1 / 6

Statement of Cash Flows Practice Questions

Statement of Cash Flows Practice Questions. Chapter 12.

dena
Télécharger la présentation

Statement of Cash Flows Practice Questions

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Statement of Cash FlowsPractice Questions Chapter 12

  2. For each of the following transactions, indicate the direction of the cash flow adjustment [inflow or outflow, add or subtract] and the section in which each transaction should be reported on a Statement of Cash Flows [operating, investing, or financing]. Identify non-cash transactions as supplementary information to be found in the Footnotes of the Financial Statements. • The company purchases its own Common Stock in the open market answer:Cash Outflow; Financing • The company issues Preferred Stock in exchange for Land answer:Supplementary Information in Footnotes • The company borrowed cash from the bank by issuing a 90-day Note answer:Cash Inflow; Financing • Twenty-Year Bonds are issued answer:Cash Inflow; Financing

  3. Accounts Receivable decreased during the year. answer: Add back to Operating Section • Income Tax Payable decreased during the year. answer: Subtract from Operating Section • Accounts Payable increased during the year. answer: Add back to Operating Section • Cash Dividends are declared and paid to Common Stockholders. answer: Cash Outflow; Financing • Common Stock is issued to a creditor to pay off a long term loan. answer: Supplementary information in Footnotes

  4. A new piece of Machinery is acquired with cash. answer: Cash Outflow; Investing • Stock of another company is acquired as an Investment. answer: Cash Outflow; Investing • Interest Payable decreased during the year. answer:Subtract from Operating Section • Wages Payable decreased during the year. answer: Subtract from Operating Section • Gain on Sale of Equipment was recognized in Income. answer: Subtract from Operating Section

  5. Purchased a new Copier by issuing a 90-day Note answer: Supplementary information in Footnotes • Unearned Revenue increased during the year. answer: Add back to Operating Section • Prepaid Insurance increased during the year. answer: Subtract from Operating Section • Sold shares of a long-term investment in Nike Company. answer: Cash Inflow; Investing • Depreciation for Operating Equipment was reported on the Income Statement answer: Add back to Operating Section

  6. Loss on Sale of Land was reported on the Income Statement. answer: Add back to Operating Section

More Related