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Exam 21: The Statement of Cash Flows Revisited

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Question 61

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Ludwig Company's prepaid rent was $9,000 at December 31, 2012, and $13,000 at December 31, 2013. Ludwig reported rent expense of $19,000 on the 2013 income statement. What amount would be reported in the statement of cash flows as rent paid using the direct method?

A) $15,000.
B) $19,000.
C) $23,000.
D) None of the above is correct.

E) B) and D)
F) A) and B)

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Question 62

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The purchase of treasury stock is an investing cash outflow.

A) True
B) False

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Question 63

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Which of the following would be reported as a cash outflow from investing activities?

The primary objective of the statement of cash flows is to provide information about a company's:

Generally speaking, cash flows from operating activities include the elements of net income reported on a cash basis.

When preparing the statement of cash flows using the indirect method for determining net cash flows from operating activities, depreciation is added to net income because:

Interest payments and interest received must be reported as operating cash flows using:

What method (direct or indirect) does Henchman & Co. use to present its Statement of Cash Flows? Explain how you can tell.

A firm reported ($ in millions) net cash inflows (outflows) as follows: operating $75, investing ($200) , and financing $350. The beginning cash balance was $250. What was the ending cash balance?

Which of the following is not true regarding the statement of cash flows?

Determine the amount of cash paid to suppliers for each of the four independent situations below.

Creditors and investors would generally find the statement of cash flows least useful for assessing the:

What activities are included in the statement of cash flows under the section titled "Cash flows from investing activities"?

A loss on the sale of machinery should be reported in the statement of cash flows as:

On December 31, 2013, Tiras Company reported net income of $50,000 and sales of $200,000. The company also reported beginning and ending accounts receivable at $20,000 and $25,000, respectively. Tiras will report cash collected from customers in its 2013 statement of cash flows (indirect method) in the amount of:

Which of the following is not reported as an adjustment to net income when using the indirect method of computing net cash flows from operating activities?

Which one of the following financial statements does not report amounts primarily on an accrual basis?

Following are the income statement and some additional information for Parson Corporation for 2013. All sales were on credit and accounts receivable increased by $600 in 2013 compared to 2012. Merchandise purchases were on credit with an increase in accounts payable of $400 during the year. Ending inventory was $500 larger than beginning inventory. Income taxes payable increased $300 during the year. All operating expenses were paid for in cash. Required: Prepare the cash flows from operating activities section of the statement of cash flows using the indirect method.

Which of the following causes a change in cash?

Amounts held in cash equivalent investments must be reported separately from amounts held as cash in the statement of cash flows.