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Exam 12: Reporting and Analyzing Cash Flows

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Question 81

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A noncash investing transaction should be disclosed as either a footnote or small schedule attached to the statement of cash flows.

A) True
B) False

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Question 82

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Martin, Inc.'s, income statement is shown below. Based on this income statement and the other information provided, calculate the net cash provided by operations using the indirect method. Additional information:

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Question 83

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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 balance.

Define the cash flow on total assets ratio and explain how it is used to evaluate cash flows and to assess company performance.

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

The appropriate section in the statement of cash flows for reporting the receipt of cash dividends from investments in securities is:

If a company borrows money from a bank, the interest paid on this loan should be reported on the statement of cash flows as a(n) :

Cash flows from interest received are reported in the statement of cash flows as part of:

The cash flow on total assets ratio:

Depreciation expense is not reported on the statement of cash flows when the direct method is used.

The first line item in the operating activities section of a spreadsheet for a statement of cash flows prepared using the indirect method is:

Assume the following information was available for the current year's operations of Jungle Jim's International Market. Use these data to calculate the cash paid for merchandise.

A company's transactions with its creditors to borrow money and/or to repay the principal amounts of loans are reported as cash flows from:

A company had wage expense of $750,000 during a given period. Compute cash paid for wages during this period given the following data.

Use the cash flow on total assets ratio to determine which of these three companies is most efficiently using its assets.

A purchase of land in exchange for shares of stock is disclosed on the statement of cash flows or in a note to the statement.

A company's income statement showed the following: net income, $124,000; depreciation expense, $30,000 and gain on sale of plant assets, $14,000. An examination of the company's current assets and current liabilities showed the following changes as a result of operating activities: accounts receivable decreased $9,400; merchandise inventory increased $18,000; prepaid expenses decreased $6,200; accounts payable increased $3,400. Calculate the net cash provided or used by operating activities.

Based on the following income statement and balance sheet for Montego Bay Corporation, determine the cash flows from operating activities using the direct method.

Based on the following information provided about a company's operations, calculate its cost of goods purchased and its cash paid for merchandise.

The direct method for preparing and reporting the statement of cash flows reports net income and then adjusts the necessary items to calculate net cash provided or used by operating activities.