Statement of Cash Flows
Choose the combination that best reflects the appropriate classification of cash received from operating, investing and financing activities.
Operating Investing Financing
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a.
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Cash paid by customers Sale of operational assets Issuance of bonds payable
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b.
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Dividends received Cash paid by customers Issuance of bonds payable
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c.
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Sale of operational assets Dividends received Cash paid by customers
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d.
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Issuance of bonds payable Sale of operational assets Dividends received
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Which of the following is a non-cash transaction that should be disclosed in a schedule accompanying the statement of cash flows?
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a.
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Sale of an investment for cash
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b.
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Purchase of a machine for cash
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c.
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Issuance of common stock in exchange for land
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d.
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Declaration and payment of a cash dividend on common stock
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Which of the following is not classified as an operating activity?
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a.
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Interest received
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b.
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Interest paid
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c.
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Dividends received
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d.
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Dividends paid
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The amortization of patents should be presented in a statement of cash flows prepared using the indirect method as a(n)
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a.
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inflow and outflow of cash.
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b.
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outflow of cash.
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c.
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addition to net income in the adjustments to reconcile net income to cash from operating activities.
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d.
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deduction from net income in the adjustments to reconcile net income to cash from operating activities.
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Cash inflows from investing activities would include all of the following except
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a.
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proceeds from sale of operating assets.
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b.
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proceeds from sale of investments accounted for by the equity method.
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c.
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interest collect on notes receivable.
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d.
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proceeds from sale of securities available for sale.
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Which of the following would not be a cash flow from financing activities for Carlton Company?
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a.
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Cash from issuance of Carlton Co. common stock
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b.
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Cash from issuance of Carlton Co. preferred stock
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c.
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Cash from issuance of Carlton Co. bonds payable
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d.
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Cash from sale of Fern Company common stock
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Financial information for Roberts Company at December 31, 2011, and for the year then ended, are presented below:
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Balance Sheet
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December 31,
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2011
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2010
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Cash
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$ 31,000
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$ 15,000
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Accounts receivable
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28,500
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30,000
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Allowance for doubtful accounts
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(2,000)
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(1,500)
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Inventory
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15,000
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10,000
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Prepaid insurance
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1,400
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2,400
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Property, plant, and equipment
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81,000
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80,000
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Accumulated depreciation
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(16,000)
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(20,000)
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Land
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81,100
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40,100
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Total assets
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$ 220,000
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$ 156,000
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Accounts payable
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$ 11,000
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$ 10,000
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Wages payable
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1,000
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2,000
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Interest payable
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1,000
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-
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Notes payable, long-term
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46,000
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20,000
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Common stock, nopar
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136,000
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100,000
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Retained earnings
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25,000
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24,000
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Total liabilities and
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stockholders' equity
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$ 220,000
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$ 156,000
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Income Statement
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Sales revenue
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$ 80,000
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Cost of goods sold
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(35,000)
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Depreciation expense
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(5,000)
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Bad debt expense
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(1,000)
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Insurance expense
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(1,000)
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Interest expense
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(2,000)
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Salaries and wages expense
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(12,000)
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Income tax expense
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(3,000)
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Remaining expenses
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(13,000)
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Loss on sale of operational assets
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(2,000)
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Net income
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$ 6,000
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Additional information:
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1.
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Wrote off $500 accounts receivable as uncollectible.
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2.
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Sold an operational asset for $4,000 cash (cost, $15,000, accumulated depreciation, $9,000).
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3.
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Issued common stock for $5,000 cash.
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4.
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Declared and paid a cash dividend of $5,000.
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5.
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Purchased land for $20,000 cash.
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6.
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Acquired land for $21,000, and issued common stock as payment in full.
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7.
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Acquired operational assets, cost $16,000; issued a $16,000, three-year, interest-bearing note payable.
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8.
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Paid a $10,000 long-term note installment by issuing common stock to the creditor.
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9.
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Borrowed cash on a long-term note, $20,000.
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Required:
Prepare the statement of cash flows using the indirect method.