Question 1

A company reported that its bonds with a par value of $50,000 and a carrying value of $57,000 are retired for $60,000 cash,resulting in a loss of $3,000.The amount to be reported under cash flows from financing activities is:
A)$(3,000).
B)$(60,000).
C)$(57,000).
D)$7,000.
E)$(7,000).

Accepted Answer

The amount reported under cash flows from financing activities is the cash paid to retire the bonds, which is $60,000. This reflects the outflow of cash from the company to retire its debt, regardless of the loss or gain on retirement.

Question 2

A company's income statement showed the following: net income,$134,000; depreciation expense,$30,000; and gain on sale of plant assets,$4,000.An examination of the company's current assets and current liabilities showed the following changes as a result of operating activities: accounts receivable decreased $9,400; merchandise inventory increased $18,000; prepaid expenses increased $6,200; accounts payable increased $3,400.Calculate the net cash provided or used by operating activities.
A)$156,600.
B)$141,000.
C)$96,600.
D)$148,600.
E)$88,600.

Accepted Answer

To calculate the net cash provided by operating activities, start with the net income and adjust for non-cash expenses and changes in working capital:1. Start with net income: $134,0002. Add back non-cash expense (depreciation): $30,0003. Subtract gain on sale of plant assets (since it's a non-operating activity): -$4,0004. Adjust for changes in current assets and liabilities:   - Decrease in accounts receivable (cash inflow): $9,400   - Increase in inventory (cash outflow): -$18,000   - Increase in prepaid expenses (cash outflow): -$6,200   - Increase in accounts payable (cash inflow): $3,400Calculation:$134,000 + $30,000 - $4,000 + $9,400 - $18,000 - $6,200 + $3,400 = $148,600Therefore, the net cash provided by operating activities is $148,600.

Question 3

In preparing a company's statement of cash flows for the most recent year using the indirect method,the following information is available:  Net cash provided by operating activities was:
A)$120,000.
B)$60,000.
C)$70,000.
D)$80,000.
E)$130,000.

Accepted Answer

The answer of In preparing a company's statement of cash...

Question 4

A machine with a cost of $130,000 and accumulated depreciation of $85,000 is sold for $50,000 cash.The amount that should be reported in the operating activities section reported under the direct method is:
A)$50,000.
B)$5,000.
C)$45,000.
D)Zero.This is an investing activity.
E)Zero.This is a financing activity.

Accepted Answer

The sale of a machine is considered an investing activity, not an operating activity. Therefore, the cash received from the sale would be reported in the investing activities section of the cash flow statement, not the operating activities section.

Question 5

Use the following information to calculate cash received from dividends: 
A)$26,400.
B)$29,000.
C)$29,800.
D)$30,600.
E)$32,400.

Accepted Answer

The answer of Use the following information to calculate cash...

Question 6

In preparing a company's statement of cash flows for the most recent year using the indirect method,the following information is available:  Net cash provided by operating activities was:
A)$34,000.
B)$60,000.
C)$70,000.
D)$80,000.
E)$52,000.

Accepted Answer

The answer of In preparing a company's statement of cash...

Question 7

Bagrov Corporation had a net decrease in cash of $10,000 for the current year.Net cash used in investing activities was $52,000 and net cash used in financing activities was $38,000.What amount of cash was provided (used)in operating activities?
A)$100,000 provided.
B)$(100,000)used.
C)$80,000 provided.
D)$(80,000)used.
E)$(10,000)used.

Accepted Answer

To find the amount of cash provided (used) in operating activities, we can use the indirect method of the cash flow statement.

Net decrease in cash = Cash flows from operating activities + Cash flows from investing activities + Cash flows from financing activities

Substituting the given values, we get:

-$10,000 = Cash flows from operating activities - $52,000 - $38,000

Simplifying, we get:

Cash flows from operating activities = $80,000 provided

Therefore, the correct answer is choice C.

Question 8

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:
A)$4,000.
B)$16,000.
C)$44,000.
D)$40,000.
E)$39,000.

Accepted Answer

The answer of Analysis reveals that a company had a...

Question 9

A machine with a cost of $130,000,current year depreciation expense of $17,000 and accumulated depreciation of $85,000 is sold for $40,000 cash.The total amount that should be reported in the operating section of the statement of cash flow as per indirect method is:
A)$17,000.
B)$4,000.
C)$57,000.
D)$21,000.
E)$22,000.

Accepted Answer

The answer of A machine with a cost of $130,000,current...

Question 10

Addams Corporation paid cash dividends totaling $75,000 during its most recent fiscal year.How should this information be reported on Addams's statement of cash flows?
A)In operating activities as a source of funds.
B)In investing activities as a source of funds.
C)In investing activities as a use of funds.
D)In financing activities as a source of funds.
E)In financing activities as a use of funds.

Accepted Answer

Cash dividends paid by a corporation are reported in the financing activities section of the statement of cash flows as a use of funds. This reflects the outflow of cash to the company's shareholders.

Question 11

The accountant for Crusoe Company is preparing the company's statement of cash flows for the fiscal year just ended.The following information is available:  The amount of cash dividends paid during the year would be:
A)$48,000.
B)$46,000.
C)$8,000.
D)$64,000.
E)$44,000.

Accepted Answer

The answer of The accountant for Crusoe Company is preparing...

Question 12

The accountant for Crusoe Company is preparing the company's statement of cash flows for the fiscal year just ended.The following information is available:  What is the ending balance for retained earnings?
A)$218,000.
B)$170,000.
C)$352,000.
D)$172,000.
E)$179,000.

Accepted Answer

The ending balance for retained earnings can be found in the company's statement of retained earnings, which is not given in the information provided. Therefore, we cannot determine the ending balance for retained earnings with the given information.

Question 13

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?
A)$55,000.
B)$45,000.
C)$31,000.
D)$6,000.
E)$11,000.

Accepted Answer

The answer of Stormer Company reports the following amounts on...

Question 14

A company's income statement showed the following: net income,$124,000 and depreciation expense,$30,000.An examination of the company's current assets and current liabilities showed the following changes as a result of operating activities: accounts receivable decreased $9,400; merchandise inventory increased $18,000; and accounts payable increased $3,400.Calculate the net cash provided or used by operating activities.
A)$118,000.
B)$159,200.
C)$123,200.
D)$148,800.
E)$178,000.

Accepted Answer

The answer of A company's income statement showed the following:...

Question 15

In preparing a company's statement of cash flows for the most recent year using the indirect method,the following information is available:  Net cash provided by operating activities was:
A)$120,000.
B)$71,000.
C)$70,000.
D)$24,000.
E)$110,000

Accepted Answer

The answer of In preparing a company's statement of cash...

Question 16

Use the following information to calculate cash received from dividends: 
A)$63,500.
B)$63,000.
C)$64,000.
D)$67,100.
E)$60,400.

Accepted Answer

The answer of Use the following information to calculate cash...

Question 17

In preparing a company's statement of cash flows for the most recent year using the indirect method,the following information is available: $\begin{array}{lr}
\text { Net income for the year was } & 52,000 \
\text { Accounts payable increased by } & 18,000 \
\text { Accounts receivable decreased by } & 25,000 \
\text { Inventories decreased by } & 5,000 \
\text { Cash dividends paid were } & 14,000 \
\text { Depreciation expense was } & 20,000
\end{array}$ Net cash provided by operating activities was:
A)$120,000.
B)$71,000.
C)$70,000.
D)$24,000.
E)$110,000.

Accepted Answer

Net cash provided by operating activities is calculated by adjusting net income for changes in working capital and non-cash expenses. Starting with net income of $52,000, add back depreciation ($20,000), increase in accounts payable ($18,000), decrease in accounts receivable ($25,000), and decrease in inventories ($5,000). This results in $120,000.

Question 18

A machine with a cost of $130,000,accumulated depreciation of $85,000,and current year depreciation expense of $17,000 is sold for $40,000 cash.The amount that should be reported as a source of cash under cash flows from investing activities is:
A)$45,000.
B)$5,000.
C)$17,000.
D)$28,000.
E)$40,000.

Accepted Answer

The amount reported as a source of cash under cash flows from investing activities is the cash received from the sale, which is $40,000.

Question 19

Use the following information and the indirect method to calculate the net cash provided or used by operating activities: 
A)$69,900.
B)$108,900.
C)$93,900.
D)$85,700.
E)$81,600.

Accepted Answer

The net loss reported in the income statement is $70,000. To adjust this amount to the net cash provided/used by operating activities, we need to add back non-cash expenses such as depreciation and amortization expense ($25,000) and subtract the increase in accounts receivable ($2,000), add the increase in accounts payable ($20,000), and subtract the increase in inventory ($15,100). Therefore:

Net cash provided/used by operating activities = Net loss + Non-cash expenses - Increase in accounts receivable + Increase in accounts payable - Increase in inventory
= $70,000 + $25,000 - $2,000 + $20,000 - $15,100
= $93,900

Therefore, the correct answer is C) $93,900.

Question 20

A machine with a cost of $130,000 and accumulated depreciation of $85,000 is sold for $50,000 cash.The amount that should be reported as a source of cash under cash flows from investing activities is:
A)$50,000.
B)$5,000.
C)$45,000.
D)Zero.This is an operating activity.
E)Zero.This is a financing activity.

Accepted Answer

The amount reported as a source of cash under cash flows from investing activities is the cash received from the sale, which is $50,000. The calculation of gain or loss on the sale is separate and does not affect the cash flow amount reported.

Quiz 12: Reporting and Analyzing Cash Flows

A company reported that its bonds with a par value of $50,000 and a carrying value of $57,000 are retired for $60,000 cash,resulting in a loss of $3,000.The amount to be reported under cash flows from financing activities is:

In preparing a company's statement of cash flows for the most recent year using the indirect method,the following information is available: Net cash provided by operating activities was:

A machine with a cost of $130,000 and accumulated depreciation of $85,000 is sold for $50,000 cash.The amount that should be reported in the operating activities section reported under the direct method is:

Use the following information to calculate cash received from dividends:

In preparing a company's statement of cash flows for the most recent year using the indirect method,the following information is available: Net cash provided by operating activities was:

Bagrov Corporation had a net decrease in cash of $10,000 for the current year.Net cash used in investing activities was $52,000 and net cash used in financing activities was $38,000.What amount of cash was provided (used) in operating activities?

A machine with a cost of $130,000,current year depreciation expense of $17,000 and accumulated depreciation of $85,000 is sold for $40,000 cash.The total amount that should be reported in the operating section of the statement of cash flow as per indirect method is:

Addams Corporation paid cash dividends totaling $75,000 during its most recent fiscal year.How should this information be reported on Addams's statement of cash flows?

The accountant for Crusoe Company is preparing the company's statement of cash flows for the fiscal year just ended.The following information is available: The amount of cash dividends paid during the year would be:

The accountant for Crusoe Company is preparing the company's statement of cash flows for the fiscal year just ended.The following information is available: What is the ending balance for retained earnings?

In preparing a company's statement of cash flows for the most recent year using the indirect method,the following information is available: Net cash provided by operating activities was:

Use the following information to calculate cash received from dividends:

A machine with a cost of $130,000,accumulated depreciation of $85,000,and current year depreciation expense of $17,000 is sold for $40,000 cash.The amount that should be reported as a source of cash under cash flows from investing activities is:

Use the following information and the indirect method to calculate the net cash provided or used by operating activities:

A machine with a cost of $130,000 and accumulated depreciation of $85,000 is sold for $50,000 cash.The amount that should be reported as a source of cash under cash flows from investing activities is: