137) A machine with a cost of $130,000, accumulated depreciation of $85,000, and current year
depreciation expense of $17,000 is sold for $40,000 cash. The amount that should be reported as
a source of cash under cash flows from investing activities is:
A) $45,000.
B) $5,000.
C) $17,000.
D) $28,000.
E) $40,000.
138) A machine with a cost of $130,000 and accumulated depreciation of $85,000 is sold for
$40,000 cash. The total amount that should be reported in the operating section of the statement
of cash flow as per indirect method is:
A) $17,000.
B) $4,000.
C) $57,000.
D) $21,000.
E) $5,000.
139) A company reported that its bonds with a par value of $50,000 and a carrying value of
$57,000 are retired for $60,000 cash, resulting in a loss of $3,000. The amount to be reported
under cash flows from financing activities is:
A) $(3,000).
B) $(60,000).
C) $(57,000).
D) $7,000.
E) $(7,000).
140) Atom Corporation paid cash dividends totaling $75,000 during its most recent fiscal year.
How should this information be reported on Atom’s statement of cash flows?
A) In operating activities as a source of funds.
B) In investing activities as a source of funds.
C) In investing activities as a use of funds.
D) In financing activities as a source of funds.
E) In financing activities as a use of funds.
141) Use the following information to calculate cash received from dividends:
Dividends revenue
$
29,800
Dividends receivable, January 1
2,600
Dividends receivable, December 31
3,400
A) $26,400.
B) $29,000.
C) $29,800.
D) $30,600.
E) $32,400.
Cash
$
29,000
Dividends Receivable
$
Dividends Revenue
$
29,800
142) Use the following information to calculate cash received from dividends:
Dividends revenue
$
63,500
Dividends receivable, January 1
3,600
Dividends receivable, December 31
3,100
A) $63,500.
B) $63,000.
C) $64,000.
D) $67,100.
E) $60,400.
Cash
$
64,000
Dividends Receivable
$
Dividends Revenue
$
63,500
143) Analysis reveals that a company had a net increase in cash of $20,000 for the current year.
Net cash provided by operating activities was $18,000; net cash used in investing activities was
$10,000 and net cash provided by financing activities was $12,000. If the year-end cash balance
is $24,000, the beginning cash balance was:
A) $4,000.
B) $16,000.
C) $44,000.
D) $40,000.
E) $39,000.
144) Stormer Company reports the following amounts on its statement of cash flow: Net cash
provided by operating activities was $28,000; net cash used in investing activities was $10,000
and net cash used in financing activities was $12,000. If the beginning cash balance is $5,000,
what is the ending cash balance?
A) $55,000.
B) $45,000.
C) $31,000.
D) $6,000.
E) $11,000.
145) Bagrov Corporation had a net decrease in cash of $10,000 for the current year. Net cash
used in investing activities was $52,000 and net cash used in financing activities was $38,000.
What amount of cash was provided (used) in operating activities?
A) $100,000 provided.
B) $(100,000) used.
C) $80,000 provided.
D) $(80,000) used.
E) $(10,000) used.
146) The accountant for Crusoe Company is preparing the company’s statement of cash flows for
the fiscal year just ended. The following information is available:
Retained earnings balance at the beginning of the year
$
126,000
Cash dividends declared for the year
46,000
Proceeds from the sale of equipment
81,000
Gain on the sale of equipment
7,000
Cash dividends payable at the beginning of the year
18,000
Cash dividends payable at the end of the year
20,000
Net income for the year
92,000
What is the ending balance for retained earnings?
A) $218,000.
B) $170,000.
C) $352,000.
D) $172,000.
E) $179,000.
Beginning balance
Net income for the year
92,000
Cash dividends declared
)
Ending balance
147) The accountant for Walter Company is preparing the company’s statement of cash flows for
the fiscal year just ended. The following information is available:
Retained earnings balance at the beginning of the year
$
126,000
Cash dividends declared for the year
46,000
Proceeds from the sale of equipment
81,000
Gain on the sale of equipment
7,000
Cash dividends payable at the beginning of the year
18,000
Cash dividends payable at the end of the year
20,000
Net income for the year
92,000
The amount of cash dividends paid during the year would be:
A) $48,000.
B) $46,000.
C) $8,000.
D) $64,000.
E) $44,000.
Cash dividends payable at the beginning of the year
18,000
Cash dividends declared during the year
46,000
Cash dividends payable at the end of the year
)
Cash dividends paid during the year
44,000
148) The accountant for TI Company is preparing the company’s statement of cash flows for the
fiscal year just ended. The following information is available:
Retained earnings balance at the beginning of the year
$
151,000
Cash dividends declared for the year
46,000
Net income for the year
92,000
What is the ending balance for retained earnings?
A) $264,000.
B) $13,000.
C) $243,000.
D) $197,000.
E) $105,000.
Beginning balance
Net income for the year
92,000
Cash dividends declared
)
Ending balance
149) The accountant for Sysco Company is preparing the company’s statement of cash flows for
the fiscal year just ended. The following information is available:
Retained earnings balance at the beginning of the year
$
819,000
Net income for the year
230,000
Cash dividends declared for the year
42,000
Retained earnings balance at the end of the year
1,007,000
Cash dividends payable at the beginning of the year
10,000
Cash dividends payable at the end of the year
11,000
What is the amount of cash dividends paid that should be reported in the financing section of the
statement of cash flows?
A) $42,000.
B) $43,000.
C) $63,000.
D) $1,000.
E) $41,000.
Cash dividend declared
$
42,000
Plus cash dividend payable, beginning
10,000
Less cash dividend payable, ending
(11,000
)
Cash dividend paid
$
41,000
150) In preparing a company’s statement of cash flows for the most recent year, the following
information is available:
Loss on the sale of equipment
$
14,000
Purchase of equipment
225,000
Proceeds from the sale of equipment
106,000
Repayment of outstanding bonds
87,000
Purchase of treasury stock
25,000
Issuance of common stock
96,000
Purchase of land
115,000
Increase in accounts receivable during the year
33,000
Decrease in accounts payable during the year
75,000
Payment of cash dividends
35,000
Net cash flows from investing activities for the year were:
A) $234,000 of net cash used.
B) $120,000 of net cash provided.
C) $340,000 of net cash used.
D) $259,000 of net cash used.
E) $280,000 of net cash provided.
Purchase of equipment
$
(225,000
)
Purchase of land
(115,000
)
Proceeds from sale of equipment
106,000
$
(234,000
)
151) In preparing a company’s statement of cash flows for the year just ended, the following
information is available:
Loss on the sale of equipment
$
14,000
Purchase of equipment
225,000
Proceeds from the sale of equipment
106,000
Repayment of outstanding bonds
87,000
Purchase of treasury stock
25,000
Issuance of common stock
96,000
Purchase of land
115,000
Increase in accounts receivable during the year
33,000
Decrease in accounts payable during the year
75,000
Payment of cash dividends
35,000
Net cash flows from financing activities for the year were:
A) $147,000 of net cash used.
B) $26,000 of net cash used.
C) $347,000 of net cash used.
D) $51,000 of net cash used.
E) $340,000 of net cash used.
Repayment of outstanding bonds
$
(87,000
)
Purchase of treasury stock
(25,000
)
Issuance of common stock
96,000
Payment of cash dividends
(35,000
)
$
(51,000
)
152) In preparing Tywin Company’s statement of cash flows for the most recent year, the
following information is available:
Purchase of equipment
$
260,000
Proceeds from the sale of equipment
87,000
Purchase of land
91,000
Net cash flows from investing activities for the year were:
A) $438,000 of net cash used.
B) $438,000 of net cash provided.
C) $264,000 of net cash used.
D) $351,000 of net cash used.
E) $264,000 of net cash provided.
Purchase of equipment
)
Purchase of land
(91,000
)
Proceeds from sale of equipment
Net cash used by investing activities
)
153) In preparing a company’s statement of cash flows for the most recent year, Jeffers Corp.
reported the following information:
Repayment of outstanding bonds
$
107,000
Purchase of treasury stock
62,000
Issuance of common stock
46,000
Payment of cash dividends
15,000
Net cash flows from financing activities for the year were:
A) $230,000 of net cash used.
B) $230,000 of net cash provided.
C) $108,000 of net cash used.
D) $138,000 of net cash used.
E) $138,000 of net cash provided.
154) When analyzing the changes on a spreadsheet used to prepare a statement of cash flows, the
cash flows from operating activities generally are affected by:
A) Net income, current assets, and current liabilities.
B) Noncurrent assets.
C) Noncurrent liability and equity accounts.
D) Both noncurrent assets and noncurrent liabilities.
E) Equity accounts only.
155) When analyzing the changes on a spreadsheet used to prepare a statement of cash flows, the
cash flows from investing activities generally are affected by:
A) Net income, current assets, and current liabilities.
B) Noncurrent assets.
C) Noncurrent liability and equity accounts.
D) Both noncurrent assets and noncurrent liabilities.
E) Equity accounts only.
156) When analyzing the changes on a spreadsheet used to prepare a statement of cash flows, the
cash flows from financing activities generally are affected by:
A) Net income, current assets, and current liabilities.
B) Noncurrent assets.
C) Noncurrent liability and equity accounts.
D) Both noncurrent assets and noncurrent liabilities.
E) Equity accounts only.
157) Which of the following transactions or events should be reported as a source of cash from
operating activities when using the direct method?
A) Credit sales.
B) Cash collections from customers.
C) Depreciation expense.
D) Cash received from the sale of a building.
E) Cash received from the sale of treasury stock.
158) When the operating activities section of the statement of cash flows is reported using the
direct method:
A) Net income is adjusted for changes in noncurrent assets and noncurrent liabilities.
B) Operating cash receipts minus operating cash payments equals net cash provided (used by)
operating activities.
C) Footnotes to the financial statements disclose the difference between net income and the cash
provided or used by financing activities.
D) The income statement is prepared under the cash basis of accounting.
E) Noncash investing and financing activities is included in the statement of cash flows.
159) All of the following statements related to reporting cash flows from investing and financing
activities are true except:
A) Reporting of financing activities is the same under the direct method and indirect method.
B) Changes in noncurrent liability accounts and equity accounts are analyzed to determine cash
flows from financing activities
C) Changes in noncurrent asset accounts, current notes receivable, and current investments are
analyzed to determine cash flows from investing activities.
D) The direct method applies accrual accounting while the indirect method applies cash basis
accounting.
E) Reporting of investing activities is the same under the direct method and indirect method.
160) All of the following statements related to preparation of the statement of cash flows are true
except:
A) A company may report cash flows from operating activities using either the direct or indirect
method.
B) Interest expense may be reported under operating or financing based on which one results in
better cash flows.
C) Cash dividends paid to shareholders are classified as a financing activity.
D) Purchase of an intangible asset is classified as an investing activity.
E) Repaying the principal of notes payable is classified as a financing activity.
161) Ford Company reports depreciation expense of $40,000 for Year 2. Also, equipment costing
$150,000 was sold for its book value in Year 2. There were no other equipment purchases or
sales during the year. The following selected information is available for Ford Company from its
comparative balance sheet. Compute the cash received from the sale of the equipment.
At December 31
Year 2
Year 1
Equipment
$
600,000
$
750,000
Accumulated Depreciation-Equipment
428,000
500,000
A) $32,000.
B) $68,000.
C) $38,000.
D) $40,000.
E) $36,000.
162) Green Company reports depreciation expense of $35,000 for Year 2. Also, equipment
costing $140,000 was sold for a $5,000 gain in Year 2. The following selected information is
available for Green Company from its comparative balance sheet. Compute the cash received
from the sale of the equipment.
At December 31
Year 2
Year 1
Equipment
$
610,000
$
750,000
Accumulated Depreciation-Equipment
428,000
500,000
A) $23,000.
B) $35,000.
C) $38,000.
D) $40,000.
E) $67,000.