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Weston 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. Management wishes to maximize cash flows from operating activities. Weston 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. Management wishes to maximize cash flows from operating activities. A) $332,200. B) $236,800. C) $261,400. D) $186,800. E) $189,400.


A) $332,200.
B) $236,800.
C) $261,400.
D) $186,800.
E) $189,400.

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

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Noncash financing and investing activities are disclosed in the ____________ or in a separate ____________________________.

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Notes; schedule incl...

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The full disclosure principle requires that noncash investing and financing activities be disclosed in the financial statements.

A) True
B) False

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Which of the following is included in the cash flows from financing activities section of the statement of cash flows?


A) Collection of notes receivable.
B) Sale of equipment.
C) Dividends received from investments.
D) Purchase of treasury shares.
E) Purchase of shares in another company.

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

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Explain the purpose and format of the statement of cash flows. Also describe its relevance to decision makers.

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The purpose of the statement of cash flo...

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Define and discuss the differences between operating, investing and financing activities.

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Operating activities involve the day-to-...

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A purchase of land in exchange for a long-term note payable is reported in the investing section of the statement of cash flows.

A) True
B) False

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Castine reports tax-exampt income of $305,000 for the year ended December 31, Year 2. It also reports $93,700 depreciation expense and a $10,000 loss on the sale of equipment. Its comparative balance sheet reveals a $40,200 increase in accounts receivable, a $10,200 decrease in prepaid expenses, a $15,200 increase in accounts payable, a $12,500 decrease in wages payable, and a $100,000 decrease in notes payable. Calculate the new cash provided (used) in operating activities using the indirect method.


A) $461,800.
B) $371,400.
C) $381,400.
D) $351,000.
E) $361,000.

F) B) and D)
G) B) and E)

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The statement of cash flows reports and proves the net change in cash for a reporting period.

A) True
B) False

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The statement of cash flows is:


A) Another name for the statement of financial position.
B) A financial statement that presents information about changes in equity during a period.
C) 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.
D) A financial statement that lists the types and amounts of assets, liabilities, and equity of a business on a specific date.
E) A financial statement that lists the types and amounts of the revenues and expenses of a business for an accounting period.

F) A) and B)
G) A) and C)

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When preparing the operating section of the statement of cash flows using the indirect method, noncash expenses are _____________ net income.

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Preparation of the statement of cash flows involves:


A) Computing the net increase or decrease in cash.
B) Computing and reporting net cash provided or used by operations.
C) Computing and reporting net cash provided or used by investing activities.
D) Computing and reporting net cash provided or used by financing activities.
E) All of these.

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

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In preparing a company's statement of cash flows for the year just ended, the following information is available: Loss on the sale of equipment $ 14,000 Purchase of equipment $145,000 Proceeds from the sale of equipment $126,000 Repayment of outstanding bonds $ 87,000 Purchase of treasury shares $ 62,000 Issuance of ordinary shares $ 96,000 Purchase of land $115,000 Increase in accounts receivable during the year $ 43,000 Decrease in accounts payable during the year $ 75,000 Net cash flows from financing activities for the year were:


A) $130,000 of net cash used by financing activities.
B) $165,000 of net cash used by financing activities.
C) $222,000 of net cash used by financing activities.
D) $53,000 of net cash used by financing activities.
E) $206,000 of net cash used by financing activities.

F) A) and B)
G) B) and D)

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Noncash investing and financing activities may be disclosed in:


A) A note in the financial statements or a schedule attached to the statement of cash flows.
B) The operating activities section of the statement of cash flows.
C) The investing activities section of the statement of cash flows.
D) The financing activities section of the statement of cash flows.
E) The reconciliation of cash balance section.

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

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


A) Operating activities.
B) Financing activities.
C) Investing activities.
D) Schedule of noncash investing or financing activity.
E) Either operating or investing activities.

F) B) and E)
G) A) and B)

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Explain how the cash flows from operating activities section of the statement of cash flows is prepared using the indirect method.

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The indirect method for preparing the op...

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

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


A) Operating activities.
B) Financing activities.
C) Investing activities.
D) Noncash activities.
E) Operating or investing activities.

F) A) and E)
G) B) and E)

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

A) True
B) False

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Beewell's net income for the year ended December 31, Year 2 was $185,000. Information from Beewell's comparative balance sheets is given below. Compute the cash paid for dividends during Year 2. Beewell's net income for the year ended December 31, Year 2 was $185,000. Information from Beewell's comparative balance sheets is given below. Compute the cash paid for dividends during Year 2. A) $79,000. B) $106,000. C) $95,000. D) $50,000. E) $145,000.


A) $79,000.
B) $106,000.
C) $95,000.
D) $50,000.
E) $145,000.

F) A) and B)
G) B) and D)

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