Question 1

In preparing a company's statement of cash flows 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

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Question 2

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 of cash received from the retirement of bonds is $60,000, which is reported as a cash inflow from financing activities. The loss of $3,000 is a non-cash expense and is not reported in the cash flows statement.

Question 3

In preparing a company's statement of cash flows 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 4

Use the following information to calculate cash paid for income taxes: 
A) $23,700.
B) $52,100.
C) $53,200.
D) $41,900.
E) $43,000.

Accepted Answer

Increase in Income Taxes Payable = $10,200 − $9,100 = $1,100
Cash paid for Income Taxes = $43,000 − $1,100 = $41,900
Reconstructed entry:
 11eaadfd_cc31_ac46_95d8_bfab2199081e_TB6948_00

Question 5

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: 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

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Question 6

When preparing a statement of cash flows using the indirect method, which of the following is correct?
A) Proceeds from the sale of equipment should be added to net income in the operating activities section.
B) A loss on the sale of land should be added to net income in the operating activities section.
C) The declaration of a cash dividend should be a use of cash in the financing activities section.
D) The issuance of a stock dividend should be a use of cash in the financing activities section.
E) The purchase of land and a building by issuing a long-term note payable should be a source of cash in the financing activities section.

Accepted Answer

The answer of When preparing a statement of cash flows...

Question 7

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 sale of a machine is considered an investing activity, and the cash received from the sale ($50,000) is the amount reported under cash flows from investing activities.

Question 8

In preparing a company's statement of cash flows 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

11eaadfd_cc38_14f8_95d8_53651d46c24f_TB6948_00

Question 9

Use the following information to calculate cash paid for salaries: 
A) $175,000.
B) $183,000.
C) $167,000.
D) $143,000.
E) $155,000.

Accepted Answer

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

Question 10

Use the following information about the current year's operations of a company to calculate the cash paid for merchandise. 
A) $218,000.
B) $223,200.
C) $220,000.
D) $228,800.
E) $234,000.

Accepted Answer

Increase in inventory = $57,400 − $54,800 = $2,600
Purchases = $226,000 + $2,600 = $228,600
Increase in Accounts payable = $59,800 − $54,400 = $5,400
Cash paid for Merchandise = $228,600 − $5,400 = $223,200
Reconstructed entry:
 11eaadfd_cc32_bdba_95d8_231ee03a3b20_TB6948_00

Question 11

Use the following information about the current year's operations of a company to calculate the cash paid for merchandise. 
A) $585,000.
B) $520,000.
C) $480,000.
D) $508,000.
E) $512,000.

Accepted Answer

Increase in inventory = $97,000 − $85,000 = $12,000
Purchases = $500,000 +$12,000 = $512,000
Decrease in Accounts payable = $68,000 − $60,000 = $8,000
Cash paid for Merchandise = $512,000 + $8,000 = $520,000
Reconstructed entry:
 11eaadfd_cc34_b98e_95d8_a3217985a726_TB6948_00

Question 12

Atom Corporation paid cash dividends totaling $75,000 during its most recent fiscal year. How should this information be reported on Atom'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

Dividends paid are considered a use of funds and are reported in the financing activities section of the statement of cash flows, as they represent cash outflows to shareholders.

Question 13

Use the following information about the current year's operations of a company to calculate the cash paid for merchandise.

A) $727,000.
B) $726,300.
C) $732,700.
D) $737,300.
E) $737,700.

Accepted Answer

The answer of Use the following information about the current...

Question 14

A machine with a cost of $130,000 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) $5,000.

Accepted Answer

Machine book value = $130,000 − $85,000 = $45,000
Proceeds from sale = $40,000
Loss on sale = $5,000

Question 15

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

Question 16

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

11eaadfd_cc36_8e52_95d8_0f44a4103915_TB6948_00

Question 17

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: 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

11eaadfd_cc35_7cdf_95d8_eb08cc19b539_TB6948_00

Question 18

In preparing a company's statement of cash flows 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

11eaadfd_cc37_0384_95d8_29bcfba343c6_TB6948_00

Question 19

Use the following information to calculate cash paid for income taxes: 
A) $50,000.
B) $59,000.
C) $57,000.
D) $48,000.
E) $52,000.

Accepted Answer

Decrease in Income Taxes Payable = $9,000 − $7,000 = $2,000
Cash paid for Income Taxes = $50,000 +$2,000 = $52,000
Reconstructed entry:
 11eaadfd_cc32_4888_95d8_cfc5b3fdcf21_TB6948_00

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 in the operating activities section reported under the direct method is:
A) $50,000.
B) $5,000.
C) $45,000.
D) $0.
E) $35,000.

Accepted Answer

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

Quiz 12: Reporting Cash Flows

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

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 using the indirect method, the following information is available: Net cash provided by operating activities was:

Use the following information to calculate cash paid for income taxes:

When preparing a statement of cash flows using the indirect method, which of the following is correct?

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:

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

Use the following information to calculate cash paid for salaries:

Use the following information about the current year's operations of a company to calculate the cash paid for merchandise.

Use the following information about the current year's operations of a company to calculate the cash paid for merchandise.

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

Use the following information about the current year's operations of a company to calculate the cash paid for merchandise.

A machine with a cost of $130,000 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 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:

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

Use the following information to calculate cash paid for income taxes:

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: