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Partin Corporation's cash and cash equivalents consist of cash and marketable securities.Last year the company's cash account increased by $31,000 and its marketable securities account decreased by $22,000.Net cash provided by (used in) operating activities was $108,000.Net cash provided by (used in) financing activities was $(70,000) .Based on this information,the net cash provided by (used in) investing activities on the statement of cash flows was:


A) $9,000
B) ($29,000)
C) $38,000
D) ($38,000)

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

Correct Answer

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The statement of cash flows relies on a fundamental principle of double-entry bookkeeping; namely,the change in the cash balance must equal the change in total liabilities and stockholders' equity.

A) True
B) False

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When computing the net cash provided by operating activities using the indirect method on the statement of cash flows,which item below would NOT be added to net income?


A) Depreciation.
B) Loss on the sale of an asset.
C) Decrease in accounts payable.
D) Decrease in prepaid expenses.

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

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When computing the net cash provided by operating activities under the indirect method on the statement of cash flows,a decrease in common stock would be subtracted from net income.

A) True
B) False

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The most recent balance sheet and income statement of Penaloza Corporation appear below: The most recent balance sheet and income statement of Penaloza Corporation appear below: The company paid a cash dividend of $18. It did not dispose of any property, plant, and equipment. The company did not retire 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) $72 B) $104 C) $(104) D) $(72) The most recent balance sheet and income statement of Penaloza Corporation appear below: The company paid a cash dividend of $18. It did not dispose of any property, plant, and equipment. The company did not retire 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) $72 B) $104 C) $(104) D) $(72) The company paid a cash dividend of $18. It did not dispose of any property, plant, and equipment. The company did not retire 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) $72
B) $104
C) $(104)
D) $(72)

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

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Negative free cash flow suggests that the company generated enough cash flow from its operating activities to fund its capital expenditures and dividend payments.

A) True
B) False

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Krech Corporation's comparative balance sheet appears below: Krech Corporation's comparative balance sheet appears below: The company's net income (loss) for the year was ($3,000) and its cash dividends were $3,000. It did not sell or retire any property, plant, and equipment during the year. The company uses the indirect method to determine the net cash provided by operating activities. -Which of the following is correct regarding the operating activities section of the statement of cash flows? A) The change in Accounts Payable will be added to net income; The change in Accrued Liabilities will be subtracted from net income B) The change in Accounts Payable will be subtracted from net income; The change in Accrued Liabilities will be added to net income C) The change in Accounts Payable will be subtracted from net income; The change in Accrued Liabilities will be subtracted from net income D) The change in Accounts Payable will be added to net income; The change in Accrued Liabilities will be added to net income The company's net income (loss) for the year was ($3,000) and its cash dividends were $3,000. It did not sell or retire any property, plant, and equipment during the year. The company uses the indirect method to determine the net cash provided by operating activities. -Which of the following is correct regarding the operating activities section of the statement of cash flows?


A) The change in Accounts Payable will be added to net income; The change in Accrued Liabilities will be subtracted from net income
B) The change in Accounts Payable will be subtracted from net income; The change in Accrued Liabilities will be added to net income
C) The change in Accounts Payable will be subtracted from net income; The change in Accrued Liabilities will be subtracted from net income
D) The change in Accounts Payable will be added to net income; The change in Accrued Liabilities will be added to net income

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

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Dukas Corporation's net cash provided by operating activities was $218,000; its net income was $203,000; its capital expenditures were $146,000; and its cash dividends were $49,000. Required: Determine the company's free cash flow.

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Free cash flow = Net cash prov...

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Frankin Corporation's net cash provided by operating activities was $192; its capital expenditures were $154; and its cash dividends were $27.The company's free cash flow was:


A) $38
B) $373
C) $11
D) $165

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

Correct Answer

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Walmouth Corporation's comparative balance sheet and income statement for last year appear below: Walmouth Corporation's comparative balance sheet and income statement for last year appear below: The company declared and paid a cash dividend of $54,000 during the year. It did not purchase or dispose of any property, plant, and equipment. It did not issue any bonds 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) operating activities last year was: A) $105,000 B) $58,000 C) $130,000 D) $152,000 Walmouth Corporation's comparative balance sheet and income statement for last year appear below: The company declared and paid a cash dividend of $54,000 during the year. It did not purchase or dispose of any property, plant, and equipment. It did not issue any bonds 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) operating activities last year was: A) $105,000 B) $58,000 C) $130,000 D) $152,000 The company declared and paid a cash dividend of $54,000 during the year. It did not purchase or dispose of any property, plant, and equipment. It did not issue any bonds 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) operating activities last year was:


A) $105,000
B) $58,000
C) $130,000
D) $152,000

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

Correct Answer

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Megan Corporation's net income last year was $98,000. Changes in the company's balance sheet accounts for the year appear below: Megan Corporation's net income last year was $98,000. Changes in the company's balance sheet accounts for the year appear below: The company paid a cash dividend of $36,000 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) $(46,000) B) $46,000 C) $(10,000) D) $10,000 The company paid a cash dividend of $36,000 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) $(46,000)
B) $46,000
C) $(10,000)
D) $10,000

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

Correct Answer

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Megan Corporation's net income last year was $98,000. Changes in the company's balance sheet accounts for the year appear below: Megan Corporation's net income last year was $98,000. Changes in the company's balance sheet accounts for the year appear below: The company paid a cash dividend of $36,000 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 free cash flow for the year was: A) $123,000 B) $87,000 C) $142,000 D) $269,000 The company paid a cash dividend of $36,000 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 free cash flow for the year was:


A) $123,000
B) $87,000
C) $142,000
D) $269,000

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

Correct Answer

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Buckley Corporation's most recent comparative balance sheet appears below: Buckley Corporation's most recent comparative balance sheet appears below: The company's net income for the year was $91 and it paid a cash dividend of $22. It did not dispose of any property, plant, and equipment during the year. The company did not retire 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) $(69) B) $69 C) $136 D) $(136) The company's net income for the year was $91 and it paid a cash dividend of $22. It did not dispose of any property, plant, and equipment during the year. The company did not retire 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) $(69)
B) $69
C) $136
D) $(136)

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

Correct Answer

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Majorn Auto Parts Store had net income of $81,000 for the year just ended.Majorn collected the following additional information to prepare its statement of cash flows for the year: Majorn Auto Parts Store had net income of $81,000 for the year just ended.Majorn collected the following additional information to prepare its statement of cash flows for the year: Majorn uses the indirect method to prepare its statement of cash flows.What is Majorn's net cash provided by (used in) operating activities? A) $41,000 B) $(53,000) C) $185,000 D) $279,000 Majorn uses the indirect method to prepare its statement of cash flows.What is Majorn's net cash provided by (used in) operating activities?


A) $41,000
B) $(53,000)
C) $185,000
D) $279,000

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

Correct Answer

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Spackel Corporation recorded the following events last year: Spackel Corporation 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) $(8,000) B) $(14,000) C) $104,000 D) $1,286,000 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) $(8,000)
B) $(14,000)
C) $104,000
D) $1,286,000

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

Correct Answer

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Paying wages and salaries to employees is classified as a cash outflow in the operating activities section of the statement of cash flows.

A) True
B) False

Correct Answer

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Autry Corporation's balance sheet and income statement appear below: Autry Corporation's balance sheet and income statement appear below: Cash dividends were $40.The company sold equipment for $19 that was originally purchased for $6 and that had accumulated depreciation of $4.The net cash provided by (used in) investing activities for the year was: A) $19 B) $140 C) ($159) D) ($140) Autry Corporation's balance sheet and income statement appear below: Cash dividends were $40.The company sold equipment for $19 that was originally purchased for $6 and that had accumulated depreciation of $4.The net cash provided by (used in) investing activities for the year was: A) $19 B) $140 C) ($159) D) ($140) Cash dividends were $40.The company sold equipment for $19 that was originally purchased for $6 and that had accumulated depreciation of $4.The net cash provided by (used in) investing activities for the year was:


A) $19
B) $140
C) ($159)
D) ($140)

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

Correct Answer

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Cash received from the sale of equipment the company had used in its own operations would be considered an operating activity on a statement of cash flows.

A) True
B) False

Correct Answer

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Investing activities on the statement of cash flows generate cash inflows and outflows related to borrowing from and repaying principal to creditors and completing transactions with the company's owners such as selling or repurchasing shares of common stocks and paying dividends.

A) True
B) False

Correct Answer

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Buckley Corporation's most recent comparative balance sheet appears below: Buckley Corporation's most recent comparative balance sheet appears below: The company's net income for the year was $91 and it paid a cash dividend of $22. It did not dispose of any property, plant, and equipment during the year. The company did not retire any bonds payable or repurchase any of its own common stock. -The net cash provided by (used in) operating activities for the year was: A) $32 B) $59 C) $130 D) $150 The company's net income for the year was $91 and it paid a cash dividend of $22. It did not dispose of any property, plant, and equipment during the year. The company did not retire any bonds payable or repurchase any of its own common stock. -The net cash provided by (used in) operating activities for the year was:


A) $32
B) $59
C) $130
D) $150

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

Correct Answer

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