Question 1

Based on the following, what is free cash flow?
Net cash flow from operating activities
$318,000
Net cash flow used for investing activities
30,000)Net cash flow from financing activities
30,000
Cash flows from operations include $2,000 for depreciation. Cash flows from investing include the purchase of a replacement asset for $100,000 and the sale of the one used in production, which is now obsolete, for $70,000. Cash flows from financing include $70,000 of borrowing.

Accepted Answer

The answer of Based on the following, what is free...

Question 2

Identify the section of the statement of cash flows a-d) where each of the following items would be reported.
-Dividends received on investment
A)Operating activities
B)Financing activities
C)Investing activities
D)Schedule of noncash financing and investing

Accepted Answer

Dividends received on investments are typically classified as operating activities because they are considered returns on investments that affect the company's cash flow from its primary business operations.

Question 3

For each of the following activities that may take place during the accounting period, indicate the effect a-g) on the statement of cash flows prepared using the indirect method. Choices may be selected as the answer for more than one question.
-increase in accounts receivable balance
A)increase cash from operating activities
B)decrease cash from operating activities
C)increase cash from investing activities
D)decrease cash from investing activities
E)increase cash from financing activities
F)decrease cash from financing activities
G)noncash investing and financing supplement

Accepted Answer

An increase in accounts receivable balance means that customers owe more money to the company, which will be recorded as revenue in the income statement. However, since the cash has not been received yet, it is considered a decrease in cash from operating activities in the statement of cash flows.

Question 4

For each of the following activities that may take place during the accounting period, indicate the effect a-g) on the statement of cash flows prepared using the indirect method. Choices may be selected as the answer for more than one question.
-decrease in accounts payable balance
A)increase cash from operating activities
B)decrease cash from operating activities
C)increase cash from investing activities
D)decrease cash from investing activities
E)increase cash from financing activities
F)decrease cash from financing activities
G)noncash investing and financing supplement

Accepted Answer

A decrease in accounts payable means that less cash was paid toward accounts payable during the accounting period, resulting in a decrease in cash from operating activities.

Question 5

For each of the following activities that may take place during the accounting period, indicate the effect a-g) on the statement of cash flows prepared using the indirect method. Choices may be selected as the answer for more than one question.
-exchange of land for common stock
A)increase cash from operating activities
B)decrease cash from operating activities
C)increase cash from investing activities
D)decrease cash from investing activities
E)increase cash from financing activities
F)decrease cash from financing activities
G)noncash investing and financing supplement

Accepted Answer

The answer of For each of the following activities that...

Question 6

The comparative balance sheet of ConnieJo Company, for December 31, Years 1 and 2 ended December 31 appears below in condensed form:   Additional data for the current year are as follows:
a) Fully depreciated equipment costing $39,000 was scrapped, no salvage, and equipment was purchased for $157,000.
b) Bonds payable for $100,000 were retired by payment at their face amount.
c) 5,000 shares of common stock were issued at $15 for cash.
d) Cash dividends declared were paid $28,000.
e) All sales are on account.
Prepare a statement of cash flows, using the direct method of reporting cash flows from operating activities.

Accepted Answer

The answer of The comparative balance sheet of ConnieJo Company,...

Question 7

The cash flows from operating activities are reported by the direct method on the statement of cash
flows.
1)2)Determine the following:
If sales for the current year were $695,000 and accounts receivable decreased by $43,500 during the year, what was the amount of cash received from customers?
If income tax expense for the current year was $56,000 and income tax payable
decreased by $5,200 during the year, what was the amount of cash payments of income tax?

Accepted Answer

The answer of The cash flows from operating activities are...

Question 8

For each of the following activities that may take place during the accounting period, indicate the effect a-g) on the statement of cash flows prepared using the indirect method. Choices may be selected as the answer for more than one question.
-repayment of long-term note payable
A)increase cash from operating activities
B)decrease cash from operating activities
C)increase cash from investing activities
D)decrease cash from investing activities
E)increase cash from financing activities
F)decrease cash from financing activities
G)noncash investing and financing supplement

Accepted Answer

The answer of For each of the following activities that...

Question 9

Connor Designs Company has cash flows for operating activities of $425,000. Cash flows used for investments in property, plant, and equipment totaled $65,000, of which 70% of this investment was used to replace machinery to maintain existing capacity.
What is the free cash flow for Connor Designs?

Accepted Answer

The answer of Connor Designs Company has cash flows for...

Question 10

Identify the section of the statement of cash flows a-d) where each of the following items would be reported.
-Sale of machinery held for use by the company
A)Operating activities
B)Financing activities
C)Investing activities
D)Schedule of noncash financing and investing

Accepted Answer

The sale of machinery held for use by the company would be reported in the investing activities section of the statement of cash flows as it is a disposal of a long-term asset.

Question 11

For each of the following activities that may take place during the accounting period, indicate the effect a-g) on the statement of cash flows prepared using the indirect method. Choices may be selected as the answer for more than one question.
-purchase of equipment
A)increase cash from operating activities
B)decrease cash from operating activities
C)increase cash from investing activities
D)decrease cash from investing activities
E)increase cash from financing activities
F)decrease cash from financing activities
G)noncash investing and financing supplement

Accepted Answer

The purchase of equipment is an investing activity, as it involves the acquisition of a long-term asset that will be used in the business. Therefore, it would decrease cash from investing activities on the statement of cash flows prepared using the indirect method.

Question 12

Balances of the current asset and current liability accounts at the end and beginning of the year are as follows:  Use the direct method to prepare the cash flows from operating activities section of a statement of cash flows.

Accepted Answer

The answer of Balances of the current asset and current...

Question 13

For each of the following activities that may take place during the accounting period, indicate the effect a-g) on the statement of cash flows prepared using the indirect method. Choices may be selected as the answer for more than one question.
-acquisition of treasury stock
A)increase cash from operating activities
B)decrease cash from operating activities
C)increase cash from investing activities
D)decrease cash from investing activities
E)increase cash from financing activities
F)decrease cash from financing activities
G)noncash investing and financing supplement

Accepted Answer

The answer of For each of the following activities that...

Question 14

For each of the following activities that may take place during the accounting period, indicate the effect a-g) on the statement of cash flows prepared using the indirect method. Choices may be selected as the answer for more than one question.
-payment of dividends
A)increase cash from operating activities
B)decrease cash from operating activities
C)increase cash from investing activities
D)decrease cash from investing activities
E)increase cash from financing activities
F)decrease cash from financing activities
G)noncash investing and financing supplement

Accepted Answer

The answer of For each of the following activities that...

Question 15

Identify the section of the statement of cash flows a-d) where each of the following items would be reported.
-Increase in income taxes payable
A)Operating activities
B)Financing activities
C)Investing activities
D)Schedule of noncash financing and investing

Accepted Answer

The increase in income taxes payable is a component of operating activities in the statement of cash flows as it is related to the company's earnings from operations.

Question 16

For each of the following activities that may take place during the accounting period, indicate the effect a-g) on the statement of cash flows prepared using the indirect method. Choices may be selected as the answer for more than one question.
-gain on sale of investments
A)increase cash from operating activities
B)decrease cash from operating activities
C)increase cash from investing activities
D)decrease cash from investing activities
E)increase cash from financing activities
F)decrease cash from financing activities
G)noncash investing and financing supplement

Accepted Answer

The answer of For each of the following activities that...

Question 17

Cost of merchandise sold reported on the income statement was $155,000. The accounts payable balance increased $8,000, and the inventory balance increased by $21,000 over the year. Determine the amount of cash paid for merchandise.

Accepted Answer

The answer of Cost of merchandise sold reported on the...

Question 18

For each of the following activities that may take place during the accounting period, indicate the effect a-g) on the statement of cash flows prepared using the indirect method. Choices may be selected as the answer for more than one question.
-amortization of intangible assets
A)increase cash from operating activities
B)decrease cash from operating activities
C)increase cash from investing activities
D)decrease cash from investing activities
E)increase cash from financing activities
F)decrease cash from financing activities
G)noncash investing and financing supplement

Accepted Answer

The answer of For each of the following activities that...

Question 19

For each of the following activities that may take place during the accounting period, indicate the effect a-g) on the statement of cash flows prepared using the indirect method. Choices may be selected as the answer for more than one question.
-sale of land
A)increase cash from operating activities
B)decrease cash from operating activities
C)increase cash from investing activities
D)decrease cash from investing activities
E)increase cash from financing activities
F)decrease cash from financing activities
G)noncash investing and financing supplement

Accepted Answer

The sale of land is an investing activity because it involves the sale of a long-term asset. It would increase cash from investing activities on the statement of cash flows prepared using the indirect method.

Question 20

Sales reported on the income statement were $690,000. The accounts receivable balance declined $39,000 over the year. Determine the amount of cash received from customers.

Accepted Answer

The answer of Sales reported on the income statement were...

Quiz 14: Statement of Cash Flows

Identify the section of the statement of cash flows a-d) where each of the following items would be reported. -Dividends received on investment

For each of the following activities that may take place during the accounting period, indicate the effect a-g) on the statement of cash flows prepared using the indirect method. Choices may be selected as the answer for more than one question. -increase in accounts receivable balance

For each of the following activities that may take place during the accounting period, indicate the effect a-g) on the statement of cash flows prepared using the indirect method. Choices may be selected as the answer for more than one question. -decrease in accounts payable balance

For each of the following activities that may take place during the accounting period, indicate the effect a-g) on the statement of cash flows prepared using the indirect method. Choices may be selected as the answer for more than one question. -exchange of land for common stock

For each of the following activities that may take place during the accounting period, indicate the effect a-g) on the statement of cash flows prepared using the indirect method. Choices may be selected as the answer for more than one question. -repayment of long-term note payable

Connor Designs Company has cash flows for operating activities of $425,000. Cash flows used for investments in property, plant, and equipment totaled $65,000, of which 70% of this investment was used to replace machinery to maintain existing capacity. What is the free cash flow for Connor Designs?

Identify the section of the statement of cash flows a-d) where each of the following items would be reported. -Sale of machinery held for use by the company

For each of the following activities that may take place during the accounting period, indicate the effect a-g) on the statement of cash flows prepared using the indirect method. Choices may be selected as the answer for more than one question. -purchase of equipment

Balances of the current asset and current liability accounts at the end and beginning of the year are as follows: Use the direct method to prepare the cash flows from operating activities section of a statement of cash flows.

For each of the following activities that may take place during the accounting period, indicate the effect a-g) on the statement of cash flows prepared using the indirect method. Choices may be selected as the answer for more than one question. -acquisition of treasury stock

For each of the following activities that may take place during the accounting period, indicate the effect a-g) on the statement of cash flows prepared using the indirect method. Choices may be selected as the answer for more than one question. -payment of dividends

Identify the section of the statement of cash flows a-d) where each of the following items would be reported. -Increase in income taxes payable

For each of the following activities that may take place during the accounting period, indicate the effect a-g) on the statement of cash flows prepared using the indirect method. Choices may be selected as the answer for more than one question. -gain on sale of investments

Cost of merchandise sold reported on the income statement was $155,000. The accounts payable balance increased $8,000, and the inventory balance increased by $21,000 over the year. Determine the amount of cash paid for merchandise.

For each of the following activities that may take place during the accounting period, indicate the effect a-g) on the statement of cash flows prepared using the indirect method. Choices may be selected as the answer for more than one question. -amortization of intangible assets

For each of the following activities that may take place during the accounting period, indicate the effect a-g) on the statement of cash flows prepared using the indirect method. Choices may be selected as the answer for more than one question. -sale of land

Sales reported on the income statement were $690,000. The accounts receivable balance declined $39,000 over the year. Determine the amount of cash received from customers.