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Exam 14: Statement of Cash Flows

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Question 71

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Zenith Corporation sells some of its used store fixtures.The acquisition cost of the fixtures is $12,500,the accumulated depreciation on these fixtures is $9,750 at the time of sale.The fixtures are sold for $5,300.The value of this transaction in the Investing section of the statement of cash flows is:

A) $12,500
B) $5,300
C) $2,750
D) $2,550

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

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Question 72

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Which of the following would not be found in a Schedule of Noncash Investing and Financing Activities,reported at the end of a Statement of Cash Flows?

A) equipment acquired in exchange for a note payable
B) bonds payable exchanged for capital stock
C) purchase of treasury stock
D) capital stock issued to acquire fixed assets

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

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Question 73

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Cash flows from financing activities,as part of the statement of cash flows,include payments for dividends.

Durrand Corporation's accumulated depreciation increased by $12,000,while patents decreased by $2,200 between consecutive balance sheet dates.There were no purchases or sales of depreciable or intangible assets during the year.In addition,the income statement showed a gain of $4,300 from sale of land.Reconcile a net income of $65,000 to net cash flow from operating activities.

Free cash flow is

A corporation uses the indirect method for preparing the Statement of Cash Flows.A fixed asset has been sold for $25,000 representing a gain of $4,500.The value in the operating activities section regarding this event would be:

Kennedy,Inc.reported the following data: Prepare the cash flows for operating activities under the indirect method as it would appear on the statement of cash flows.

Income tax was $175,000 for the year.Income tax payable was $30,000 and $40,000 at the beginning and end of the year.Cash payments for income tax reported on the cash flow statement using the direct method is

There is no difference in the Investing and Financing sections of the statement of cash flows using the indirect and direct method.

In preparing the cash flows from operating activities section of the statement of cash flows by the indirect method,the net decrease in inventories from the beginning to the end of the period is added to net income for the period.

The main disadvantage of the direct method of reporting cash flows from operating activities is that the necessary data are often costly to accumulate.

On the statement of cash flows,the cash flows from operating activities section would include

Land costing $71,000 was sold for $50,000 cash.The loss on the sale was reported on the income statement as other expense.On the statement of cash flows,what amount should be reported as an investing activity from the sale of land?

Investing activities include

The comparative balance sheet of Colson Company,for 2011 and the preceding year ended December 31,2010 appears below in condensed form: The income statement for the current year is as follows: Additional data for the current year are as follows: Prepare a statement of cash flows,using the direct method of reporting cash flows from operating activities.

On the basis of the following data for Grant Co.for 2011 and the preceding year ended December 31,2010,prepare a statement of cash flows.Use the indirect method of reporting cash flows from operating activities.Assume that equipment costing $125,000 was purchased for cash and equipment costing $85,000 with accumulated depreciation of $65,000 was sold for $15,000;that the stock was issued for cash;and that the only entries in the retained earnings account were net income of $56,000 and cash dividends declared of $18,000.

A building with a book value of $54,000 is sold for $63,000 cash Using the indirect method,this transaction should be shown on the statement of cash flows as follows:

On the basis of the following data for Branch Co.for the year ended December 31,2011 and the preceding year,prepare a statement of cash flows using the indirect method of reporting cash flows from operating activities. Assume that equipment costing $125,000 was purchased for cash and the land was sold for $15,000.The stock was issued for cash and the only entries in the retained earnings account were net income of $56,000 and cash dividends declared and paid of $18,000.

Preferred stock issued in exchange for land would be reported in the statement of cash flows in

The following information is available from the current period financial statements: The net cash flow from operating activities using the indirect method is