LS assignment Chapter 11

Carola Inc. issues common stock for $20 million and pays dividends of $2 million. Net cash flows from financing activities will be:

18 million

Match the cash flows with investing activities.

cash inflow- sale of equipment cash outflow- purchase of investment

Indicate whether each item is a cash inflow or a cash outflow from operating activities.

cash inflow- sale of services, collection on account cash outflow- payment of salaries, payment on account

The direct method for preparing the statement of cash flows reports cash inflows and outflows from operations such as:

cash received from customers, payments for inventory

Which of the following represents the final step in preparing a statement of cash flows in the correct order?

combine operating, investing, and financing activities

True or false: When presenting the operating activities section of the statement of cash flows, the direct method starts with net income and adjusts it by eliminating the effects of transactions that do not involve cash. The indirect method reports the total cash inflow or cash outflow from each main type of transaction.

false

Diamond company's land account decrease by 10 million. Cash received from sale of land

may be higher or lower than $10 million

Transactions reported on the statement of cash flows that do not increase or decrease cash, but that result in significant investing and financing activities are referred to as _ activities.

noncash

Using information available on the income statement and changes in current assets and current liabilities we can derive cash flows from

operating

Which of the following are common financing activities involving the outflow of cash?

purchasing the company's own shares payment of cash dividends

Which of the following are cash outflows from financing activities?

repay borrowing from bank pay dividends

Which of the following transactions would be classified as financing activities in the statement of cash flows?

repayment of a long-term loan payment of cash dividends

Which of the following cash transactions are classified as cash inflows from investing activities?

sale of building sale of held-to- maturity investments sale of equipmentIndi

Which of the following transactions would be classified as financing activities in the statement of cash flows?

sale of the company's common stock issuance of bonds repurchase of the company's own common stock

true or false: if a company chooses to prepare the operating section of the statement of cash flows using the direct method, it must also report using the indirect method.

true

During the current period, Schmidt Corp. sold equipment for $1,000, purchases new equipment for $10,000, paid an accounts payable balance of $2,500, and sold an investment costing $2,000 for $2,800. Net cash from investing activities is (indicate the amount and whether it is a net inflow or outflow)

6200 net outflow

Ranier corp. has the following information: what is the net flow from investing activities?

70,000 sale of building-purchase of land

which of the following transactions would be classified as financing activities in the statement of cash flows?

payment of cash dividends, repayment of a long-term loan

Colter corp. has the following information: What is the net cash flow from investing activities?

($60,000) (10000-100000 30000=-60000

Roberts Inc. sells common stock for $10 million and pays dividends of $1 million. Net cash flows from financing activities will be:

9 million

Which of the following items are classified as cash inflows from operating activities on the statement of cash flows?

Receipt of interest and collection from customers.

Cash inflows and outflows involving stockholders and creditors are classified on the statement of cash flows as _ activities.

financing

Repayments of formal, long-term debt contracts are classified as _ activities.

financing

Salary expense is $50,000 for the period. The beginning balance in salaries payable is $5,000, and the ending balance is $3,000. What is the amount of salaries paid during the period?

52,000 (5000-3000+50000=52000)