Chapter 12, Statement Of Cash Flows Video Solutions, Financial Accounting for Undergraduates

Problem 1

Which of the following is not disclosed in a statement of cash flows?
a. A transfer of cash to a cash equivalent investment
b. The amount of cash at year-end
c. Cash outflows from investing activities during the period
d. Cash inflows from financing activities during the period

Puneet Prajapati

Numerade Educator

01:58

Problem 2

Which of the following events will appear in the cash flows from investing activities section of the statement of cash flows?
a. Cash received as interest
b. Cash received from issuance of common stock
c. Cash purchase of truck
d. Cash payment of dividends

Natalie Britton

Numerade Educator

01:58

Problem 3

Which of the following events will appear in the cash flows from financing activities section of the statement of cash flows?
a. Cash purchase of equipment
b. Cash purchase of bonds issued by another company
c. Cash received as repayment for funds loaned
d. Cash purchase of treasury stock

Natalie Britton

Numerade Educator

01:25

Problem 4

Tyler Company has net income of $$\$ 49,000$$ and the following related items:
Using the indirect method, what is Tyler's cash flow from operations?
a. $$\$ 42,000$$
c. $$\$ 58,000$$
b. $$\$ 46,000$$
d. $$\$ 38,000$$

Narayan Hari

Numerade Educator

01:46

Problem 5

Free cash flow is a measure of a firm's
a. interest free debt.
b. ability to generate net income.
c. ability to generate cash and invest in new capital expenditures.
d. ability to collect accounts receivable in a timely manner.

Oluwadamilola Ameobi

Numerade Educator

01:58

Problem 6

Which of the following events will not appear in the cash flows from financing activities section of the statement of cash flow?
a. Borrowing cash from a bank
b. Issuance of stock in exchange for plant assets
c. Sales of common stock
d. Payment of dividends on preferred stock

Natalie Britton

Numerade Educator

01:25

Problem 7

Taylor Company reports free cash flow of $\$ 15,000$, total cash of $\$ 18,000$, net income of $\$ 50,000$, current assets of $\$ 90,000$, average current liabilities of $\$ 38,400$, and cash flow from operating activities of $\$ 48,000$. Compute the operating-cash-flow-to-current-liabilities ratio for Taylor Company.
a. $0.83$
b. $0.80$
c. $0.30$
d. $1.25$

Narayan Hari

Numerade Educator

06:55

Problem 8

Which of the following is not a cash equivalent?
a. Short-term U.S. Treasury bill
b. Short-term certificate of deposit
c. Money-market account
d. IBM common stock

Pragya Ahuja

Numerade Educator

02:44

Problem 9

Which of the following expenses are not added back to net income when using the indirect method to prepare a statement of cash flows?
a. Amortization expense
b. Depletion expense
c. Interest expense
d. Depreciation expense

Puneet Prajapati

Numerade Educator

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Problem 10

Smith \& Sons reports interest expense of $\$ 90,000$ on its income statement. The beginning and ending balances for interest payable reported on its balance sheet are $\$ 15,000$ and $\$ 10,000$, respectively. How much cash did Smith \& Sons pay for interest expense this period?
a. $\$ 85,000$
b. $\$ 95,000$
c. $\$ 100,000$
d. $\$ 105,000$

Danielle Fairburn

Numerade Educator

01:15

Problem 11

Which of the following methods will disclose the cash received from customers in the statement of cash flows?
a. Indirect method
b. Reconciliation method
c. Direct method
d. Both direct and indirect methods

James Kiss

Numerade Educator

02:25

Problem 12

Smith \& Sons reports sales revenue of $\$ 1,000,000$ on its income statement. Its balance sheet reveals beginning and ending accounts receivable of $\$ 92,000$ and $\$ 60,000$, respectively. What is the amount of cash collected from customers of the company?
a. $\$ 1,032,000$
b. $\$ 968,000$
c. $\$ 1,060,000$
d. $\$ 1,092,000$

Riham Bassal

Numerade Educator