1.value:
10.00 points
Addams Corporation paid cash dividends totaling $75,000 during its most recent fiscal year. How should this information be reported on Addam's statement of cash flows?
In financing activities as a source of funds.
In financing activities as a use of funds.
In investing activities as a use of funds.
In investing activities as a source of funds.
In operating activities as a source of funds.
Question-2
Northington, Inc. is preparing the company's statement of cash flows for the fiscal year just ended. Using the following information, determine the amount of cash flows from operating activities using the indirect method:
| Net income | $182,000 |
| Gain on the sale of equipment | 12,300 |
| Proceeds from the sale of equipment | 92,300 |
| Depreciation expense—equipment | 50,000 |
| Payment of bonds at maturity | 100,000 |
| Purchase of land | 200,000 |
| Issuance of common stock | 300,000 |
| Increase in merchandise inventory | 35,400 |
| Decrease in accounts receivable | 28,800 |
| Increase in accounts payable | 23,700 |
| Payment of cash dividends | 32,000 |
$189,400.
$332,200.
$236,800.
$261,400.
$186,800.
Hint: Net Income +Depreciation expense (equipment)-Gain on sale of equipment-INC in merchandise Inventory+DEC in accounts receivable+INC in accounts payable
= 182000+50000-12300-35400+28800+23700
Question-3
Business activities that generate or use cash are classified as operating, investing, or financing activities on the statement of cash flows.
True
False
Question-4
Conversion of preferred stock to common stock is disclosed in the financing section of the statement of cash flows.
True
False
Question-5
The statement of cash flows is:
A financial statement that reports the cash inflows and cash outflows for an accounting period, and that classifies those cash flows as operating activities, investing activities, or financing activities.
A financial statement that lists the types and amounts of assets, liabilities, and equity of a business on a specific date.
A financial statement that lists the types and amounts of the revenues and expenses of a business for an accounting period.
A financial statement that presents information about changes in equity during a period.
Another name for the statement of financial position.
Question-6
Both the direct and indirect methods yield the identical net cash flow amount provided or used by operating activities.
True
False
Question-7
The gain or loss from retirement of debt is reported under cash flows from operating activities on the statement of cash flows using the direct method.
True
False
Question-8
A purchase of land in exchange for a long-term note payable is reported in the investing section of the statement of cash flows.
True
False
Question-9
Jamison Company reports depreciation expense of $35,000 for Year 2. Also, equipment costing $140,000 was sold for a $5,000 gain in Year 2. The following selected information is available for Jamison Company from its comparative balance sheet. Compute the cash received from the sale of the equipment.
| At December 31 | Year 2 | Year 1 |
| Equipment | $610,000 | $750,000 |
| Accumulated Depreciation-Equipment | 428,000 | 500,000 |
$23,000.
$40,000.
$67,000.
$35,000.
$38,000.
Question-10
The appropriate section in the statement of cash flows for reporting the purchase of equipment for cash is:
Financing activities.
Schedule of noncash investing or financing activity.
Investing activities.
Operating activities.
This is not reported on the statement of cash flows.
Question-11
Use the following information to calculate cash received from dividends:
| Dividends revenue | $63,500 |
| Dividends receivable, January 1 | 3,600 |
| Dividends receivable, December 31 | 3,100 |
$63,000.
$60,400.
$63,500.
$64,000.
$67,100.
Question-12
When analyzing the changes on a spreadsheet used to prepare a statement of cash flows, the cash flows from financing activities generally affect:
Noncurrent liability and equity accounts.
Noncurrent assets.
Net income, current assets, and current liabilities.
Equity accounts only.
Both noncurrent assets and noncurrent liabilities.
Question-13
A spreadsheet can help organize the information needed to prepare a statement of cash flows.
True
False
Question-14
In preparing a company's statement of cash flows for the most recent year using the indirect method, the following information is available:
| Net income for the year was | $52,000 |
| Accounts payable increased by | $18,000 |
| Accounts receivable decreased by | $25,000 |
| Inventories increased by | $5,000 |
| Depreciation expense was | $30,000 |
Net cash provided by operating activities was:
$80,000.
$60,000.
$130,000.
$70,000.
$120,000.
Question-15
The first line item in the operating activities section of a spreadsheet for a statement of cash flows prepared using the indirect method is:
Net income.
Cash received from customers.
Adjustments to net income.
Cash.
Increase (decrease) in accounts receivable.
Question-16
Of the following, which one affects cash during a period?
Writing off an uncollectible account receivable.
The declaration of a cash dividend.
The declaration of a stock dividend.
The payment of interest expense accrued in a previous accounting period.
An adjusting entry recognizing the expiration of prepaid insurance.
Question-17
The cash flow on total assets ratio is calculated by:
Dividing average total assets by total cash flows.
Dividing total cash flows by average total assets.
Dividing cash flows from operations by average total assets.
Dividing average total assets by cash flows from investing activities.
Total cash flows divided by average total assets times 365.
Question-18
Managers only use the cash flow statement to evaluate the net cash increase or decrease, and do not pay much attention to the details of cash flows from operating activities, cash flows from investing activities, and cash flows from financing activities.
True
False
Question-19
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):
This is not reported in the statement of cash flows.
Financing activity.
Operating activity.
Noncash investing and financing activity.
Investing activity.
Question-20
Which of the following transactions or events should be reported as a source of cash from operating activities when using the direct method?
Cash collections from customers.
Cash received from the sale of a building.
Depreciation expense.
Cash received from the sale of treasury stock.
Credit sales.
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