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Exam 17: Statement of Cash Flows

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Question 81

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The income statement for Jones Company showed cost of goods sold of $80000 and operating expenses of $65000. The comparative balance sheets for the year show that inventory decreased $5000 prepaid expenses increased $7000 accounts payable increased $3000 and accrued expenses payable decreased $5000. Instructions Compute (a) cash payments to suppliers and (b) cash payments for operating expenses using the direct method.

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(a) Cash payments to suppliers...

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Question 82

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Under the direct method the formula for computing cash collections from customers is sales revenues plus the increase in accounts receivable or minus the decrease in accounts receivable.

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Question 83

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The sale of equipment at less than its book value is a(n) ______________ of cash that is reported in the ______________ activities section.

In developing the cash flows from operating activities most companies in the U. S.

Wayne Company reported net income of $265000 for 2016. Wayne also reported depreciation expense of $45000 and a loss of $8000 on the sale of equipment. The comparative balance sheet shows a decrease in accounts receivable of $15000 for the year a $17000 increase in accounts payable and a $6000 decrease in prepaid expenses. Instructions Prepare the operating activities section of the statement of cash flows for 2016. Use the indirect method.

A loss on sale of equipment is added to net income in determining cash provided by operations under the indirect method.

The change in cash is equal to the change in liabilities less the change in equity plus the change in noncash assets.

Which of the following transactions does not affect cash during a period?

The statement of cash flows

The acquisition of land by issuing common stock is

Classify each of the following as a(n):

Each of the following are particularly interested in the statement of cash flows except

Indicate where the purchase of land for cash would appear if at all on the indirect statement of cash flows.

Marke Inc. had cash sales of $400000 and credit sales of $1150000. The accounts receivable balance increased $30000 during the year. How much cash did Marke receive from its customers during the year?

Each of the following would be reported under operating activities except cash receipts

On the statement of cash flows using the indirect method patent amortization expense will

The cost of goods sold during the year was $183000. Merchandise inventory decreased by $8000 during the year and accounts payable decreased by $4000 during the year. Using the direct method of reporting cash flows from operating activities cash payments for merchandise total

Planner Corporation's comparative balance sheets are presented below. $\begin{array}{c}\text { PLANNER CORPORATION }\\\text { Comparative Balance Sheets }\\\text { December 31}\\\begin{array}{lrr}&2017&2016\\\text { Cash } & \$ 21,570 & \$ 10,700 \\\text { Accounts receivable } & 18,200 & 23,400 \\\text { Land } & 18,000 & 26,000 \\\text { Building } & 70,000 & 70,000 \\\text { Accumulated depreciation } & \underline{(15,000)} & \underline{(10,000)} \\\quad \text { Total } & \underline{\$ 112,770} & \underline{\$ 120,100} \\\\\text { Accounts payable } & \$ 12,370 & \$ 31,100 \\\text { Common stock } & 75,000 & 69,000 \\\text { Retained earnings } & \underline{25,400} & \underline{20,000} \\\quad \text { Total } & \underline{\underline{\$ 112,770}} & \underline{\underline{120, 100}}\end{array}\end{array}$ Additional information: 1. Net income was $27900. Dividends declared and paid were $22500. 2. All other changes in noncurrent account balances had a direct effect on cash flows except the change in accumulated depreciation. The land was sold for $5900. Instruction (a) Prepare a statement of cash flows for 2017 using the indirect method. (b) Compute free cash flow.

Adama Company reported a net loss of $6000 for the year ended December 31 2016. During the year accounts receivable increased $15000 merchandise inventory decreased $12000 accounts payable decreased by $20000 and depreciation expense of $12000 was recorded. During 2016 operating activities

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.