exam 3 ACC

When preparing a statement of cash flows (indirect method), which of the following is not an adjustment to reconcile net income to net cash provided by operating activities?

a change in dividends payable

During 2018, Sheridan Company had the following activities related to its financial operations: Carrying value of convertible preferred stock in Sheridan, converted into common shares of Sheridan $ 536000 Payment in 2018 of cash dividend declared in 2017 to preferred shareholders 274000 Payment for the early retirement of long-term bonds payable (carrying amount $3934000) 3979000 Proceeds from the sale of treasury stock (on books at cost of $389000) 452000 The amount of net cash used in financing activities to appear in Sheridan's statement of cash flows for 2018 should be

3801000 274000+397000-452000

A company borrows $10,000 and signs a 90-day nontrade note payable. In preparing a statement of cash flows (indirect method), this event would be reflected as a(n)

cash inflow from financing activities

Which of the following would be classified as a financing activity on a statement of cash flows?

payment of a bond payable

The balance in retained earnings at December 31, 2017 was $1430000 and at December 31, 2018 was $1160000. Net income for 2018 was $996000. A stock dividend was declared and distributed which increased common stock $493000 and paid-in capital $101000. A cash dividend was declared and paid. The stock dividend should be reported on the statement of cash flows (indirect method) as

stock dividends are not shown on a statement of cash flows

The following information was taken from the 2018 financial statements of Crane Company: Bonds payable, January 1, 2018 $ 790000 Bonds payable, December 31, 2018 4700000 During 2018 • A $710000 payment was made to retire bonds payable with a face amount of $790000. • Bonds payable with a face amount of $310000 were issued in exchange for equipment. In its statement of cash flows for the year ended December 31, 2018, what amount should Crane report as proceeds from issuance of bonds payable?

4390000 4700000+790000-310000-790000

The balance in retained earnings at December 31, 2017 was $1432000 and at December 31, 2018 was $1166000. Net income for 2018 was $995000. A stock dividend was declared and distributed which increased common stock $501000 and paid-in capital $34000. A cash dividend was declared and paid. The amount of the cash dividend was Entry field with correct answer $1261000. $726000. $760000. $293000.

995000-501000-34000+(1432000-1166000)=726000

The first step in the preparation of the statement of cash flows requires the use of information included in which comparative financial statements?

Balance Sheet

An analysis of the machinery accounts of Sheffield Corp. for 2018 is as follows: Machinery, Net of Accumulated Accumulated Machinery Depreciation Depreciation Balance at January 1, 2018 $490000 $129000 $361000 Purchases of new machinery in 2018 for cash 210000 — 210000 Depreciation in 2018 — 104000 (104000 ) Balance at Dec. 31, 2018 $700000 $233000 $467000 The information concerning Sheffield's machinery accounts should be shown in Sheffield's statement of cash flows (indirect method) for the year ended December 31, 2018, as a(n)

addition to net income of $104000 and a $210000 decrease in cash flows from investing activities.

When using the indirect method to prepare the operating section of a statement of cash flows, which of the following is added to net income to compute cash provided by/used by operating activities?

amortization of patent

Equipment which cost $431000 and had accumulated depreciation of $241000 was sold for $218000. This transaction should be shown on the statement of cash flows (indirect method) as a(n)

deduction from net income of $28000 and a $218000 cash inflow from investing activities.

Waterway Industries sold some of its plant assets during 2018. The original cost of the plant assets was $906000 and the accumulated depreciation at date of sale was $848000. The proceeds from the sale of the plant assets were $90400. The information concerning the sale of the plant assets should be shown on Waterway's statement of cash flows (indirect method) for the year ended December 31, 2018, as a(n)

subtraction from net income of $32400 and a $90400 increase in cash flows from investing activities.

Correct answer. Your answer is correct. Xanthe Corporation had the following transactions occur in the current year: 1. Cash sale of merchandise inventory. 2. Sale of delivery truck at book value. 3. Sale of Xanthe common stock for cash. 4. Issuance of a note payable to a bank for cash. 5. Sale of a security held as an available-for-sale investment. 6. Collection of loan receivable. How many of the above items will appear as a cash inflow from investing activities on a statement of cash flows for the current year?

three items