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Exam 13: Statement of Cash Flows

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Question 61

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Income tax was $175,000 for the year.  Income tax payable was $30,000 and $40,000 at the beginning and end of the year, respectively.  Cash payments for income tax reported on the statement of cash flows using the direct method is

A) $175,000
B) $165,000
C) $205,000
D) $215,000

E) C) and D)
F) None of the above

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Question 62

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Cash flows from investing activities, as part of the statement of cash flows, would include any receipts from the issuance of bonds payable.

A) True
B) False

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Question 63

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Dorman Company reported the following data: Prepare the cash flows from operating activities section of the statement of cash flows using the indirect method.

Cash flow per share is

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

The declaration and issuance of a stock dividend would be reported on the statement of cash flows.

Under the indirect method, expenses that do not affect cash are added to net income in the operating activities section of the statement of cash flows.

Cost of merchandise sold reported on the income statement was $155,000.  The accounts payable balance increased $8,000, and the inventory balance increased by $21,000 over the year.  Determine the amount of cash paid for merchandise.

There are two alternatives to reporting cash flows from operating activities in the statement of cash flows: (1) the direct method and (2) the indirect method.

Using the indirect method, if land costing $85,000 was sold for $145,000, the amount reported in the financing activities section of the statement of cash flows would be $85,000.

Purchasing equipment by issuing a six-month note should be shown on the statement of cash flows under the investing activities section.

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

Identify the section of the statement of cash flows (a-d) where each of the following items would be reported.

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.

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

Sales reported on the income statement were $372,000.  The accounts receivable balance declined $4,500 over the year.  The amount of cash received from customers was $367,500.

Rogers Company reported net income of $35,000 for the year.  During the year, accounts receivable increased by $7,000, accounts payable decreased by $3,000 and depreciation expense of $8,000 was recorded.  Net cash provided by operating activities for the year is

Balances of the current asset and current liability accounts at the end and beginning of the year are as follows: Use the direct method to prepare the cash flows from operating activities section of a statement of cash flows.

For each of the following activities that may take place during the accounting period, indicate the effect (a-g) on the statement of cash flows prepared using the indirect method. Choices may be selected as the answer for more than one question.

Repayments of bonds would be shown as a cash outflow in the investing section of the statement of cash flows.