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Exam 12: Statement of Cash Flows

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Question 51

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Texas Corporation had the following comparative balance sheet information for 2015 and 2016: The company reported net income for 2016 of $40,000.No property,plant & equipment was disposed of during the year.Texas paid $16,000 in cash dividends during 2016.Texas uses the indirect method to prepare the statement of cash flows. Required: Prepare Texas's Statement of Cash Flows for 2016.

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Question 52

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Which of the following would not be a cash flow from financing activities?

A) Borrowing on a long-term note payable
B) Repayment of principal on bonds payable
C) Payment of interest on bonds payable
D) Payment of a cash dividend

E) B) and C)
F) A) and D)

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Question 53

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At the beginning of 2016,Howard Co.paid cash to purchase equipment costing $80,000.There was $10,000 of depreciation expense recognized during the accounting period.Show the combined effects of the events.

Which method of reporting cash flows from operating activities is used by most businesses in preparing the statement of cash flows?

Howard Co.purchased $4,000 of supplies,paying $1,500 in cash and charging the remainder on account.$1,600 of the supplies were used during the accounting period.Show the combined effects of the events.

The Baird Company reported depreciation expense of $10,000 and net income of $16,000 on its 2016 income statement.During 2016 the company's accounts receivable balance decreased by $4,000.Based on this information alone,what was the amount of cash flow from operating activities?

The LaPage Corporation reported a beginning balance of $2,200 in its Prepaid Insurance account for 2016.During the year,a total of $17,000 was recognized as Insurance Expense and the Prepaid Insurance account had an ending balance of $1,800.How much cash did LaPage pay for insurance during 2016?

Which of the following transactions would be disclosed on a schedule of noncash investing and financing activities?

What are the two methods used to prepare the operating activities section of the statement of cash flows?

The following income statement was drawn from the annual report of Newtown Company: The amount of cash flow from operating activities is

Use the following to answer questions The Jackson Company issued a one-year $80,000 face value interest-bearing note with a stated interest rate of 9%.The note was issued to the Galaxy Bank on August 1,2016. -The amount of interest expense and cash outflow shown on the December 31,2016 financial statements would be:

The Mercury Company rents out a portion of its office space to another company.At the beginning of 2016 the balance in the Unearned Rent Revenue account was $3,400.During 2016,Mercury recognized $16,600 of rent revenue.If the ending balance of Unearned Rent Revenue is $2,600,how much cash was received from the tenant for rent during 2016?

Can a company have a negative cash flow from operating activities for the year but still have a net income on the income statement? Explain.

On January 1,2016,the balance of Jacobs Corporation's Accounts Receivable was $40,000.Sales on account for 2016 amounted to $320,000 and the ending balance of Accounts Receivable was $64,000.What is the amount of cash collected from customers?

Chisholm Associates uses the indirect method for preparing the statement of cash flows.The following accounts and balances were drawn from the company's accounting records: Net income for the period was $80,000.The net cash flows from operating activities would be:

On December 31,2016,Howard Corporation recorded the expiration of $4,000 of insurance that was previously recorded as an asset.Show the effects of this transaction on Howard's income statement and statement of cash flows.

The indirect method for preparing the operating activities section of the statement of cash flows begins with the amount of sales revenue reported on the income statement.

Which of the following would not be presented in the financing section of the statement of cash flows?

Use the following to answer questions The following data is supplied from the comparative balance sheets and income statement information from Moreno,Inc.Moreno uses the indirect method to prepare the statement of cash flows.Net income for 2016 was $40,000.No long term assets were sold during the year.During 2016,Moreno paid dividends of $24,000. Use the following to answer questions 128 ― 130: -Prepare the operating activities section of Moreno's statement of cash flows.

Which method do most companies use in preparing the operating activities section of the cash flow statement?