Chapter 11 exam q's

Using the information below, calculate net cash flows from investing activities. Net income$120,000 Receive cash from issuing stock 80,000 Pay cash for equipment 90,000 Increase in accounts receivable 10,000 Depreciation expense$30,000 Increase in accounts payable 5,000 Receive cash from sale of land 75,000 Pay cash dividends 20,000

$(15,000).

The balance of cash at the beginning of the year was $120,000, and at the end of the year was $140,000. Assuming operating cash flows equal $90,000 and investing cash flows equal $(40,000), calculate financing cash flows for the year.

$(30,000).

Assuming Net Income for the year is $98,000, what is the net operating cash flows given the following information: Depreciation Expense$6,000 Increase in Prepaid Rent$4,000 Decrease in Accounts Receivable$3,000 Increase in Inventory$5,000 Increase in Accounts Payable$2,000

$100,000.

Smith Company's sales revenues for the year are $200,000 and its accounts receivable balance increased by $10,000. How much is "cash collected from customers"?

$190,000.

Salaries expense for the year equals $240,000. Salaries payable at the beginning of the year were $25,000, and at the end of the year were $15,000. Calculate cash paid for salaries during the year.

$250,000.

Barney Company's salaries payable balance increased by $30,000 for the year and cash paid for salaries was $320,000. How much did Barney report for salaries expense?

$350,000.

Using the information below, calculate net cash flows from financing activities. Net income$120,000 Receive cash from issuing stock 80,000 Pay cash for equipment 90,000 Increase in accounts receivable 10,000 Depreciation expense$30,000 Increase in accounts payable 5,000 Receive cash from sale of land 75,000 Pay cash dividends 20,000

$60,000.

In preparing a statement of cash flows under the indirect method, an increase in accounts payable would be reported or included as a(n):

Addition to net income in the operating activities section.

The indirect and direct methods

Are two allowable methods to present operating activities in the statement of cash flows.

Which of the following methods for preparing the statement of cash flows is acceptable under U.S. GAAP?

Both the direct and the indirect method are acceptable.

Which of the following is an example of a cash inflow from investing activities?

Cash received from the sale of equipment.

We can identify operating activities from income statement information and changes in:

Current asset and current liability accounts.

Depreciation expense is added to net income in the statement of cash flows under the indirect method because:

Depreciation expense reduced net income, but is a noncash item.

Which of the following items do we not report in the statement of cash flows using the direct method?

Depreciation expense.

The issuance of a note payable is classified in the statement of cash flows as a(n):

Financing activity.

The issuance of common stock is classified in the statement of cash flows as a(n)

Financing activity.

The issuance of notes payable is classified in the statement of cash flows as a(n)

Financing activity.

The payment of cash dividends is classified in the statement of cash flows as a(n):

Financing activity.

The repayment of a note payable is classified in the statement of cash flows as a(n):

Financing activity.

The purchase of an intangible asset is classified in the statement of cash flows as a(n):

Investing activity.

The sale of an intangible asset for cash is classified in the statement of cash flows as a(n):

Investing activity.

We can identify financing activities from additional information and changes in:

Long-term liability and stockholders' equity accounts.

Which of the following best describes the indirect method of preparing the operating activities section of the statement of cash flows?

Net income reconciled from accrual basis to cash basis.

Which of the following is the correct sequence of presenting the activities in the statement of cash flows?

Operating activities, investing activities, financing activities.

The payment of semi-annual interest on outstanding bonds payable is classified in the statement of cash flows as a(n):

Operating activity.

The purchase of inventory for cash is classified in the statement of cash flows as a(n):

Operating activity.

Which of the following is an example of a cash outflow from financing activities?

Payment of cash dividends.

Which of the following statements is not true relating to cash flow analysis?

Positive cash flow from operations is not important to a company's survival in the long-run.

Which of the following is an example of a cash outflow from an investing activity?

Purchase of a building.

Which of the following is an example of a cash inflow from an investing activity?

Receipt of cash from the sale of equipment.