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The investing and financing sections of the statement of cash flows record net cash flows rather than gross cash flows.

A) True
B) False

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Which of the following would be classified as a financing activity on the statement of cash flows?


A) Interest paid to a lender.
B) Dividends paid to the company's common stockholders.
C) Cash paid to acquire a long-term investment.
D) Cash received from a loan that was made to another company.

E) All of the above
F) B) and D)

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Free cash flow increases when a company issues common stock for cash.

A) True
B) False

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Hannah Corporation's comparative balance sheet appears below: Hannah Corporation's comparative balance sheet appears below: The company's net income (loss)for the year was $0 and its cash dividends were $2,000.It did not dispose of any property,plant,and equipment,retire any bonds payable,or repurchase any of its own common stock during the year. Required: Compute the change in each balance sheet account denoted with an asterisk (*).Indicate whether the change in each balance will be recorded in the operating,investing,or financing activities section of the statement of cash flows.For items recorded in the operating activities section,also indicate whether the change will be added to or subtracted from net income.For all other items,indicate whether the change will be added as a cash inflow or subtracted as a cash outflow. The company's net income (loss)for the year was $0 and its cash dividends were $2,000.It did not dispose of any property,plant,and equipment,retire any bonds payable,or repurchase any of its own common stock during the year. Required: Compute the change in each balance sheet account denoted with an asterisk (*).Indicate whether the change in each balance will be recorded in the operating,investing,or financing activities section of the statement of cash flows.For items recorded in the operating activities section,also indicate whether the change will be added to or subtracted from net income.For all other items,indicate whether the change will be added as a cash inflow or subtracted as a cash outflow.

Correct Answer

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A gain on the sale of equipment would be included as part of a company's financing activities on the statement of cash flows.

A) True
B) False

Correct Answer

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Megna Company's net income last year was $143,000. Changes in the company's balance sheet accounts for the year appear below: Megna Company's net income last year was $143,000. Changes in the company's balance sheet accounts for the year appear below: The company paid a cash dividend and it did not dispose of any long-term investments or property, plant, and equipment. The company did not issue any bonds payable or repurchase any of its own common stock. The following questions pertain to the company's statement of cash flows. -The net cash provided by (used in) investing activities last year was: A) $(95,000) B) $95,000 C) $(125,000) D) $125,000 The company paid a cash dividend and it did not dispose of any long-term investments or property, plant, and equipment. The company did not issue any bonds payable or repurchase any of its own common stock. The following questions pertain to the company's statement of cash flows. -The net cash provided by (used in) investing activities last year was:


A) $(95,000)
B) $95,000
C) $(125,000)
D) $125,000

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

Correct Answer

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Megna Company's net income last year was $143,000. Changes in the company's balance sheet accounts for the year appear below: Megna Company's net income last year was $143,000. Changes in the company's balance sheet accounts for the year appear below: The company paid a cash dividend and it did not dispose of any long-term investments or property, plant, and equipment. The company did not issue any bonds payable or repurchase any of its own common stock. The following questions pertain to the company's statement of cash flows. -The net cash provided by (used in) financing activities last year was: A) $20,000 B) $(20,000) C) $69,000 D) $(69,000) The company paid a cash dividend and it did not dispose of any long-term investments or property, plant, and equipment. The company did not issue any bonds payable or repurchase any of its own common stock. The following questions pertain to the company's statement of cash flows. -The net cash provided by (used in) financing activities last year was:


A) $20,000
B) $(20,000)
C) $69,000
D) $(69,000)

E) None of the above
F) A) and D)

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D

Binnie Corporation's most recent balance sheet appears below: Binnie Corporation's most recent balance sheet appears below: Net income for the year was $83. Cash dividends were $16. The company did not dispose of any property, plant, and equipment. It did not issue any bonds payable or repurchase any of its own common stock. The following questions pertain to the company's statement of cash flows. -The net cash provided by (used in) investing activities for the year was: A) $(63) B) $(74) C) $74 D) $63Net income for the year was $83. Cash dividends were $16. The company did not dispose of any property, plant, and equipment. It did not issue any bonds payable or repurchase any of its own common stock. The following questions pertain to the company's statement of cash flows. -The net cash provided by (used in) investing activities for the year was:


A) $(63)
B) $(74)
C) $74
D) $63

E) B) and C)
F) All of the above

Correct Answer

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The most recent balance sheet and income statement of Swanigan Corporation appear below: The most recent balance sheet and income statement of Swanigan Corporation appear below: Cash dividends were $18.The company did not sell or retire any property,plant,and equipment during the year.The net cash provided by (used in) operating activities for the year was: A) $127 B) $39 C) $49 D) $126 The most recent balance sheet and income statement of Swanigan Corporation appear below: Cash dividends were $18.The company did not sell or retire any property,plant,and equipment during the year.The net cash provided by (used in) operating activities for the year was: A) $127 B) $39 C) $49 D) $126 Cash dividends were $18.The company did not sell or retire any property,plant,and equipment during the year.The net cash provided by (used in) operating activities for the year was:


A) $127
B) $39
C) $49
D) $126

E) A) and D)
F) A) and C)

Correct Answer

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A

For liability accounts,debits are added to the beginning balance on the statement of cash flows.

A) True
B) False

Correct Answer

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Lucas Company recorded the following events last year: Lucas Company recorded the following events last year: On the statement of cash flows, some of these events are classified as operating activities, some are classified as investing activities, and some are classified as financing activities. -Based solely on the information above,the net cash provided by (used in) financing activities on the statement of cash flows would be: A) $85,000 B) $(80,000) C) $(145,000) D) $170,000 On the statement of cash flows, some of these events are classified as operating activities, some are classified as investing activities, and some are classified as financing activities. -Based solely on the information above,the net cash provided by (used in) financing activities on the statement of cash flows would be:


A) $85,000
B) $(80,000)
C) $(145,000)
D) $170,000

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

Correct Answer

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B

The following transactions occurred last year at Jogger Company: The following transactions occurred last year at Jogger Company: Based solely on the above information,the net cash provided by financing activities for the year on the statement of cash flows would be: A) $424,000 B) $(138,000) C) $(1,000) D) $7,000 Based solely on the above information,the net cash provided by financing activities for the year on the statement of cash flows would be:


A) $424,000
B) $(138,000)
C) $(1,000)
D) $7,000

E) None of the above
F) All of the above

Correct Answer

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Gasco Corporation's balance sheet and income statement appear below: Gasco Corporation's balance sheet and income statement appear below: Cash dividends were $54. The company sold equipment for $14 that was originally purchased for $8 and that had accumulated depreciation of $1. It did not issue any bonds payable or repurchase any of its own common stock. -The net cash provided by (used in) investing activities for the year was: A) $(137) B) $(151) C) $14 D) $137 Gasco Corporation's balance sheet and income statement appear below: Cash dividends were $54. The company sold equipment for $14 that was originally purchased for $8 and that had accumulated depreciation of $1. It did not issue any bonds payable or repurchase any of its own common stock. -The net cash provided by (used in) investing activities for the year was: A) $(137) B) $(151) C) $14 D) $137 Cash dividends were $54. The company sold equipment for $14 that was originally purchased for $8 and that had accumulated depreciation of $1. It did not issue any bonds payable or repurchase any of its own common stock. -The net cash provided by (used in) investing activities for the year was:


A) $(137)
B) $(151)
C) $14
D) $137

E) A) and D)
F) None of the above

Correct Answer

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Moren Corporation's net cash provided by operating activities was $95;its net income was $71;its capital expenditures were $70;and its cash dividends were $18.The company's free cash flow was:


A) $254
B) $78
C) $7
D) -$17

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

Correct Answer

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The most recent comparative balance sheet of Broekemeier Corporation appears below: The most recent comparative balance sheet of Broekemeier Corporation appears below: The company uses the indirect method to construct the operating activities section of its statements of cash flows. -Which of the following is correct regarding the operating activities section of the statement of cash flows? A) The change in Prepaid Expenses will be added to net income;The change in Income Taxes Payable will be subtracted from net income B) The change in Prepaid Expenses will be subtracted from net income;The change in Income Taxes Payable will be subtracted from net income C) The change in Prepaid Expenses will be subtracted from net income;The change in Income Taxes Payable will be added to net income D) The change in Prepaid Expenses will be added to net income;The change in Income Taxes Payable will be added to net income The company uses the indirect method to construct the operating activities section of its statements of cash flows. -Which of the following is correct regarding the operating activities section of the statement of cash flows?


A) The change in Prepaid Expenses will be added to net income;The change in Income Taxes Payable will be subtracted from net income
B) The change in Prepaid Expenses will be subtracted from net income;The change in Income Taxes Payable will be subtracted from net income
C) The change in Prepaid Expenses will be subtracted from net income;The change in Income Taxes Payable will be added to net income
D) The change in Prepaid Expenses will be added to net income;The change in Income Taxes Payable will be added to net income

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

Correct Answer

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Cannedy Corporation's most recent balance sheet appears below: Cannedy Corporation's most recent balance sheet appears below: The company's net income for the year was $74 and it did not sell or retire any property,plant,and equipment during the year.Cash dividends were $21.The net cash provided by (used in) investing activities for the year was: A) $(53) B) $35 C) $(35) D) $53 The company's net income for the year was $74 and it did not sell or retire any property,plant,and equipment during the year.Cash dividends were $21.The net cash provided by (used in) investing activities for the year was:


A) $(53)
B) $35
C) $(35)
D) $53

E) A) and D)
F) None of the above

Correct Answer

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The most recent balance sheet and income statement of Heldt Corporation appear below: The most recent balance sheet and income statement of Heldt Corporation appear below: The company paid a cash dividend and it did not dispose of any property, plant, and equipment. The company did not purchase any bonds payable or repurchase any of its own common stock. The following questions pertain to the company's statement of cash flows. -The net cash provided by (used in) investing activities for the year was: A) $102 B) $61 C) $(102) D) $(61) The most recent balance sheet and income statement of Heldt Corporation appear below: The company paid a cash dividend and it did not dispose of any property, plant, and equipment. The company did not purchase any bonds payable or repurchase any of its own common stock. The following questions pertain to the company's statement of cash flows. -The net cash provided by (used in) investing activities for the year was: A) $102 B) $61 C) $(102) D) $(61) The company paid a cash dividend and it did not dispose of any property, plant, and equipment. The company did not purchase any bonds payable or repurchase any of its own common stock. The following questions pertain to the company's statement of cash flows. -The net cash provided by (used in) investing activities for the year was:


A) $102
B) $61
C) $(102)
D) $(61)

E) None of the above
F) B) and C)

Correct Answer

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The most recent balance sheet and income statement of Heldt Corporation appear below: The most recent balance sheet and income statement of Heldt Corporation appear below: The company paid a cash dividend and it did not dispose of any property, plant, and equipment. The company did not purchase any bonds payable or repurchase any of its own common stock. The following questions pertain to the company's statement of cash flows. -The net cash provided by (used in) financing activities for the year was: A) $(25) B) $(30) C) $3 D) $(8) The most recent balance sheet and income statement of Heldt Corporation appear below: The company paid a cash dividend and it did not dispose of any property, plant, and equipment. The company did not purchase any bonds payable or repurchase any of its own common stock. The following questions pertain to the company's statement of cash flows. -The net cash provided by (used in) financing activities for the year was: A) $(25) B) $(30) C) $3 D) $(8) The company paid a cash dividend and it did not dispose of any property, plant, and equipment. The company did not purchase any bonds payable or repurchase any of its own common stock. The following questions pertain to the company's statement of cash flows. -The net cash provided by (used in) financing activities for the year was:


A) $(25)
B) $(30)
C) $3
D) $(8)

E) None of the above
F) All of the above

Correct Answer

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Bonner Corporation's balance sheet and income statement appear below: Bonner Corporation's balance sheet and income statement appear below: The company sold equipment for $10 that was originally purchased for $4 and that had accumulated depreciation of $4.It paid a cash dividend during the year and did not issue any bonds payable or repurchase any of its own common stock. Required: Prepare a statement of cash flows for the year using the indirect method. Bonner Corporation's balance sheet and income statement appear below: The company sold equipment for $10 that was originally purchased for $4 and that had accumulated depreciation of $4.It paid a cash dividend during the year and did not issue any bonds payable or repurchase any of its own common stock. Required: Prepare a statement of cash flows for the year using the indirect method. The company sold equipment for $10 that was originally purchased for $4 and that had accumulated depreciation of $4.It paid a cash dividend during the year and did not issue any bonds payable or repurchase any of its own common stock. Required: Prepare a statement of cash flows for the year using the indirect method.

Correct Answer

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The following events occurred last year at Dewhurst Company: The following events occurred last year at Dewhurst Company: Based on the above information,the cash provided (used) by investing activities for the year on the statement of cash flows would net to: A) $(21,000) B) $(15,000) C) $(7,000) D) $(37,000) Based on the above information,the cash provided (used) by investing activities for the year on the statement of cash flows would net to:


A) $(21,000)
B) $(15,000)
C) $(7,000)
D) $(37,000)

E) None of the above
F) A) and D)

Correct Answer

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Showing 1 - 20 of 108

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