Pdfcoffee - Cash Flow PDF

Preview

Summary

STATEMENT OF CASH FLOWS1. Information about the sources and uses of an enterprise cash and cash equivalents is provided on the: a. Income statement b. Statement of changes in equity c. Cash flow statement d. Balance sheet 2. “Cash flows” in the cash flow statement are a. Inflows of cash and cash equ...

Description

STATEMENT OF CASH FLOWS 1. Information about the sources and uses of an enterprise cash and cash equivalents is provided on the: a. Income statement b. Statement of changes in equity c. Cash flow statement d. Balance sheet 2. “Cash flows” in the cash flow statement are a. Inflows of cash and cash equivalents b. Outflows of cash and cash equivalents c. Inflows and outflows of cash d. Inflows and outflows of cash and cash equivalents 3. Entities are encouraged to report cash flows from operating activities using a. The direct method, whereby major classes of gross cash receipts and gross cash payments are disclosed. b. The indirect method, whereby profit or loss is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments, and items of income or expense associated with investing or financing cash flows. c. Either a or b d. Neither a nor b 4. Operating activities are a. The principal revenue-producing activities of the entity and other activities that are not investing or financing activities b. The acquisition and disposal of long-term assets and other investments not included in cash equivalents. c. Activities that result in changes in the size and composition of the contributed equity and borrowings of the entity. d. Original and planned investigation undertaken with the prospect of gaining new scientific or technical knowledge and understanding. 5. Cash receipts from royalties, fees and commissions and other revenue are a. Cash outflows for operating activities b. Cash inflows from operating activities c. Cash inflows from investing activities d. Cash outflows for financing activities 6. In the statement of cash flows, receipts from sales of property, plant and equipment would be classified as cash inflows from a. Liquidating activities c. investing activities b. Operating activities. D. Financing activities 7. Cash outflows for financing activities include all, except a. Principal payments to creditors who have extended long-term credit b. Interest payment on loans c. Payments of dividends d. Repayment of amounts borrowed on a short-term bank loan 8. In preparing a statement of cash flows, sale of treasury

b. Cash receipts from sale of equity and debt instruments of other entities held primarily for the purpose of being traded c. Cash receipts from sale of equity instrument representing interests in joint ventures d. Cash payments to employees for short-term employee benefits 10.Which of the following is not part of the cash flows from financing activities? a. Proceeds from sale of the company’s ordinary shares b. Proceeds from issuing bonds, mortgages, and notes c. Proceeds from other short-term or long-term borrowings d. Proceeds from sale of inventories 11.Cash flows provided by (used in) investing activities include the following, except a. Payments to or on behalf of employees b. Purchase of equity instruments classified as available for sale c. Sale of plant and equipment d. Principal collections from loans previously granted by the enterprise. 12.Company uses the direct method to prepare its statement of cash flows. The company had the following cash flows during the current year Cash receipts from the issuance of ordinary shares 400,000 Cash receipts from customers 200,000 Cash receipts from dividends on long-term Investments 30,000 Cash receipts from repayment of loan made to another company 220,000 Cash payment for wages and other operating expenses 120,000 Cash payments for insurance 10,000 Cash payments for dividends 20,000 Cash payments for taxes 40,000 Cash payments to purchase land 80,000 The net cash provided by (used in) operating activities a. 60,000 c. 30,000 b. 40,000 d. (20,000) 13.Word corporation is preparing its statement of cash flows and has provided this information: Net income before taxes 400,000 Depreciation on Property, Plant and Equipment 200,000 Loss on sale of building 100,000 Interest expense 150,000 Interest payable, beginning of the year 100,000 Interest payable, end of the year 50,000 Income taxes paid 100,000 Accounts receivable, beginning of the year 500,000 Accounts receivable, end of the year 850,000 Inventory, Beginning 500,000 Inventory, end of the year 400,000 Accounts payable, beginning of the year 200,000

stock at an amount greater than cost would be classified as a(n) a. Transfer activity c. Investing activity b. Operating activity d. Financing activity 9. Which of the following will not be classified under operating activities in a cash flow statement? a. Cash receipts from sale of goods or rendering of services

Accounts payable. End of the year The net cash provided by operating is a. 750,000 c. 600,000 b. 700,000 d. 500,000

500,000

14. Aklan Company reported net income of 10,000,000 for the current period. Changes occurred in several balance sheet accounts during the period as follows: Investment in shares, carried At equity 2,500,000 increase Premium on bonds payable 500,000 decrease Accumulated depreciation, Caused by major repair 1,000,000 decrease Deferred tax liability 400,000 increase In the current period statement of cash flows, the cash provided by operating activities should be a. 7,400,000 c. 6,400,000 b. 9,400,000 d. 7,000,000 15. Antique Corp. Reported net income of 420,000 for the current period. Changes occurred in several statement of financial position accounts as follows: Equipment 35,000 increase Accumulated depreciation 56,000 increase Note payable 42,000 increase Additional information:  During the year, Antique sold equipment costing 35,000, with accumulated depreciation of 16,800, for a gain of 7,000.  In December of the current year, Antique purchased equipment costing 70,000 with 28,000 cash and a 12% note payable of 42,000.  Depreciation expense for the year was 72,800. In Antiques current period statement of cash flows, net cash used in investing activities should be a. 2,800 c. 16,800 b. 30,800 d. 49,000 16. Capiz Company had the following activities during the current period:  Acquired investment in ordinary shares classified as available for sale for 3,000,000  Sold investment in trading securities for 4,500,000 when the carrying amount was 3,800,000.  Acquired a 5,000,000 one year certificate of deposit from a bank. During the year, interest of 400,000 was received from the bank.  Collected dividends of 800,000 in investments in equity securities. In the current period statement of cash flows, net cash used in investing activities should be a. 8,000,000 c. 3,500,000 b. 6,800,000 d. 3,000,000 17. Warner Limited had the following cash flows during a reporting period:  Acquisition of subsidiary, net of cash flows 250,000  Dividends paid 65,000  Repayment of borrowings 90,000  Interest paid on borrowings 57,000  Proceeds from sale of plant 215,000 What is the amount of the cash flows in relation to

18.The transaction of Tsape Company for the current year included the following: Cash borrowed from bank for purchase Of land 6,000,000 Purchase of land for cash 6,000,000 Sale of securities for cash 1,000,000 Dividend declared (of which 2,000,000 Was paid during the year) 3,000,000 Issuance of ordinary shares for cash 7,000,000 Payment of bank loan including interest Of 500,000 3,500,000 Increase in customers’ deposit 500,000 The current year statement of cash flows should report net cash provided by financing activities at a. 8,000,000 c. 8,500,000 b. 7,500,000 d. 7,000,000 Use the following information for the next two questions. Faye Company collected the following data for the current year: Gain on sale of equipment 60,000 Proceeds from sale of equipment 100,000 Purchase of bond investment (face value, 2,000,000) 1,800,000 Amortization of bond discount 20,000 Dividend declared 450,000 Dividend paid 380,000 Proceeds from sale of treasury shares (cost, 650,000) 750,000 19. What is the net cash provided by financing activities? a. 200,000 c. 300,000 b. 270,000 d. 370,000 20. What is the net cash used in investing activities? a. 1,700,000 c. 1,880,000 b. 1,760,000 d. 1,940,000 Use the following information for the next five questions. The following is a list of the items to be included in the preparation of the current year statement of cash flows for the Norhan Company a) Net income, 59,200 b) Payment for purchase of building, 98,000 c) Increase in accounts receivable, 7,400 d) Proceeds from issuance of ordinary shares, 37,100 e) Increase in accounts payable, 4,500 f) Proceeds from sale of land, 7,000 g) Depreciation expense, 12,600 h) Payment of dividends, 36,000 i) Gain on sale of land, 5,300 j) Decrease in inventory, 3,700 k) Payment for purchase of long term investments, 9,600 l) Amortization of discount on bonds payable, 1,900 m) Proceeds from issuance of note, 18,000 n) Increase in deferred taxes payable, 5,000 o) Equipment acquired by finance lease, 19,500 p) Decrease in salaries payable, 2,300...