Accounting final

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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


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