chapter 12 practice

Wilma's Vegetable Market had the following transactions during 2012: 1. Issued $25,000 of par value common stock for cash. 2. Recorded and paid wages expense of $10,000. 3. Acquired land by issuing common stock of par value $50,000. 4. Declared and paid a cash dividend of $1,000. 5. Sold a long-term investment (cost $3,000) for cash of $3,000. 6. Recorded cash sales of $20,000. 7. Bought inventory for cash of $2,000. 8. Acquired an investment in IBM stock for cash of $6,000. 9. Converted bonds payable to common stock in the amount of $10,000. 10. Repaid a 6 year note payable in the amount of $11,000. What is the net cash provided by financing activities? a. $13,000. b. $25,000. c. $14,000. d. $9,000.

a. $13,000.

Harden Corporation engaged in the following transaction. Assume that the Harden Corporation uses the indirect method to depict cash flows. Indicate where, if at all, accounts receivable collected would be classified on the statement of cash flows. a. Operating activities section. b. Investing activities section. c. Financing activities section. d. Does not represent a cash flow.

a. Operating activities section.

Harden Corporation engaged in the following transaction. Assume that the Harden Corporation uses the indirect method to depict cash flows. Indicate where, if at all, income taxes paid would be classified on the statement of cash flows. a. Operating activities section. b. Investing activities section. c. Financing activities section. d. Does not represent a cash flow.

a. Operating activities section.

Harden Corporation engaged in the following transaction. Assume that the Harden Corporation uses the indirect method to depict cash flows. Indicate where, if at all, inventory purchased with cash would be classified on the statement of cash flows. a. Operating activities section. b. Investing activities section. c. Financing activities section. d. Does not represent a cash flow.

a. Operating activities section.

Investing activities include a. collecting cash on loans made. b. obtaining cash from creditors. c. obtaining capital from owners. d. repaying money previously borrowed.

a. collecting cash on loans made.

The phase in the product life cycle when a company is purchasing fixed assets and beginning to produce and sell is the a. introductory phase. b. growth phase. c. maturity phase. d. decline phase.

a. introductory phase.

78. Which of the following activities would be classified as an investing activity? a. Cash received from interest revenue. b. Cash paid (loaned) to a borrower as a loan. c. Cash received from dividend revenue. d. Cash paid to reacquire capital stock.

b. Cash paid (loaned) to a borrower as a loan.

Harden Corporation engaged in the following transaction. Assume that the Harden Corporation uses the indirect method to depict cash flows. Indicate where, if at all, land purchased for cash would be classified on the statement of cash flows. a. Operating activities section. b. Investing activities section. c. Financing activities section. d. Does not represent a cash flow.

b. Investing activities section.

During 2012, Jennifer Industries reported cash provided by operations of $280,000,000, cash used in investing of $343,000,000, and cash used in financing of $45,000,000. In addition, cash spent for fixed assets during the period was $138,000,000. Average current liabilities were $325,000,000 and average total liabilities were $858,000,000. No dividends were paid. Based on this information, what was Jennifer's free cash flow? a. ($63,000,000). b. $108,000,000. c. $142,000,000. d. ($246,000,000).

c. $142,000,000.

Wilma's Vegetable Market had the following transactions during 2012: 1. Issued $25,000 of par value common stock for cash. 2. Recorded and paid wages expense of $10,000. 3. Acquired land by issuing common stock of par value $50,000. 4. Declared and paid a cash dividend of $1,000. 5. Sold a long-term investment (cost $3,000) for cash of $3,000. 6. Recorded cash sales of $20,000. 7. Bought inventory for cash of $2,000. 8. Acquired an investment in IBM stock for cash of $6,000. 9. Converted bonds payable to common stock in the amount of $10,000. 10. Repaid a 6 year note payable in the amount of $11,000. What is the net cash provided by investing activities? a. $6,000. b. $16,000 c. ($3,000). d. $3,000.

c. ($3,000).

Which of the following is not typically a characteristic experienced by a company during the growth phase of the corporate life cycle? a. Cash from operations on the statements of cash flows will be less than net income on the income statement. b. Collections on accounts receivable will lag behind sales. c. Cash from investing is positive. d. Cash from financing is positive.

c. Cash from investing is positive.

Harden Corporation engaged in the following transaction. Assume that the Harden Corporation uses the indirect method to depict cash flows. Indicate where, if at all, common stock issued for cash would be classified. a. Operating activities section. b. Investing activities section. c. Financing activities section. d. Does not represent a cash flow.

c. Financing activities section.

Harden Corporation engaged in the following transaction. Assume that the Harden Corporation uses the indirect method to depict cash flows. Indicate where, if at all, interest paid on note would be classified on the statement of cash flows. a. Operating activities section. b. Investing activities section. c. Financing activities section. d. Does not represent a cash flow.

c. Financing activities section.

Harden Corporation engaged in the following transaction. Assume that the Harden Corporation uses the indirect method to depict cash flows. Indicate where, if at all, long-term debt retired with cash would be classified on the statement of cash flows. a. Operating activities section. b. Investing activities section. c. Financing activities section. d. Does not represent a cash flow.

c. Financing activities section.

Harden Corporation engaged in the following transaction. Assume that the Harden Corporation uses the indirect method to depict cash flows. Indicate where, if at all, treasury stock purchased with cash would be classified on the statement of cash flows. a. Operating activities section. b. Investing activities section. c. Financing activities section. d. Does not represent a cash flow.

c. Financing activities section.

The payment of a cash dividend would be classified as a(n) a. operating activity. b. investing activity. c. financing activity. d. significant noncash activity.

c. financing activity.

Financing activities involve a. lending money. b. acquiring investments. c. issuing debt. d. acquiring long-lived assets.

c. issuing debt.

Cash receipts from interest and dividends are classified as a. financing activities. b. investing activities. c. operating activities. d. either financing or investing activities.

c. operating activities.

The primary purpose of the statement of cash flows is to a. provide information about the investing and financing activities during a period. b. prove that revenues exceed expenses if there is a net income. c. provide information about the cash receipts and cash payments during a period. d. facilitate banking relationships.

c. provide information about the cash receipts and cash payments during a period.

Wilma's Vegetable Market had the following transactions during 2012: 1. Issued $25,000 of par value common stock for cash. 2. Recorded and paid wages expense of $10,000. 3. Acquired land by issuing common stock of par value $50,000. 4. Declared and paid a cash dividend of $1,000. 5. Sold a long-term investment (cost $3,000) for cash of $3,000. 6. Recorded cash sales of $20,000. 7. Bought inventory for cash of $2,000. 8. Acquired an investment in IBM stock for cash of $6,000. 9. Converted bonds payable to common stock in the amount of $10,000. 10. Repaid a 6 year note payable in the amount of $11,000. What is the net cash provided by operating activities? a. $20,000. b. $18,000. c. $10,000. d. $8,000.

d. $8,000.

Which of the following is not typically a characteristic experienced by a company during the introductory phase of the corporate life cycle? a. Cash used in operations will exceed cash generated by operations. b. Considerable cash will be used to purchase productive assets. c. Cash from investing is positive. d. Cash from financing is positive.

d. Cash from financing is positive.

Harden Corporation engaged in the following transaction. Assume that the Harden Corporation uses the indirect method to depict cash flows. Indicate where, if at all, a stock dividend declared and issued would be classified on the statement of cash flows. a. Operating activities section. b. Investing activities section. c. Financing activities section. d. Does not represent a cash flow.

d. Does not represent a cash flow.

The issuance of debt to purchase assets would be classified as a(n) a. operating activity. b. investing activity. c. financing activity. d. none of the above.

d. none of the above.