Accounting final
Determine if the following are operating, investing, financing, or noncash activities Equipment is purchased by signing a 3-year, 10% note payable
non cash
Land acquired from the issuance of common stock is reported
In a separate schedule at the bottom of the statement
Which of the following transactions would not be classified as a financing activity?
Purchase of a long-term investment in bonds
The statement of cash flows will not provide insight into
The exact proceeds of a future bond issue
Hogan enterprises reported cash from operating of $275,000. The company made capital expenditures of $110,000 and paid dividends of $35,000. Compute free cash flow.
$275,000 - $110,000 - $35,000 = $130,000
Madison Co issued common stock for proceeds for $20,000 during 2014. Company paid dividends for $5,000. Company issued a long term note payable for $35,000 in exchange for equipment during the year. Company sold treasury stock that had a cost of $3,000 for $9,000. Compute net cash flow from financing activity.
20000 - 5000 + 9000 = 24000
Investing activities include
Collecting cash on loans made
A primary objective of the statement of cash flows is to show the income or loss on investing and financing transactions
False
Cash flows from investing activities is considered the most important category on the statement of cash flows because it is considered the best measure of expected income.
False
Determine if the following are operating, investing, financing, or non cash activities Common stock is sold for cash above par value
Financing
Determine if the following are operating, investing, financing, or noncash activities Bonds payable are issued for cash at a discount
Financing
Determine if the following are operating, investing, financing, or noncash activities 100 shares of XYZ Corporation common stock are purchased for cash
Investing
Determine if the following are operating, investing, financing, or noncash activities Land is sold for cash at book value
Investing
The statement of cash flows
Is prepared from comparative income statements
Financing activities involve
Issuing debt
Financing activities include
Long-term liability and owners' equity items
Determine if the following are operating, investing, financing, or noncash activities Cash dividends on common stocks are declared unpaid
Non Cash
Determine if the following are operating, investing, financing, or noncash activities Bonds payable are converted into common stock
Non cash
Determine if the following are operating, investing, financing, or noncash activities Accounts payable are paid in cash
Operating
Determine if the following are operating, investing, financing, or noncash activities Interest receivable on a short-term note receivable is collected
Operating
Determine if the following are operating, investing, financing, or noncash activities Merchandise is sold to customers for cash
Operating
Generally, the most important category on the statement of cash flows is cash flows from
Operating activities
The order of presentation of activities on the statement of cash flows is
Operating, investing, and financing
Free cash flow equals cash provided by
Operations less capital expenditures and cash dividends
The statement of cash flows is a required statement that must be prepared along with and income statement, balance sheet, and retained earnings statement.
True
