ACCT: Chpt 12
In 2017, Forever Young, Inc. sold land for $ 80 comma 000$80,000 cash, purchased equipment for $ 16 comma 000$16,000 cash and issued bonds for $ 80 comma 000$80,000 cash. The Net cash provided by investing activities is:
$64,000
Which of the following terms appears on a statement of cash flows - indirect method?
Depreciation Expense
On the statement of cash flows, the exchange of stock for land would be reported as which of the following?
Noncash investing and financing activities
The statement of cash flows is presented for a period of time. T/F
TRUE
On an indirect method statement of cash flows, an increase in accounts payable would be
added to net income in the operating activities section.
A good predictor of future cash flows includes:
cash receipts and cash payments in the current year.
A statement of cash flows accomplishes all of the following EXCEPT:
lists revenues and expenses.
Under the indirect method of preparing the statement of cash flows, the starting point to determine Net cash provided by operating activities is:
net income
A statement of cash flows reports the cash inflows and cash outflows for a company at a point in time. T/F
FALSE
Of the three types of business activities reported on a statement of cash flows, investing activities are the most important when evaluating a business. T/F
FALSE
On the statement of cash flows, activities that create long-term liabilities are usually
Financing Activities
On the statement of cash flows, activities that obtain the cash needed to launch and sustain a company are
Financing Activities
Paying off bonds payable is reported on the statement of cash flows under
Financing Activities
On the statement of cash flows, activities affecting long-term assets are
Investing Activities
Selling equipment for cash is reported on the statement of cash flows under
Investing Activities
On an indirect method statement of cash flows, a gain on the sale of plant assets would be
deducted from net income in the operating activities section.
On an indirect method statement of cash flows, an increase in a prepaid insurance would be
deducted from net income.
Under the direct method of preparing the operating section of the statement of cash flows, net cash provided by financing activities is $498,000. If the indirect method of preparing the statement of cash flows was used:
net cash provided by financing activities would be the same, $498,000.
Using the indirect method to prepare the statement of cash flows, an increase in accounts receivable is subtracted from net income in calculating Net cash provided by operating activities. T/F
TRUE
All except which of the following activities are reported on the statement of cash flows?
Marketing Activities
The sale of land for cash would be classified as a cash inflow from an operating activity on the statement of cash flows. T/F
FALSE
The sale of inventory for cash is reported on the statement of cash flows under
Operating Activities
