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Cash payments to repay the principal amount of debt are reported as a cash outflow in the investing activities section of the statement of cash flows.

A) True
B) False

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Krech Corporation's comparative balance sheet appears below: Krech Corporation's comparative balance sheet appears below: The company's net income (loss) for the year was ($3,000) and its cash dividends were $3,000.It did not sell or retire any property,plant,and equipment during the year.The company uses the indirect method to determine the net cash provided by operating activities. Which of the following is correct regarding the operating activities section of the statement of cash flows? A) The change in Prepaid Expenses will be added to net income;The change in Income Taxes Payable will be subtracted from net income B) The change in Prepaid Expenses will be subtracted from net income;The change in Income Taxes Payable will be subtracted from net income C) The change in Prepaid Expenses will be subtracted from net income;The change in Income Taxes Payable will be added to net income D) The change in Prepaid Expenses will be added to net income;The change in Income Taxes Payable will be added to net income The company's net income (loss) for the year was ($3,000) and its cash dividends were $3,000.It did not sell or retire any property,plant,and equipment during the year.The company uses the indirect method to determine the net cash provided by operating activities. Which of the following is correct regarding the operating activities section of the statement of cash flows?


A) The change in Prepaid Expenses will be added to net income;The change in Income Taxes Payable will be subtracted from net income
B) The change in Prepaid Expenses will be subtracted from net income;The change in Income Taxes Payable will be subtracted from net income
C) The change in Prepaid Expenses will be subtracted from net income;The change in Income Taxes Payable will be added to net income
D) The change in Prepaid Expenses will be added to net income;The change in Income Taxes Payable will be added to net income

E) B) and D)
F) None of the above

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Krech Corporation's comparative balance sheet appears below: Krech Corporation's comparative balance sheet appears below: The company's net income (loss) for the year was ($3,000) and its cash dividends were $3,000.It did not sell or retire any property,plant,and equipment during the year.The company uses the indirect method to determine the net cash provided by operating activities. Which of the following is correct regarding the operating activities section of the statement of cash flows? A) The change in Accounts Payable will be added to net income;The change in Accrued Liabilities will be subtracted from net income B) The change in Accounts Payable will be subtracted from net income;The change in Accrued Liabilities will be added to net income C) The change in Accounts Payable will be subtracted from net income;The change in Accrued Liabilities will be subtracted from net income D) The change in Accounts Payable will be added to net income;The change in Accrued Liabilities will be added to net income The company's net income (loss) for the year was ($3,000) and its cash dividends were $3,000.It did not sell or retire any property,plant,and equipment during the year.The company uses the indirect method to determine the net cash provided by operating activities. Which of the following is correct regarding the operating activities section of the statement of cash flows?


A) The change in Accounts Payable will be added to net income;The change in Accrued Liabilities will be subtracted from net income
B) The change in Accounts Payable will be subtracted from net income;The change in Accrued Liabilities will be added to net income
C) The change in Accounts Payable will be subtracted from net income;The change in Accrued Liabilities will be subtracted from net income
D) The change in Accounts Payable will be added to net income;The change in Accrued Liabilities will be added to net income

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

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Klutz Dance Studio had net income of $167,000 for the year just ended.Klutz collected the following additional information to prepare its statement of cash flows for the year: Klutz Dance Studio had net income of $167,000 for the year just ended.Klutz collected the following additional information to prepare its statement of cash flows for the year: Klutz uses the indirect method to prepare its statement of cash flows.What is Klutz's net cash provided (used) by operating activities? A) $95,000 B) $137,000 C) $185,000 D) $207,000 Klutz uses the indirect method to prepare its statement of cash flows.What is Klutz's net cash provided (used) by operating activities?


A) $95,000
B) $137,000
C) $185,000
D) $207,000

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

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Which of the following would be considered a cash inflow in the financing activities section of the statement of cash flows?


A) Issuing bonds payable.
B) Receiving cash from customers.
C) Sale of equipment.
D) Collection of a loan made to another company.

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

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Burns Corporation's net income last year was $91,000.Changes in the company's balance sheet accounts for the year appear below: Burns Corporation's net income last year was $91,000.Changes in the company's balance sheet accounts for the year appear below: The company did not dispose of any property,plant,and equipment,sell any long-term investments,issue any bonds payable,or repurchase any of its own common stock during the year.The company declared and paid a cash dividend of $4,000. Required: a.Construct in good form the operating activities section of the company's statement of cash flows for the year.(Use the indirect method. ) b.Construct in good form the investing activities section of the company's statement of cash flows for the year. c.Construct in good form the financing activities section of the company's statement of cash flows for the year. The company did not dispose of any property,plant,and equipment,sell any long-term investments,issue any bonds payable,or repurchase any of its own common stock during the year.The company declared and paid a cash dividend of $4,000. Required: a.Construct in good form the operating activities section of the company's statement of cash flows for the year.(Use the indirect method. ) b.Construct in good form the investing activities section of the company's statement of cash flows for the year. c.Construct in good form the financing activities section of the company's statement of cash flows for the year.

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a.Operating activiti...

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Stone Retail Corporation's most recent comparative Balance Sheet is as follows: Stone Retail Corporation's most recent comparative Balance Sheet is as follows: Stone's net income was $46,000.No equipment was sold or purchased.Cash dividends of $40,000 were declared and paid.Stone uses the indirect method to prepare its statement of cash flows. What is Stone's net cash provided by (used in) financing activities? A) ($20,000) B) ($15,000) C) $5,000 D) $65,000 Stone's net income was $46,000.No equipment was sold or purchased.Cash dividends of $40,000 were declared and paid.Stone uses the indirect method to prepare its statement of cash flows. What is Stone's net cash provided by (used in) financing activities?


A) ($20,000)
B) ($15,000)
C) $5,000
D) $65,000

E) A) and D)
F) C) and D)

Correct Answer

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Stone Retail Corporation's most recent comparative Balance Sheet is as follows: Stone Retail Corporation's most recent comparative Balance Sheet is as follows: Stone's net income was $46,000.No equipment was sold or purchased.Cash dividends of $40,000 were declared and paid.Stone uses the indirect method to prepare its statement of cash flows. What is Stone's net cash provided by (used in) investing activities? A) $0 B) ($15,000) C) $25,000 D) $45,000 Stone's net income was $46,000.No equipment was sold or purchased.Cash dividends of $40,000 were declared and paid.Stone uses the indirect method to prepare its statement of cash flows. What is Stone's net cash provided by (used in) investing activities?


A) $0
B) ($15,000)
C) $25,000
D) $45,000

E) All of the above
F) None of the above

Correct Answer

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Financial statements of Rukavina Corporation follow: Financial statements of Rukavina Corporation follow: Cash dividends were $8.The company did not dispose of any property,plant,and equipment.It did not issue any bonds payable or repurchase any of its own common stock.The following questions pertain to the company's statement of cash flows. The net cash provided by (used in) operating activities for the year was: A) $21 B) $75 C) $27 D) $69 Financial statements of Rukavina Corporation follow: Cash dividends were $8.The company did not dispose of any property,plant,and equipment.It did not issue any bonds payable or repurchase any of its own common stock.The following questions pertain to the company's statement of cash flows. The net cash provided by (used in) operating activities for the year was: A) $21 B) $75 C) $27 D) $69 Cash dividends were $8.The company did not dispose of any property,plant,and equipment.It did not issue any bonds payable or repurchase any of its own common stock.The following questions pertain to the company's statement of cash flows. The net cash provided by (used in) operating activities for the year was:


A) $21
B) $75
C) $27
D) $69

E) A) and C)
F) C) and D)

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The following transactions occurred last year at Jolly Corporation: The following transactions occurred last year at Jolly Corporation: Based solely on the above information,the net cash provided by financing activities for the year on the statement of cash flows would be: A) $179,000 B) $59,000 C) ($109,000) D) $46,000 Based solely on the above information,the net cash provided by financing activities for the year on the statement of cash flows would be:


A) $179,000
B) $59,000
C) ($109,000)
D) $46,000

E) B) and D)
F) None of the above

Correct Answer

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When a company pays cash to repurchase its own common stock,this is reported as a cash outflow in the financing activities section of the statement of cash flows.

A) True
B) False

Correct Answer

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Excerpts from Neuwirth Corporation's comparative balance sheet appear below: Excerpts from Neuwirth Corporation's comparative balance sheet appear below: Which of the following is the correct treatment within the operating activities section of the statement of cash flows using the indirect method? A) The change in Accounts Receivable is added to net income;The change in Inventory is added to net income B) The change in Accounts Receivable is added to net income;The change in Inventory is subtracted from net income C) The change in Accounts Receivable is subtracted from net income;The change in Inventory is subtracted from net income D) The change in Accounts Receivable is subtracted from net income;The change in Inventory is added to net income Which of the following is the correct treatment within the operating activities section of the statement of cash flows using the indirect method?


A) The change in Accounts Receivable is added to net income;The change in Inventory is added to net income
B) The change in Accounts Receivable is added to net income;The change in Inventory is subtracted from net income
C) The change in Accounts Receivable is subtracted from net income;The change in Inventory is subtracted from net income
D) The change in Accounts Receivable is subtracted from net income;The change in Inventory is added to net income

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

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Paying interest to lenders is classified as an operating activity on the statement of cash flows.

A) True
B) False

Correct Answer

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The Warrel Corporation reported the following data for last year: The Warrel Corporation reported the following data for last year: Based solely on this information,the net cash provided (used) by financing activities on the statement of cash flows would be: A) $12,000 B) $34,000 C) ($12,000) D) ($18,000) Based solely on this information,the net cash provided (used) by financing activities on the statement of cash flows would be:


A) $12,000
B) $34,000
C) ($12,000)
D) ($18,000)

E) A) and B)
F) A) and D)

Correct Answer

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Insurance and utility expenses are considered operating activities on the statement of cash flows.

A) True
B) False

Correct Answer

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Megan Corporation's net income last year was $98,000.Changes in the company's balance sheet accounts for the year appear below: Megan Corporation's net income last year was $98,000.Changes in the company's balance sheet accounts for the year appear below: The company paid a cash dividend of $36,000 and it did not dispose of any long-term investments or property,plant,and equipment.The company did not issue any bonds payable or repurchase any of its own common stock.The following questions pertain to the company's statement of cash flows. The net cash provided by (used in) investing activities last year was: A) $115,000 B) ($115,000) C) $135,000 D) ($135,000) The company paid a cash dividend of $36,000 and it did not dispose of any long-term investments or property,plant,and equipment.The company did not issue any bonds payable or repurchase any of its own common stock.The following questions pertain to the company's statement of cash flows. The net cash provided by (used in) investing activities last year was:


A) $115,000
B) ($115,000)
C) $135,000
D) ($135,000)

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

Correct Answer

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Financial statements of Rukavina Corporation follow: Financial statements of Rukavina Corporation follow: Cash dividends were $8.The company did not dispose of any property,plant,and equipment.It did not issue any bonds payable or repurchase any of its own common stock.The following questions pertain to the company's statement of cash flows. The net cash provided by (used in) financing activities for the year was: A) ($8) B) ($44) C) ($51) D) $1 Financial statements of Rukavina Corporation follow: Cash dividends were $8.The company did not dispose of any property,plant,and equipment.It did not issue any bonds payable or repurchase any of its own common stock.The following questions pertain to the company's statement of cash flows. The net cash provided by (used in) financing activities for the year was: A) ($8) B) ($44) C) ($51) D) $1 Cash dividends were $8.The company did not dispose of any property,plant,and equipment.It did not issue any bonds payable or repurchase any of its own common stock.The following questions pertain to the company's statement of cash flows. The net cash provided by (used in) financing activities for the year was:


A) ($8)
B) ($44)
C) ($51)
D) $1

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

Correct Answer

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Dukas Corporation's net cash provided by operating activities was $218,000;its net income was $203,000;its capital expenditures were $146,000;and its cash dividends were $49,000. Required: Determine the company's free cash flow.

Correct Answer

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Free cash flow = Net cash from...

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Investing activities on the statement of cash flows generate cash inflows and outflows related to borrowing from and repaying principal to creditors and completing transactions with the company's owners such as selling or repurchasing shares of common stocks and paying dividends.

A) True
B) False

Correct Answer

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Randal Corporation recorded the following activity for the year just ended: Randal Corporation recorded the following activity for the year just ended: The net cash provided by financing activities for the year was: A) $100,000 B) $550,000 C) $180,000 D) $680,000 The net cash provided by financing activities for the year was:


A) $100,000
B) $550,000
C) $180,000
D) $680,000

E) All of the above
F) A) and B)

Correct Answer

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