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Exam 12: Reporting Cash Flows

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Question 101

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A company reported operating cash flows in Year 1 of $33,100 and $26,220 in Year 2.Its average total assets in Year 1 were $262,000 and $313,000 in Year 2.Calculate the cash flow on total assets ratio for both years.Comment on the results.

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Question 102

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For each of the following separate cases,use the information provided to calculate the missing cash inflow or cash outflow using the direct method.

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Question 103

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Based on the following information provided about a company's operations,calculate its cost of goods purchased and its cash paid for merchandise.

For each of the following independent cases,use the information provided to calculate the missing cash inflow or cash outflow using the direct method.

Stormer Company reports the following amounts on its statement of cash flow: Net cash provided by operating activities was $28,000; net cash used in investing activities was $10,000 and net cash used in financing activities was $12,000.If the beginning cash balance is $5,000,what is the ending cash balance?

The following transactions and events occurred during the year.Assuming that this company uses the indirect method to report cash provided by operating activities,indicate where each item would appear on its statement of cash flows by placing an x in the appropriate column.

When preparing the operating activities section of the statement of cash flows using the indirect method,expenses with no cash outflows are added back to net income.

Alfredo Inc.reports net income of $230,000 for the year ended December 31.It also reports $87,700 depreciation expense and a $5,000 gain on the sale of equipment.Its comparative balance sheet reveals a $35,500 decrease in accounts receivable,a $15,750 increase in accounts payable,and a $12,500 decrease in wages payable.Calculate the cash provided (used) in operating activities using the indirect method.

The following information is available for the Brookstone Company: Additional information: (1)There was no gain or loss on the sales of the long-term investments,nor on the bonds retired. (2)Old machinery with an original cost of $45,060 was sold for $2,520 cash. (3)New machinery was purchased for $81,060 cash. (4)Cash dividends of $40,320 were paid. (5)Additional shares of stock were issued for cash. Prepare a complete statement of cash flows for Year 2 using the indirect method.

The cash flow on total assets ratio is not affected by accounting recognition and measurement.

Tate Company's current year income statement and changes in selected balance sheet accounts are given below.Calculate the company's net cash provided or used by operating activities using the direct method. The company also experienced the following during the current year:

Based on the information provided below for Krackle Corp.,complete the following worksheet to be used to prepare the statement of cash flows using the indirect method. (a)Net income for the year was $30,000. (b)Dividends of $10,000 were declared and paid. (c)Krackle's only noncash expense was depreciation which totaled $50,000. (d)The company purchased plant assets for $70,000. (e)Notes payable in the amount of $40,000 were issued during the year for cash.

A corporation reported average total assets in Year 1 of $397,350 and $440,800 in Year 2.Its net operating cash flow for Year 1 was $35,667 and $35,790 for Year 2.Calculate the cash flow on total assets ratio for both years.Comment on the results.

Noncash investing and financing activities may be disclosed in:

Which of the following items is reported on the statement of cash flows under financing activities?

A cash equivalent must be readily convertible to a known amount of cash,and must be sufficiently close to its maturity so its market value is unaffected by interest rate changes.

Analysis reveals that a company had a net increase in cash of $20,000 for the current year.Net cash provided by operating activities was $18,000; net cash used in investing activities was $10,000 and net cash provided by financing activities was $12,000.If the year-end cash balance is $24,000,the beginning cash balance was:

Managers primarily use the statement of cash flows to determine the amount of the company's assets relative to the amount of its debt.

The direct method separately lists operating cash receipts,such as cash received from customers.

The cash flow on total assets ratio: