Show:
Operating Activities
Investing Activities
Financing Activities
General Questions
Problems
100
A company records depreciation of $25,000. How is this recorded in the operating activities section?
Depreciation increased by $25,000
100
All of the following would be considered investing activities except: a. purchase of equipment for cash. b. receipt of cash dividends from investments. c. sale of land for cash.
B. receipt of cash dividends from investments
100
All of the following would be classified as financing cash flows except: a. interest paid on long-term debt b. dividends paid on preferred stock c. purchases of treasury stock
A. interest paid on long-term debt
100
The primary purpose of the statement of cash flows is to provide information a. about the cash receipts and cash payments of an entity during a period. b. about the entity's ability to meet its obligations, its ability to pay dividends, and its needs for external financing c. about the operating, investing, and financing activities of an entity during a period.
A. about the cash receipts and cash payments of an entity during a period.
100
Spruce Pine Co. provided the following information on selected transactions during 2017: Repayment of bond principal $450,000 Proceeds from issuing common stock 760,000 Purchases of inventory 940,000 Proceeds from the sale of treasury stock 120,000 Purchase of 10% interest in stock of Hindi Corp. 220,000 Dividends paid to common & preferred stockholders 80,000 Proceeds from issuing preferred stock 150,000 Proceeds from sale of land 380,000 The net cash provided (used) by investing activities during 2017 is
$160,000........ 380,000 - 220,000 = 160,000
200
The method of calculating net cash flow from operating activities that results in the presentation of a condensed cash receipts and cash disbursements statement is the: a. indirect method. b. direct method c. cash flow method
B. direct method
200
Investing activities include all of the following except: a. making and collecting loans b. obtaining cash from creditors c. acquiring and disposing of investments
B. obtaining cash from creditors
200
Which type of cash flow activity includes obtaining cash from issuing debt and repaying amounts borrowed and obtaining cash from stockholders and paying them dividends? a. Investing b. Operating c. Financing
C. financing
200
An increase in short-term notes receivable will be added to net income under the indirect method of preparing the statement of cash flows. True or False
False
200
Ranger Co. provided the following information on selected transactions during 2017: Repayment of bond principal $450,000 Proceeds from issuing common stock 760,000 Purchases of inventory 940,000 Proceeds from the sale of treasury stock 120,000 Purchase of 10% interest in stock of Hanoi Corp. 320,000 Dividends paid to common & preferred stockholders 100,000 Proceeds from issuing preferred stock 150,000 Proceeds from sale of land 280,000 The net cash provided (used) by financing activities during 2017 is
$480,000........ 760,000+120,000-100,000+150,000-450,000 = $480,000
300
All of the following adjustments would be deducted in determining net cash flow from operating activities using the indirect method except: a. amortization of bond premium b. decrease in deferred income tax liability c. increase in accrued liabilities
C. increase in accrued liabilities
300
Sold land at book value of $25,000. What is reported in the investing activities section?
Sale of land increase of $25,000
300
Financing activities include all of the following except: a. Making and collecting loans b. Obtaining cash from creditors c. Obtaining capital from owners
A. making and collecting loans
300
A statement of cash flows typically would not disclose the effects of a. capital stock issued at an amount greater than par value. b. stock dividends declared c. cash dividends paid
B. stock dividends declared
300
Anna Maria Island Co. provided the following information on selected transactions during 2017: Purchase of land by issuing bonds $1,550,000 Proceeds from sale of land 925,000 Proceeds from issuing bonds 1,900,000 Purchases of inventory 2,975,000 Purchases of treasury stock 190,000 Loans made to affiliated corporations 525,000 Dividends paid to preferred stockholders 120,000 Proceeds from issuing preferred stock 325,000 Proceeds from sale of equipment 650,000 The net cash provided by financing activities during 2017 is
$1,915,000....... 1,900,000-190,000-120,000+325,000 = $1,915,000
400
The reconciliation of net income to net cash flow from operating activities is reported under: a. the direct method only b. the indirect method only c. both methods
C. both methods
400
Purchased land for $500,000. What is reported in the investing activities section?
Purchased land decrease of $500,000.
400
Bonds payable decreased $40,000 during the year. As indicated from the additional information, the company redeemed the bonds at their book value. How is this reported in the financing section?
Redemption of Bonds decreased by $40,000
400
Which method adjusts net income for items that affected reported net income but did not affect cash? a. Accrual b. Indirect c. Direct
B. indirect
400
Ando Company sold some of its plant assets during 2017. The original cost of the plant assets was $500,000 and the accumulated depreciation at date of sale was $325,000. The proceeds from the sale of the plant assets were $150,000. What would be reported in the investing activities section? a. Increase of $350,000 b. Increase of $175,000 c. Decrease of $175,000
b. Increase of $175,000....... 500,000 - 325,000 = 175,000
500
Operating activities include all of the following except: a. Cash receipts from sale of goods and services b. Cash payments to suppliers c. Making loans
C. Making loans
500
Lending money to a customer for $100,000. What is reported in the investing activities section?
Decrease of $100,000.
500
Tax Consultants issued common stock of $160,000 at par. What is reported in the financing section?
Sale of common stock increased $160,000
500
Only the comparative balance sheet is needed to prepare the statement of cash flows. True or False
False
500
Ranger Co. provided the following information on selected transactions during 2017: Repayment of bond principal $300,000 Proceeds from issuing common stock 520,000 Purchases of inventory 940,000 Proceeds from the sale of treasury stock 100,000 Purchase of 10% interest in stock of Hanoi Corp. 320,000 Dividends paid to common & preferred stockholders 165,000 Proceeds from issuing preferred stock 125,000 Proceeds from sale of land 280,000 The net cash provided (used) by financing activities during 2017 is
$280,000...... 520,000+100,000-165,000+125,000-300,000 = $280,000