Chapter 14

Mountain Water Corp. issued common stock of​ $28,000 to pay off​ long-term notes payable of ​$28,000. In what​ section(s) would these transactions be​ recorded?

C) Non-Cash investing and financing activities, $28,000

Which item does not appear on a statement of cash flows prepared by the indirect method? a) collections from customers b) depreciation expense c) net income d) gain on sale of land

a) collections from customers

If accrued liabilities increased during the year, which of the following is correct when using a spreadsheet to complete thr statement of cash flows (indirect method)?

a) increase in accrued liabilities would be debited

Operating activities are most closely related to

b) current assets and current liabilities

Holmes Inc. expects net cash flow from operating activities to be $160,000, and the company plans purchases of equipment of $83,000 and repurchases of stock of $24,000. What is Holme's free cash flow?

c) $77,000

The plant assets account and accumulated depreciation - plant assets account of star media show the following Beg. 100,000 Acquisitions 428,000 | 52,500 Disposals __________________________________________________________ End. 475,500 Accumulated Depreciation - Plant Assets Disposals 10,500 | 20,000 12/31/2015 34,000 Depr. Exp. ___________________________ 43,500 12/31/2016 Star Media sold plant assets at an $11,000 loss. Where on the statement of cash flows should star media report the sale of plant assets? How much should the business report for the sale?

c) Investing cash flows - cash receipt of $42,000

Leather shop earned net income of $57,000 after deducting depreciation of $5,000 and all other expenses. Current assets decreased by $4,000, and current liabilities increased by $8,000. How much was Leather Shop's cash provided by operating activities (indirect method)?

d) $74,000

Maxwell Furniture Center had accounts receivable of $20,000 at the beginning of the year and $54,000 at year-end. Revenue for the year totaled $116,000. How much cash did the business collect from customers?

d) $82,000

The purposes of the statement of cash flows are to a) evaluate management decisions b) determine ability to pay debts and dividends c) predict future cash flows d) all of the above

d) all of the above

The main categories of cash flow activities are

d) operating, investing, financing