21)

 

Col 1

Operating

Direct

Col 2

Operating

Indirect

Col 3

Investing

 

Col 4

Financing

 

Net income

 

 

 

 

 

22)

 

Col 1

Operating

Direct

Col 2

Operating

Indirect

Col 3

Investing

 

Col 4

Financing

 

Decrease in prepaid expenses

 

 

 

 

 

 

 

23) The cash flows from operating activities are reported by the direct method on the statement of cash flow. Determine the following:

a. If sales for the current year were $600,000 and accounts receivable decreased $25,500 during the year, what was the amount of cash received from customers?

b. If sales salaries expense for the current years was $80,000 and sales salaries payable increased $25,000 during the year, what was the amount of cash payments for sales salaries?

 

24) The cash flows from operating activities are reported by the direct method on the statement of cash flows. Determine the following:

a. If accrued expenses showed $50,000 on the income statement and payables increased from $15,000 to $18,500 on the balance sheet, what was the amount of cash paid?

b. If insurance expense showed $10,000 on the income statement and Prepaid Insurance increased from $10,000 to $12,000 on the balance sheet, what was the amount of cash paid for insurance?

21.4   Learning Objective 21-4

 

1) Which of the following is not a cash flow from investing activities?

A) Loaning cash to borrowers

B) Payment of cash dividends

C) Sale or purchase of land

D) Cash received from the sales of stock

 

2) If $12,000 was generated from operations, $6,000 was used for investing activities, and $4,000 was provided by financing activities, the cash balance would:

A) increase by $14,000.

B) decrease by $20,000.

C) increase by $10,000.

D) increase by $2,000.

 

3) The accuracy of the statement of cash flows, regardless of method used, can be verified by computing the change in the balance of:

A) cash.

B) equity.

C) revenue.

D) liabilities.

 

4) Cash generated from operating activities may be computed by using:

A) the indirect method.

B) the direct method.

C) either the direct or indirect method.

D) the combination method.

5) The board of directors is considering approving a plant expansion which will require a sizable advance payment to take place early this year. How will this decision affect the period’s cash flows from investing—direct method?

A) It will increase this period’s cash flows from investing.

B) It will decrease this period’s cash flows from investing.

C) It will not affect this period’s cash flows from investing.

D) This is not listed in the statement of cash flows.

 

 

 



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