Ac CH. 17

Accounts receivable arising from sales to customers amounted to $86,000 and $77,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $290,000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows is $299,000. $213,000. $290,000. $280,000.

$299,000.

Vision Company purchased treasury stock with a cost of $16,000 during 2020. During the year, the company paid dividends of $20,000 and issued bonds payable for proceeds of $860,000. Cash flows from financing activities for 2020 total $840,000 net cash inflow. $860,000 net cash outflow. $856,000 net cash inflow. $824,000 net cash inflow.

$824,000 net cash inflow.

In Jude Company, land decreased $150,000 because of a cash sale for $150,000, the equipment account increased $60,000 as a result of a cash purchase, and Bonds Payable increased $120,000 from issuance for cash at face value. The net cash provided by investing activities is $150,000. $210,000. $90,000. $270,000.

$90,000.

Which one of the following items is not necessary in preparing a statement of cash flows? Determine the change in cash Determine the cash provided by operations Determine the cash in all bank accounts Determine cash from financing and investing activities

Determine the cash in all bank accounts

Indicate where the issuance of common stock issued for cash would appear, if at all, on the indirect statement of cash flows. Operating activities section Does not represent a cash flow Financing activities section Investing activities section

Financing activities section

Indicate where the purchase of land for cash would appear, if at all, on the indirect statement of cash flows. Investing activities section Financing activities section Does not represent a cash flow Operating activities section

Investing activities section

Which of the following transactions does not affect cash during a period? Exercise of the call option on bonds payable Collection of an accounts receivable Write-off of an uncollectible account Sale of treasury stock

Write-off of an uncollectible account

The acquisition of land by issuing common stock is a cash transaction and would be reported in the body of a statement of cash flows. a noncash transaction and would be reported in the body of a statement of cash flows. a noncash transaction which is not reported in the body of a statement of cash flows. only reported if the statement of cash flows is prepared using the direct method.

a noncash transaction which is not reported in the body of a statement of cash flows.

Lending money and collecting the loans are financing activities. investing activities. Non-cash investing and financing activities. operating activities.

investing activities.

Financing activities involve acquiring long-lived assets. acquiring investments. lending money. issuing debt.

issuing debt.

If a company reports a net loss on the income statement, it may still have a net increase in cash. will not be able to get a loan. will not be able to make capital expenditures. will not be able to pay cash dividends

may still have a net increase in cash.

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

operating activities.

Generally, the most important category on the statement of cash flows is cash flows from financing activities. operating activities. significant noncash activities. investing activities.

operating activities.

The statement of cash flows summarizes the operating, financing, and investing activities of an entity. must be prepared on a daily basis. is a special section of the income statement. is another name for the income statement.

summarizes the operating, financing, and investing activities of an entity.

Significant noncash transactions would not include exchange of plant assets. treasury stock acquisition. conversion of bonds into common stock. asset acquisition through bond issuance.

treasury stock acquisition.