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Exam 13: Statement of Cash Flows

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Question 1

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The statement of cash flows is prepared from all of the following except

A) the adjusted trial balance.
B) comparative balance sheets.
C) selected transaction data.
D) the current income statement.

E) B) and C)
F) A) and B)

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Question 2

Multiple Choice

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Ware Company had purchases of $260,000. The comparative balance sheet analysis revealed a $15,000 decrease in inventory and a $25,000 increase in accounts payable. What were Ware's cash payments to suppliers?

A) $235,000
B) $220,000
C) $275,000
D) $300,000

E) B) and D)
F) B) and C)

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Question 3

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Squeeze Company reports the following: End of Year Beginning of Year Inventory $25,000 $42,000 Accounts Payable 22,000 12,000 If cost of goods sold for the year is $220,000, the amount of cash paid to suppliers is

During 2017, Zuma Company had $150,000 in cash sales and $1,240,000 in credit sales. The accounts receivable balances were $180,000 and $215,000 at December 31, 2016 and 2017, respectively. Using the direct method of reporting cash flows from operating activities, what was the total cash collected from all customers during 2017?

Using the indirect method, an increase in accounts receivable during a period is deducted from net income in calculating cash provided by operations.

Financing activities include the obtaining of cash from issuing debt and repaying the amounts borrowed.

Gonzo Company reports a $25,000 increase in inventory and a $12,000 decrease in accounts payable during the year. Cost of Goods Sold for the year was $185,000. Using the direct method of reporting cash flows from operating activities, cash payments made to suppliers were

Operating expenses + an increase in prepaid expenses - a decrease in accrued expenses payable = cash payments for operating expenses.

For external reporting, a company must prepare either an income statement or a statement of cash flows, but not both.

Using the indirect method, an increase in accounts payable during a period is deducted from net income in calculating cash provided by operations.

Cash provided by operating activities fails to take into account that a company must invest in new fixed assets just to maintain its current level of operations.

In the Buans Company, land decreased $80,000 because of a cash sale for $80,000, the equipment account increased $35,000 as a result of a cash purchase, and Bonds Payable increased $60,000 from an issuance for cash at face value. The net cash provided by investing activities is

If accounts payable have increased during a period,

Which of the following items does not appear in the statement of cash flows under the direct method?

In preparing net cash flow from operating activities using the direct method, each item in the income statement is adjusted from the accrual basis to the cash basis.

If accounts receivable have increased during the period,

Vision Company purchased treasury stock with a cost of $16,000 during 2017. During the year, the company paid dividends of $20,000 and issued bonds payable for proceeds of $860,000. Cash flows from financing activities for 2017 total

Generally, the most important category on the statement of cash flows is cash flows from

Which of the following would be added to net income using the indirect method?

During the year, Income Tax Expense amounted to $30,000 and Income Taxes Payable increased by $4,000; therefore, the cash paid for income taxes was $26,000.