accounting ch 16-17 study guide

equipment with an original cost of $75,959 and accumulated depreciation of $21,988 was sold at a loss of $7,414. as a result of this transaction, cash would a. increase by $75,959 b. decrease by $7,414 c. decrease by $21,988 d. Increase by $46,557

d. increase by $46,557

a building with a cost of $153,000 and accumulated depreciation of $42,000 was sold for an $11,000 gain. When using the indirect method, the cash generated from this investing activity is $121,000

false

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

false

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

false

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

false

cash flows from financing activities, as part of the statement of cash flows, would include any payments for dividends

true

cash flows from investing activities, as part of the statement of cash flows, include payments for the acquisition of fixed assets

true

cash flows from investing activities, as part of the statement of cash flows, would include any receipts from the sale of land

true

in preparing the operating activities section of the statement of cash flows by the indirect method, the depreciation expense for the period is added to the net income for the period

true

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

true

there are two alternatives for reporting cash flows from operating activities on the statement of cash flows: (1) the direct method and (2) the indirect method

true

which statement can be found on the statement of cash flows? a. cash flows from operating activities b. total assets c. total changes in stockholders' equity d. changes in retained earnings

a. cash flows from operating activities

which of the following represents an inflow of cash and therefore would be reported on the statement of cash flows? a. issuance of long-term debt b. acquisition of treasury stock c. retirement of bond payable d. declaration of stock dividends

a. issuance of long-term debt

a building with a book value of $54,000 is sold for $63,000 cash, using the indirect method, this transaction should be shown on the statement of cash flows as an increase of a. $54,000 from investing activities b. $63,000 from investing activities and a deduction from net income of $9,000 c. $54,000 from investing activities and an addition to net income of $9,000 d. $9,000 from investing activities

b. $63,000 from investing activities and a deduction from net income of $9,000

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? a. purchase of treasury stock b. discarding an asset that had been fully depreciated c. payment of cash dividends d. purchase of noncurrent assets

b. discarding an asset that had been fully depreciated

cash paid to purchase long-term investments would be reported on the statement of cash flows in a. the cash flows from (used for) financing activities section b. the cash flows from (used for) investing activities section c. a separate section of noncash investing and financing activities d. the cash flows from (used for) operating activities section

b. the cash flows from (used for) investing activities section

land costing $138,176 was sold for $177,341 cash. the gain on the sale was reported on the income statement as other income. on the statement of cash flows, what amount should be reported as an investing activity from the sale of the land? a. $39,165 b. $138,176 c. $177,341 d. $315,517

c. $177,341

if a gain of $11,000 is realized in selling (for cash) office equipment having a book value of $55,000, the total amount reported in the investing activities section of the statement of cash flows is a. $44,000 b. $11,000 c. $66,000 d. $55,000

c. $66,000

a 10-year bond was issued at face value for $250,000 cash. this transaction should be shown on a statement of cash flows under a. noncash investing and financing activities b. operating activities c. financing activities d. investing activities

c. financing activities

which of the following should be shown on a statement of cash flows under the financing activities section? a. the proceeds from the sale of a building b. the purchase of a long-term investment in the common stock of another company c. the payment of cash to retire a long-term note d. the issuance of a long-term note to acquire land

c. the payment of cash to retire a long-term note