Accounting Chapter 12

If a loss of $106000 is incurred in selling (for cash) a building having a book value of $784000, the total amount reported in the cash flows from investing activities section of the statement of cash flows is $106000. $890000. $678000. $784000.

$678000.

Assume that the E-Zip Corporation uses the indirect method to depict cash flows. Indicate where, if at all, common stock issued for cash would be classified. Investing activities section. Financing activities section. Operating activities section. Does not represent a cash flow.

Financing activities section.

All of the following adjustments would be deducted in determining net cash provided by operating activities except a(n) increase in inventories. depreciation expense. gain on disposal of plant assets. decrease in accrued expenses payable.

depreciation expense.

All of the following statements about free cash flow are false except free cash flow is not reported on the statement of cash flows. significant free cash flow indicates less potential to pay additional dividends. significant free cash flow indicates less potential to finance new investment. free cash flow is most commonly calculated by subtracting capital expenditures from cash provided by operations and then adding cash dividends.

free cash flow is not reported on the statement of cash flows

Starting with net income and adjusting it for items that affected reported net income but which did not affect cash is called the indirect method. cost-benefit method. working capital method. direct method.

indirect method.

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

issuing debt

The indirect and direct methods of preparing the statement of cash flows are identical except for the financing activities section. operating activities section. significant noncash activity section. investing activities section.

operating activities section.

Ayayai Corp. reported a net loss of $11280 for the year ended December 31, 2017. During the year, accounts receivable decreased $26320, inventory increased $18800, accounts payable increased by $28200, and depreciation expense of $22560 was recorded. During 2017, operating activities provided net cash of $69560. used net cash of $13160. used net cash of $47000. provided net cash of $47000

provided net cash of $47000.

Blue Spruce Corp. reported net income of $117000 for the year. During the year, accounts receivable increased by $7800, accounts payable decreased by $5200 and depreciation expense of $13000 was recorded. Net cash provided by operating activities for the year is $104000. $130000. $106600. $117000.

$117000

Ayayai Corp. reported net income of $281000 for the year. During the year, accounts receivable increased by $20000, accounts payable decreased by $9000 and depreciation expense of $44000 was recorded. Net cash provided by operating activities for the year is $266000. $250000. $281000. $296000.

$296000

Land costing $105000 was sold for $298200 cash. The gain on the sale was reported on the income statement as other income. On the statement of cash flows, what amount should be reported as an investing activity from the sale of land? $193200. $298200. $130200. $260400.

$298200.

Assume that the Quinn Corporation uses the indirect method to depict cash flows. Indicate where, if at all, dividends received on securities held would be classified on the statement of cash flows. Does not represent a cash flow. Financing activities section. Operating activities section. Investing activities section.

Operating activities section.

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

Operating activities section.

In addition to the three basic financial statements, which of the following is also a required financial statement? The Cash Reconciliation. The Cash Budget. Statement of Cash Inflows and Outflows. Statement of Cash Flows.

Statement of Cash Flows

Which of the following transactions does not affect cash during a period? Write-off of an uncollectible account. Redeeming bonds before maturity. Collection of an accounts receivable. Sale of treasury stock.

Write-off of an uncollectible account.

In calculating cash flows from operating activities using the indirect method, a loss on the sale of equipment is not reported on a statement of cash flows. deducted from net income. ignored because it does not affect cash. added to net income.

added to net income.

On the statement of cash flows, the cash flows from operating activities section would be affected by payments for the acquisition of investments. cash receipts from sales activities. receipts from the issuance of capital stock. receipts from the sale of investments.

cash receipts from sales activities.

In calculating net cash provided by operating activities using the indirect method, an increase in prepaid expenses during a period is ignored because it does not affect income. deducted from net income. ignored because it does not affect expenses. added to net income.

deducted from net income.