Help Save & Exit Which of the following items do we report in the statement of cash flows using the direct method? Multiple Choice 39 19 Depreciation expense. Cash paid to suppliers. Gain on sale of an asset. Loss on sale of an asset. C raw < Prev 19 of 20 Next > hp
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- Preparing Net Cash Flows from Operating Activities-Direct Method Colassard Industries has the following data available for preparation of its statement of cash flows: Required: Prepare the cash flows from operating activities section of the statement of cash flows using the direct method.Reporting Net Cash Flow from Operating Activities The following information is available for Cornelius Inc: Required: 1. Compute the net cash flows from operating activities using the indirect method. 2. CONCEPTUAL CONNECTION Explain why Cornelius was able to report net cash flow from operating activities that was higher than net income. 3. CONCEPTUAL CONNECTION What could the difference between net income and cash flow from operating activities signal to financial statement users?Classification of Cash Flows The following are several items that might be disclosed on a companys statement of cash flows presented using the indirect method. a. Net income b. Depreciation expense c. Issuance of common stock d. Loss on disposal of equipment e. Purchase of a building f. Decrease in accounts payable g. Converted bonds into common stock h. Sale of long-term investment i. Payment of interest j. Increase in inventory Required: 1. Indicate whether each item should be classified as a cash flow from operating activities, cash flow from investing activities, cash flow from financing activities, or noncash investing and financing activity. 2. CONCEPTUAL CONNECTION Why is the proper classification of cash flows important?
- Preparing Net Cash Flows from Operating Activities-Direct Method Refer to the information for Granville Manufacturing Company. Required: Prepare the cash flows from operating activities section of the statement of cash flows using the direct method.Use the following information from Jumper Companys financial statements to determine operating net cash flows (indirect method).Classifying Items in the Statement of Cash Flows The following items are commonly reported in a statement of cash flows (indirect method presentation). For each item 1 through 20, determine (a) in which section the item is presented (operating, investing, or financing) and (b) whether the associated dollar amount is added or subtracted in the statement. (a) (b) 1. Payments of short-term debt. AnswerOperatingInvestingFinancing AnswerAddSubtract 2. Repurchases of common stock. AnswerOperatingInvestingFinancing AnswerAddSubtract 3. Purchases of property and equipment. AnswerOperatingInvestingFinancing AnswerAddSubtract 4. Sale of investments classified as long-term. AnswerOperatingInvestingFinancing AnswerAddSubtract 5. Proceeds from the issuance of common stock. AnswerOperatingInvestingFinancing AnswerAddSubtract 6. Increase in prepaid expenses and other current assets. AnswerOperatingInvestingFinancing AnswerAddSubtract 7. Acquisition for cash of a competitor.…
- 1919m2LSFAJxzbwov4D68iWUmoFzSg/formResponse?pli=1 1. The following item would be classified as an investing activity on the statement of cash flows: * O A) Payments for inventory. O B) Acquisitions of equipment. O C) Proceeds from borrowing. O D) Payments on loans. O E) None of the above. 2. Common-size income statement prepared when: O A) Each income statement item is expressed as a percentage of total assets. O B) Each income statement item is expressed as a percentage of net sales. O C) Each income statement item is expressed as a percentage of net income. D) Each income statement item is expressed as a percentage of cash flow O E) None of the above 9:59 AM eD 40 ENG 22-Dec-2021 M TOSHIR O O O OOWhich of the following will be reflected in the "Cash flows from operating activities" of a Statement of Cash Flows? O A. Adjustment for depreciation O B. Purchase of equipment O C. Increase or decrease in loans O D. Purchase of inventory Previous page nttps://mancosaconnectacza/mad/ouiz/attempt.php?attempt=446654&cmid=D181433&page=18%3D Tume bere to search IIWhich of the following shows how paying cash to purchase suppites will affect a company's financial statements? Multiple Choice Assets Assets Balance Sheet Llab, + NA Assets Balance Sheet Liab. + Equity NA Balance Sheet Assets - Llab -10 NA Equity NA Balance Sheet Llab. NA Equity NA Equity Rev NA Rev. NA Rev NA Rev. NA Income Statement Exp NA Net Inc. NA Income Statement - Exp. Net Inc. Income Statement Exp NA -Net Inc. NA Income Statement Exp NA Net Inc. NA Statement of Cash Flows - OA Statement of Cash Flows NA Statement of Cash Flows NA Statement of Cash Flows
- Classifying items on the indirect statement of cash flows The statement of cash flows categorizes like transactions for optimal reporting. Identify each item as a(n): • Operating activity—addition to net income (O+) or subtraction from net income (O–) • Investing activity—cash inflow (I+) or cash outflow (I–) • Financing activity—cash inflow (F+) or cash outflow (F–) • Non-cash investing and financing activity (NIF) • Activity that is not used to prepare the indirect statement of cash flows (N) The indirect method is used to report cash flows from operating activities. a. Loss on sale of land. b. Acquisition of equipment by issuance of note payable. c. Payment of long-term debt. d. Acquisition of building by issuance of common stock. e. Increase in Salaries Payable. f. Decrease in Merchandise Inventory. g. Increase in Prepaid Expenses. h. Decrease in Accrued Liabilities. i. Cash sale of land. j. Issuance of long-term note payable to borrow cash. k. Depreciation Expense. l. Purchase of…Match (by letter) the following items with the description or example that best fits. Each letter is used only once.Terms1. Operating activities.2. Investing activities.3. Financing activities.4. Noncash activities.5. Indirect method.6. Direct method.7. Depreciation expense.8. Cash return on assets.Descriptionsa. Begins with net income and then lists adjustments to net income in order to arrive at operating cash flows.b. Item included in net income, but excluded from net operating cash flows.c. Net cash flows from operating activities divided by average total assets.d. Cash transactions involving lenders and investors.e. Cash transactions involving net income.f. Cash transactions for the purchase and sale of long-term assets.g. Purchase of long-term assets by issuing stock to seller.h. Shows the cash inflows and outflows from operations such as cash received from customers and cash paid for inventory, salaries, rent, interest, and taxes.Classifying items on the indirect statement of cash flows The statement of cash flows categorizes like transactions for optimal reporting. Identify each item as a(n): Operating activity—addition to net income (O+) or subtraction from net income (O–) Investing activity—cash inflow (I+) or cash outflow (I–) Financing activity—cash inflow (F+) or cash outflow (F–) Non-cash investing and financing activity (NIF) Activity that is not used to prepare the indirect statement of cash flows (N) The indirect method is used to report cash flows from operating activities. Loss on sale of land. Acquisition of equipment by the issuance of note payable. Payment of long-term debt. Acquisition of building by the issuance of common stock. Increase in Salaries Payable. The decrease in Merchandise Inventory. Increase in Prepaid Expenses. The decrease in Accrued Liabilities. Cash sale of land. Issuance of long-term note payable to borrow cash. Depreciation Expense. Purchase of treasury stock. Issuance of…
