Question 1

Which of the following would not be reported as a financing activities cash flow?

Accepted Answer

Purchasing a building by signing a note payable is considered an investing activity because it involves the acquisition of a long-term asset. Financing activities involve transactions that affect the company's capital structure, such as issuing stock, paying dividends, and repurchasing outstanding shares.

Question 2

Madison Company had sales of $154,000.Additional information from the balance sheet is below:  How much cash was collected from customers?

Accepted Answer

The answer of Madison Company had sales of $154,000.Additional information...

Question 3

Which of the following is not reported as a cash flow from investing activities?

Accepted Answer

Purchasing land in exchange for common stock is not reported as a cash flow from investing activities. This transaction would be reported as a noncash investing and financing activity because no cash was exchanged. The other options (A, C, and D) are all cash flows from investing activities as they involve the sale of a depreciable asset, a long-term investment, and a patent, respectively, for cash.

Question 4

During 2019,Tommy's Toys reported the following: long-term debt repayments,$503 million;interest paid,$143 million;proceeds from exercise of stock options,$27 million,and issue of common stock in exchange for land costing $10 million.What is the 2019 net cash flow from financing activities?

Accepted Answer

Net cash flow from financing activities is calculated as long-term debt repayments ($503 million) plus interest paid ($143 million) minus proceeds from exercise of stock options ($27 million), resulting in a net cash outflow of $619 million. However, the issue of common stock in exchange for land is a non-cash transaction and does not affect cash flow. Therefore, the net cash outflow is $476 million.

Question 5

Bold Company's 2019 income statement reported total sales revenue of $250,000.During 2019,accounts receivable decreased by $20,000 and accounts payable increased $10,000.How much cash was collected from customers during 2019?

Accepted Answer

The cash collected from customers is calculated by adjusting the sales revenue for the change in accounts receivable. Since accounts receivable decreased by $20,000, this means that $20,000 of the sales revenue was collected in cash, in addition to the initial sales revenue. Therefore, the cash collected from customers is $250,000 (initial sales revenue) + $20,000 (decrease in accounts receivable) = $270,000. The change in accounts payable does not affect the cash collected from customers.

Question 6

A company reported an increase in accounts payable and a decrease in inventory during 2019.Which of the following statements is correct?

Accepted Answer

The answer of A company reported an increase in accounts...

Question 7

A company reported an increase in accounts receivable and an increase in unearned sales revenues during 2019.Which of the following statements is correct?

Accepted Answer

Cash collected from customers is calculated by starting with sales revenues, subtracting the increase in accounts receivable (since this represents sales made on credit that have not yet been collected in cash), and adding the increase in unearned sales revenues (since this represents cash received in advance for services or goods to be provided in the future).

Question 8

Aaron Inc.reported operating expenses during 2019 of $765,000 (including $80,000 of depreciation expense).Prepaid expenses increased $25,000 while accrued liabilities increased $43,000.How much cash was paid for operating expenses during 2019?

Accepted Answer

To find out the cash paid for operating expenses, we need to adjust the changes in prepaid expenses and accrued liabilities to the total operating expenses.

Adjusted operating expenses = operating expenses + increase in prepaid expenses - increase in accrued liabilities
Adjusted operating expenses = $765,000 + $25,000 - $43,000
Adjusted operating expenses = $747,000

Next, we need to add back the depreciation expense, which is a non-cash expense.

Cash paid for operating expenses = Adjusted operating expenses + Depreciation expense
Cash paid for operating expenses = $747,000 + $80,000
Cash paid for operating expenses = $827,000

Therefore, the best choice is C, $667,000.

Question 9

The financial statements for World Company show the following: Cost of goods sold,$725,000.
 How much cash was paid to suppliers?

Accepted Answer

The answer of The financial statements for World Company show...

Question 10

Amanda Company reported income tax expense of $250,000.Beginning income taxes payable was $30,000,while ending income taxes payable was $25,000,and accounts payable decreased $10,000.How much cash was paid for taxes?

Accepted Answer

The cash paid for taxes can be calculated by adjusting the income tax expense for the change in income taxes payable. The calculation is as follows: Income tax expense ($250,000) + Decrease in income taxes payable ($30,000 - $25,000 = $5,000) = Cash paid for taxes ($250,000 + $5,000 = $255,000). The change in accounts payable is not relevant to the calculation of cash paid for taxes.

Question 11

Halbur Company reported the following for its recent year of operation:  No new equipment was purchased during the year.What was the selling price of the equipment?

Accepted Answer

The equipment was purchased for $1,800 and had accumulated depreciation of $900 at the end of the year. This means that the book value of the equipment was $900 ($1,800 - $900). The company sold the equipment for $1,800, which is $900 more than the book value ($1,800 - $900 = $900). Therefore, the selling price of the equipment was $900.

Question 12

KAJ Incorporated purchased a machine costing $250,000 by paying $35,000 and signing a $215,000 note payable. 
-How would this transaction be reported within the cash flow from financing activities section of the cash flow statement?

Accepted Answer

The transaction involves acquiring a machine through a down payment and a note payable, which affects investing and financing activities respectively. However, the cash flow from financing activities only includes the inflows and outflows of cash related to borrowing and repaying debts, issuing and buying back shares, and paying dividends. Since the note payable represents a non-cash financing activity, it does not directly affect the cash flows and thus is not reported in the cash flow from financing activities section. The cash paid ($35,000) is related to the purchase of the machine, which is an investing activity, not a financing activity.

Question 13

Slipper Company sold a productive asset,a machine,for cash.It originally cost Slipper $20,000.The accumulated depreciation at the date of disposal was $15,000.A gain on the disposal of $2,000 was reported.What was the asset's selling price?

Accepted Answer

The book value of the asset at the time of sale is $20,000 (original cost) - $15,000 (accumulated depreciation) = $5,000. A gain of $2,000 indicates the selling price was $5,000 (book value) + $2,000 (gain) = $7,000.

Question 14

A company reported an increase in accrued sales revenues and a decrease in unearned sales revenues during 2019.Which of the following statements is correct?

Accepted Answer

The answer of A company reported an increase in accrued...

Question 15

A company reported an increase in prepaid rent and an increase in accrued liabilities during 2019.Which of the following statements is correct?

Accepted Answer

An increase in prepaid rent means cash was paid in advance, so it is added back to operating expenses. An increase in accrued liabilities means expenses were incurred but not yet paid, so it is subtracted from operating expenses.

Question 16

KAJ Incorporated purchased a machine costing $250,000 by paying $35,000 and signing a $215,000 note payable. 
-How would this transaction be reported within the cash flow from investing activities section of the cash flow statement?

Accepted Answer

The cash flow from investing activities section of the cash flow statement only includes actual cash transactions. Since KAJ Incorporated paid $35,000 in cash for the machine, this amount represents the cash outflow for investing activities. The note payable of $215,000 is a financing activity, not an investing activity.

Question 17

Atkins Corporation has provided the following information for the year ended December 31,2019: • The equipment account balance increased by $200,000 from the beginning of the year to the end of the year.
• The equipment accumulated depreciation account balance increased by $35,000 from the beginning of the year to the end of the year.
• Equipment costing $50,000 was sold during the year resulting in a $10,000 gain.
• Depreciation expense recorded on the equipment during the year was $65,000.
-
Which of the following statements is incorrect with respect to preparation of the statement of cash flows? Assume that the equipment purchase and sale resulted in cash flows.

Accepted Answer

The correct cash inflow from the equipment sale is calculated by subtracting the equipment's book value at the time of sale from the sale proceeds. The book value is the original cost minus accumulated depreciation. Given the gain of $10,000 on a sale of equipment costing $50,000, the cash inflow is actually $30,000 ($20,000 book value + $10,000 gain), not $60,000.

Question 18

Atkins Corporation has provided the following information for the year ended December 31,2019: • The equipment account balance increased by $200,000 from the beginning of the year to the end of the year.
• The equipment accumulated depreciation account balance increased by $35,000 from the beginning of the year to the end of the year.
• Equipment costing $50,000 was sold during the year resulting in a $10,000 gain.
• Depreciation expense recorded on the equipment during the year was $65,000.
-
Which of the following statements is correct with respect to determining cash flow from investing activities? Assume that the equipment purchase and sale resulted in cash flows.

Accepted Answer

The answer of Atkins Corporation has provided the following information...

Question 19

A company's 2019 income statement reported total sales revenue of $1,200,000;accounts receivable increased by $25,000 and the unearned sales revenue account decreased $15,000 during 2019.How much cash was collected from customers during 2019?

Accepted Answer

To calculate the cash collected from customers during 2019, we need to adjust the reported sales revenue for the change in accounts receivable and unearned sales revenue. 
Adjusted sales revenue = total sales revenue + decrease in unearned sales revenue - increase in accounts receivable 
= $1,200,000 - $15,000 - $25,000 
= $1,160,000 
Therefore, the cash collected from customers during 2019 was $1,160,000. The correct answer is B.

Question 20

Which of the following transactions is not reported in the statement of cash flows as a cash flow from investing activities?

Accepted Answer

Purchasing land in exchange for common stock is reported in the statement of cash flows as a noncash investing and financing activity, since it involves the exchange of a noncash asset (the common stock) for a new asset (the land). Selling a depreciable asset for cash at a loss, purchasing a patent using cash, and purchasing shares of common stock of another company using cash are all reported in the statement of cash flows as cash flows from investing activities.

Quiz 12: Statement of Cash Flows

Which of the following would not be reported as a financing activities cash flow?

Madison Company had sales of $154,000.Additional information from the balance sheet is below: How much cash was collected from customers?

Which of the following is not reported as a cash flow from investing activities?

During 2019,Tommy's Toys reported the following: long-term debt repayments,$503 million;interest paid,$143 million;proceeds from exercise of stock options,$27 million,and issue of common stock in exchange for land costing $10 million.What is the 2019 net cash flow from financing activities?

Bold Company's 2019 income statement reported total sales revenue of $250,000.During 2019,accounts receivable decreased by $20,000 and accounts payable increased $10,000.How much cash was collected from customers during 2019?

A company reported an increase in accounts payable and a decrease in inventory during 2019.Which of the following statements is correct?

A company reported an increase in accounts receivable and an increase in unearned sales revenues during 2019.Which of the following statements is correct?

Aaron Inc.reported operating expenses during 2019 of $765,000 (including $80,000 of depreciation expense) .Prepaid expenses increased $25,000 while accrued liabilities increased $43,000.How much cash was paid for operating expenses during 2019?

The financial statements for World Company show the following: Cost of goods sold,$725,000. How much cash was paid to suppliers?

Amanda Company reported income tax expense of $250,000.Beginning income taxes payable was $30,000,while ending income taxes payable was $25,000,and accounts payable decreased $10,000.How much cash was paid for taxes?

Halbur Company reported the following for its recent year of operation: No new equipment was purchased during the year.What was the selling price of the equipment?

KAJ Incorporated purchased a machine costing $250,000 by paying $35,000 and signing a $215,000 note payable. -How would this transaction be reported within the cash flow from financing activities section of the cash flow statement?

Slipper Company sold a productive asset,a machine,for cash.It originally cost Slipper $20,000.The accumulated depreciation at the date of disposal was $15,000.A gain on the disposal of $2,000 was reported.What was the asset's selling price?

A company reported an increase in accrued sales revenues and a decrease in unearned sales revenues during 2019.Which of the following statements is correct?

A company reported an increase in prepaid rent and an increase in accrued liabilities during 2019.Which of the following statements is correct?

KAJ Incorporated purchased a machine costing $250,000 by paying $35,000 and signing a $215,000 note payable. -How would this transaction be reported within the cash flow from investing activities section of the cash flow statement?

A company's 2019 income statement reported total sales revenue of $1,200,000;accounts receivable increased by $25,000 and the unearned sales revenue account decreased $15,000 during 2019.How much cash was collected from customers during 2019?

Which of the following transactions is not reported in the statement of cash flows as a cash flow from investing activities?