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Exam 12: Reporting Cash Flows

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Question 61

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________ activities generally include those transactions and events that affect long-term assets.

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Question 62

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________ activities include those transactions that affect long-term liabilities and equity.

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Question 63

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For each of the following items, indicate whether it would be classified as an (O) operating activity, an (I) investing activity, a (F) financing activity, or a significant (N) noncash financing and investing activity. -Purchased land in exchange for a note payable.

The purchase of stock in another company is classified as a financing activity.

For each of the following items, indicate whether it would be classified as either an (O) operating activity, an (I) investing activity, a (F) financial activity, or a significant (N) noncash financing and investing activity. -Signed a note payable in exchange for cash.

The direct method for the preparation of the operating activities section of the statement of cash flows:

Keita Co.reported net income of $213.4 million,net cash provided by operating activities of $151.3 million,total cash flows of $187.7 million,and average total assets of 2,314.8 million at the end of the year.Calculate the cash flow on total assets ratio for Keita.

Define and explain significant noncash investing and financing activities and the method of reporting them on the statement of cash flows.

In preparing a company's statement of cash flows for the most recent year using the indirect method,the following information is available: $\begin{array} { | l | r | } \hline \text { Net income for the year was } & \$ 52,000 \\\hline \text { Accounts payable increased by } & 18,000 \\\hline \text { Accounts receivable decreased by } & 25,000 \\\hline \text { Inventories increased by } & 5,000 \\\hline \text { Depreciation expense was } & 30,000 \\\hline\end{array}$ Net cash provided by operating activities was:

The accountant for Crusoe Company is preparing the company's statement of cash flows for the fiscal year just ended.The following information is available: $\begin{array} { | l | r | } \hline \text { Retained earnings balance at the beginning of the year } & \$ 126,000 \\\hline \text { Cash dividends declared for the year } & 46,000 \\\hline \text { Proceeds from the sale of equipment } & 81,000 \\\hline \text { Gain on the sale of equipment } &7,000 \\\hline \text { Cash dividends payable at the beginning of the year } &18,000\\\hline \text { Cash dividends payable at the end of the year } & 20,000 \\\hline \text { Net income for the year } & 92,000\end{array}$ The amount of cash dividends paid during the year would be:

For each of the following items, indicate whether it would be classified as either an (O) operating activity, an (I) investing activity, a (F) financial activity, or a significant (N) noncash financing and investing activity. -Sale of land for cash.

A main purpose of the statement of cash flows is to report all the major cash ________ and cash ________.

The statement of cash flows explains how transactions and events impact the end-of-period cash balance to produce the end-of-period net income.

The appropriate section in the statement of cash flows for reporting the purchase of equipment for cash is:

Since it is recommended by the FASB,the direct method of preparing the statement of cash flows is most frequently used.

For each of the following items, indicate whether it would be classified as either an (O) operating activity, an (I) investing activity, a (F) financial activity, or a significant (N) noncash financing and investing activity. -Purchased equipment for cash.

The cash flow on total assets ratio:

Explain the value of separating cash flows into operating activities,investing activities,and financing activities to financial statement users in analyzing cash flows and the company's financial performance and condition.

Explain how cash flows from investing and financing activities are determined.

For each of the following items, indicate whether it would be classified as either an (O) operating activity, an (I) investing activity, a (F) financial activity, or a significant (N) noncash financing and investing activity. -Purchased a warehouse in exchange for shares of its stock.