changes on a spreadsheet used to prepare a statement of cash flows,the cash flows from operating activities generally affect:

Information to prepare the statement of cash flows usually comes from three sources: (1)________,(2)________,and (3)________.

Use the following information about the current year's operations of a company to calculate the cash paid for merchandise.

Northington,Inc.is preparing the company's statement of cash flows for the fiscal year just ended.Using the following information,determine the amount of cash flows from operating activities using the indirect method:

Bagwell's net income for the year ended December 31,Year 2 was $175,000.Information from Bagwell's comparative balance sheets is given below.Compute the cash paid for dividends during Year 2. $\begin{array}{lrr}\text { At December } 31 & \text { Year 2 } & \text { Year } 1 \\\text { Common Stock, \$5 par value } & \$ 500,000 & \$ 450,000 \\\text { Paid-in capital in excess of par } & 948,000 & 853,000 \\\text { Retained earnings } & 688,000 & 582,000\end{array}$

When preparing a statement of cash flows using the indirect method,which of the following is correct?