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Exam 16: Statement of Cash Flows

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Question 81

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To determine cash payments for merchandise for the cash flow statement using the direct method, a decrease in accounts payable is added to the cost of merchandise sold.

A) True
B) False

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Question 82

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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.

A) True
B) False

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Question 83

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If land costing $145,000 was sold for $205,000, the $60,000 gain on the sale would be added to net income in of the operating activities section of the statement of cash flows (prepared by the indirect method).

Operating expenses other than depreciation for the year were $400,000. Prepaid expenses increased by $17,000 and accrued expenses decreased by $30,000 during the year. Cash payments for operating expenses to be reported on the cash flow statement using the direct method would be

For each of the following, identify whether it would be disclosed as an operating (O), financing (F), or investing (I) activity on the statement of cash flows under the indirect method.

The cost of merchandise sold during the year was $50,000. Merchandise inventories were $12,500 and $10,500 at the beginning and end of the year, respectively. Accounts payable were $6,000 and $5,000 at the beginning and end of the year, respectively. Using the direct method of reporting cash flows from operating activities, cash payments for merchandise total

A ten-year bond was issued at par for $250,000 cash. This transaction should be shown on a statement of cash flows under

Which one of the following below should be added to net income in calculating net cash flow from operating activities using the indirect method?

The last item on the statement of cash flows prior to the schedule of noncash investing and financing activities reports

The manner of reporting cash flows from investing and financing activities will be different under the direct method as compared to the indirect method.

The statement of cash flows shows the effects on cash of a company's operating, investing, and financing activities.

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

Which of the following does not represent an outflow of cash and therefore would not be reported on the statement of cash flows as a use of cash?

Investing activities include

The following selected account balances appeared on the financial statements of the Washington Company: The Washington Company uses the direct method to calculate net cash flow from operating activities. Cash paid to suppliers is

Which of the following concepts of cash is not appropriate to use in preparing the statement of cash flows?

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

Which of the following below increases cash?

Selected data taken from the accounting records of Laser Inc. for the current year ended December 31, are as follows: During the current year, the cost of merchandise sold was $448,500, and the operating expenses other than depreciation were $78,000. The direct method is used for presenting the cash flows from operating activities on the statement of cash flows. Required: Determine the amount reported on the statement of cash flows for: (1) Cash payments for merchandise; and (2) Cash payments for operating expenses.

The current period statement of cash flows includes the flowing: The cash balance at the end of the period is