Question 1

A company reported net income of $112,000, operating cash flows of $57,000, total cash flows of $97,000, and average total assets of $962,000. Calculate its cash flow on total assets ratio.

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Question 2

A corporation reported average total assets in Year 1 of $397,350 and $440,800 in Year 2. Its net operating cash flow for Year 1 was $35,667 and $35,790 for Year 2. Calculate the cash flow on total assets ratio for both years. Comment on the results.

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Question 3

Use the following calendar-year information to prepare David Company's statement of cash flows using the direct method.

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Question 4

Aster Company's 2011 income statement and changes in selected balance sheet accounts are given below. Calculate the company's net cash provided or used by operating activities using the direct method.
The company also experienced the following during 2011:

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Question 5

Use the following financial statements and additional information to (1) prepare a complete statement of cash flows for the year ended December 31, 2011. The cash provided or used by operating activities should be reported using the direct method, and (2) compute the company's cash flow on total assets ratio for 2011.
  Additional Information
a. A $20,000 note payable is retired at its carrying amount in exchange for cash.
b. The only changes affecting retained earnings are net income and cash dividends paid. Cash dividends paid is to be classified under financing activities.
c. New equipment is acquired for $120,000 cash.
d. Received cash for the sale of equipment that had cost $85,000, yielding a gain of $4,700.
e. Prepaid expenses relate to Other Expenses on the income statement.
f. All purchases and sales of merchandise inventory are on credit.

Accepted Answer

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Question 6

A company reported average total assets of $496,000 in Year 1 and $604,000 in Year 2. Its net operating cash flow in Year 1 was $41,150 and $55,500 in Year 2. Calculate its cash flow on total assets ratio for both years. Comment on the results.

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Question 7

The following selected account balances are taken from a merchandising company's records:
(a) Calculate the cash payments made during 2011 for merchandise. Assume all of the company's accounts payable balances result from merchandise purchases.
(b) Calculate the cash receipts from customer sales during 2011.
(c) Calculate the cash payments for salaries during 2011.

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Question 8

Hancock reported assets of $13,362 million at January 1 and $13,369 million as of December 31 of the current year. Hancock's net cash flows from operations were $2,204 million. Calculate the cash flow on total assets ratio for Hancock.

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Question 9

The following transactions and events occurred during the year. Assuming that this company uses the indirect method to report cash provided by operating activities, indicate where each item would appear on its statement of cash flows by placing an x in the appropriate column.

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Question 10

Use the following income statement and information about changes in noncash current assets and liabilities to (1) prepare only the cash flows from operating activities section of the statement of cash flows using the indirect method and (2) compute the company's cash flow on total assets ratio for the year assuming that average total assets are $525,250.
Changes in current asset and current liability accounts for the year that relate to operations follow.

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Question 11

A company reported operating cash flows in Year 1 of $23,400 and $26,220 in Year 2. Its average total assets in Year 1 were $262,000 and $285,000 in Year 2. Calculate the cash flow on total assets ratio for both years. Comment on the results.

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Question 12

For each of the following independent cases, use the information provided to calculate the missing cash inflow or cash outflow using the direct method.

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Question 13

Use the following company information to calculate its net cash provided or used by investing activities:
(a) Equipment with a carrying amount of $125,000 and an original cost of $220,000 was sold at a gain of $22,000.
(b) Paid $49,000 cash for a new truck.
(c) Sold land costing $30,000 for $26,000 cash, realizing a $4,000 loss.
(d) Purchased treasury shares for $53,000 cash.
(e) Long-term investments in shares are sold for $41,000 cash, realizing a gain of $3,500.

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Question 14

Use the following information about the calendar-year cash flows of MacArthur Company to prepare a statement of cash flows (direct method) and a schedule of noncash investing and financing activities.

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Question 15

Use the following financial statements and additional information to (1) prepare a statement of cash flows for the year ended December 31, 2011 using the indirect method, and (2) compute the company's cash flow on total assets ratio for 2011.
   Additional Information
a. A $20,000 note payable is retired at its carrying amount in exchange for cash.
b. The only changes affecting retained earnings are net income and cash dividends paid. Cash dividends paid is to be classified under financing activities.
c. New equipment is acquired for $120,000 cash.
d. Received cash for the sale of equipment that had cost $85,000, yielding a gain of $4,700.
e. Prepaid expenses relate to Other Expenses on the income statement.
f. All purchases and sales of merchandise inventory are on credit.

Accepted Answer

The answer of Use the following financial statements and additional...

Question 16

A company reported net income of $318,000, operating cash flows of $218,000, total cash flows of $184,000, and average total assets of $898,000. Calculate its cash flow on total assets ratio.

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Question 17

Based on the information in the following income statement and balance sheet for Montego Bay Corporation, determine the cash flows from operating activities using the direct method.

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Question 18

Use the following information to calculate the net cash provided or used by financing activities for the Brooks Corporation:
(a) Net income, $10,000
(b) Sold ordinary shares for $4,000 cash
(c) Paid cash dividend of $3,000 (classify under financing activities)
(d) Paid bond payable, $8,000
(e) Purchased equipment for $12,000 cash

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Question 19

For each of the following separate cases, use the information provided to calculate the missing cash inflow or cash outflow using the direct method.

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Question 20

Mansell reported net income of $233.4 million, net cash provided by operating activities of $131.4 million, total cash flows of $187.7 million, and average total assets of $2,040.8 million at the end of the year. Calculate the cash flow on total assets ratio for Mansell.

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Quiz 16: Statement of Cash Flows