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Exam 12: Statement of Cash Flows

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Question 71

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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. The company's net cash used in investing activities is:

A) $20,000
B) $5,000
C) $45,000
D) $22,000

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

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Question 72

Multiple Choice

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Salsedo Corporation's balance sheet and income statement appear below: Cash dividends were $9. The company sold equipment for $15 that was originally purchased for $10 and that had accumulated depreciation of $5. It did not issue any bonds payable or repurchase any of its own common stock. The net cash provided by (used in) financing activities for the year was:

A) ($9)
B) ($15)
C) ($21)
D) $3

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

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Question 73

Multiple Choice

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Klicker Corporation's most recent balance sheet appears below: The company's net income for the year was $152 and it did not issue any bonds or repurchase any of its common stock during the year. Cash dividends were $40. The net cash provided by (used in) financing activities for the year was:

Morbeck Corporation's net income last year was $56,000. The company paid a cash dividend of $31,000 and did not sell or retire any property, plant, and equipment last year. Changes in selected balance sheet accounts for the year appear below: Based solely on this information, the net cash provided by operating activities under the indirect method on the statement of cash flows would be:

Alden Corporation's most recent comparative Balance Sheet is as follows: Alden's net income was $34,000. No equipment was purchased and no long-term investments were sold. There was a gain of $3,000 when equipment was sold. The accumulated depreciation on the equipment that was sold was $12,000. Cash dividends of $20,000 were declared and paid during the year. Required: Prepare Alden's statement of cash flows using the indirect method.

NOTE TO THE INSTRUCTOR: The problem requirement does not indicate whether the indirect or direct method must be used to determine the net cash provided by operating activities. You can, if you choose, specify that either (or even both) methods be used. The solution contains solutions for both methods. Dauber Corporation's comparative balance sheet and income statement for last year appear below: The company declared and paid a cash dividend of $55,000 during the year. It did not sell any long-term investments, issue any bonds payable, or repurchase any of its own common stock. Required: a. Construct in good form the operating activities section of the company's statement of cash flows for the year. b. Construct in good form the investing activities section of the company's statement of cash flows for the year. c. Construct in good form the financing activities section of the company's statement of cash flows for the year.

Illies Corporation's comparative balance sheet appears below: The company did not dispose of any property, plant, and equipment during the year. Its net income for the year was $5,000 and its cash dividends were $4,000. The company did not issue any bonds payable or purchase any of its own common stock during the year. Its net cash provided by operating activities and net cash used in financing activities are:

Tomlin Corporation prepares its statement of cash flows using the indirect method. Which of the following would be subtracted from net income in the operating activities section of the statement?

Collecting the principal on a loan to another company would be reported on the investing activities section of the statement of cash flows.

Burns Corporation's net income last year was $91,000. Changes in the company's balance sheet accounts for the year appear below: The company did not dispose of any property, plant, and equipment, sell any long-term investments, issue any bonds payable, or repurchase any of its own common stock during the year. The company declared and paid a cash dividend of $4,000. Required: a. Construct in good form the operating activities section of the company's statement of cash flows for the year. (Use the indirect method.) b. Construct in good form the investing activities section of the company's statement of cash flows for the year. c. Construct in good form the financing activities section of the company's statement of cash flows for the year.

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. The company's net cash provided by operating activities is:

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.