Chapter 13 – Statement of Cash Flows
44. KJ Company, a manufacturer, has provided the following information pertaining to its
recent year of operation:
• Cash flow from operating activities, $136,000;
• Accounts payable increased $11,000;
• Prepaid assets decreased $8,000;
• Depreciation expense was $12,000;
• Accounts receivable increased $23,000;
• Loss on sale of a depreciable asset was $6,000;
• Wages payable decreased $9,000;
• Unearned revenue decreased $19,000;
• Patent amortization expense was $3,000.
How much was KJ’s net income?
Chapter 13 – Statement of Cash Flows
45. Which of the following would not be a cash flow from investing activities?
46. Which of the following would not be a cash flow from financing activities?
Chapter 13 – Statement of Cash Flows
47. Which of the following would not be considered a cash equivalent?
48. Which of the following statements about the statement of cash flows is correct?
Chapter 13 – Statement of Cash Flows
49. Which of the following items about the statement of cash flows is correct?
50. Allen Company’s 2010 income statement reported total revenues, $850,000 and total
expenses (including $40,000 depreciation) of $720,000. The 2009 balance sheet reported the
following: accounts receivable—beginning balance, $50,000 and ending balance, $40,000;
accounts payable—beginning balance, $22,000 and ending balance, $28,000. Therefore,
based only on this information, how much was the 2010 net cash inflow from operating
activities?
Chapter 13 – Statement of Cash Flows
51. Which statement regarding the indirect method is false?
52. Which of the following statements about the quality of income ratio is correct?
Chapter 13 – Statement of Cash Flows
53. Which of the following statements about the quality of income ratio is incorrect?
54. During 2010, Boogle reported net income of $785 million and net cash inflow from
operations of $1,196 million. During 2009, their net income was $563 million and net cash
inflow from operations was $1,237 million. Which of the following is incorrect about their
quality of income ratios?
Chapter 13 – Statement of Cash Flows
55. Which of the following is not reported as a cash flow from investing activities?
56. Which of the following is reported as a cash flow from investing activities?
Chapter 13 – Statement of Cash Flows
57. KAJ Incorporated purchased a machine costing $100,000 by paying $20,000 and signing
an $80,000 note payable. How would this transaction be reported within the cash flow from
investing activities section of the cash flow statement?
58. KAJ Incorporated purchased a machine costing $100,000 by paying $20,000 cash and
signing an $80,000 note payable. How would this transaction be reported within the cash flow
from financing activities section of the cash flow statement?
Chapter 13 – Statement of Cash Flows
59. Flow Company has provided the following information for the year ended December 31,
2010:
• Cash paid for interest, $20,000;
• Cash paid for dividends, $6,000;
• Cash dividends received, $4,000;
• Cash proceeds from bank loan, $29,000;
• Cash purchase of treasury stock, $11,000;
• Cash paid for equipment purchase, $27,000;
• Cash received from common stock sale, $37,000;
• Cash received from sale of land with a $32,000 book value, $25,000;
• Acquisition of land costing $51,000 in exchange for preferred stock issuance.
• Paid a $100,000 note payable by exchanging used machinery with a $77,000 book value.
How much was Flow’s net cash flow from investing activities?
Chapter 13 – Statement of Cash Flows
60. Flow Company has provided the following information for the year ended December 31,
2010:
• Cash paid for interest, $20,000;
• Cash paid for dividends, $6,000;
• Cash dividends received, $4,000;
• Cash proceeds from bank loan, $29,000;
• Cash purchase of treasury stock, $11,000;
• Cash paid for equipment purchase, $27,000;
• Cash received from common stock sale, $37,000;
• Cash received from sale of land with a $32,000 book value, $25,000;
• Acquisition of land costing $51,000 in exchange for preferred stock issuance.
• Paid a $100,000 note payable by exchanging used machinery with a $77,000 book value.
How much was Flow’s net cash flow from financing activities?
Chapter 13 – Statement of Cash Flows
61. Which of the following statements about the capital acquisitions ratio is correct?
62. Which of the following statements about the capital acquisitions ratio is incorrect?
Chapter 13 – Statement of Cash Flows
63. During 2010, Eva’s Enterprises cash paid for property, plant and equipment was $755
million and cash flow from operations was $5,968 million. The average property, plant and
equipment from the comparative balance sheets were $6,094 million. Compute Eva’s
Enterprises capital acquisitions ratio for 2010.
64. During 2010, Edna Enterprises had a capital acquisitions ratio of 7.9. During 2010, Carlos’
Corporation had a capital acquisitions ratio of 3.6. The amount of cash flow from operations
was $5,968,000 for Edna’s and $5,054,000 for Carlos. Which of the following statements is
incorrect?
Chapter 13 – Statement of Cash Flows
65. A company’s 2010 income statement reported total sales revenue of $1,200,000; accounts
receivable increased by $25,000 and the unearned revenue account decreased $15,000 during
2010. How much cash was collected from customers during 2010?
66. Bold Company’s 2010 income statement reported total sales revenue of $250,000. During
2010, accounts receivable decreased by $20,000 and accounts payable increased $10,000.
How much cash was collected from customers during 2010?
Chapter 13 – Statement of Cash Flows
67. The financial statements for World Company show the following:
Cost of goods sold, $725,000.
How much cash was paid to suppliers?
Chapter 13 – Statement of Cash Flows
68. Madison Company had sales of $154,000. Additional information from the balance sheet
is below:
How much cash was collected from customers?
69. Amanda Company reported income tax expense of $250,000. Beginning income taxes
payable was $30,000, while ending income taxes payable was $25,000, and accounts payable
decreased $10,000. How much cash was paid for taxes?
Chapter 13 – Statement of Cash Flows
70. Aaron Inc. reported operating expenses during 2011 of $765,000 (including $80,000 of
depreciation expense). Prepaid expenses increased $25,000 while accrued liabilities increased
$43,000. How much cash was paid for operating expenses during 2011?
71. Canadian Beer reported they sold equipment for $222 million cash and purchased $1,515
million of new equipment using cash. The equipment sold had a net book value of $150
million. Cash flow from investing activities would show
Chapter 13 – Statement of Cash Flows
72. Milliken Company paid $2.2 million to purchase stock in another company, $1.0 million
to repurchase treasury shares, $.5 million to buy short-term investments, sold used equipment
for $.8 million when its book value was $.6 million, and purchased new equipment for $3.4
million. How much will be reported as net investing cash flow?
73. Roberts Company sold equipment for $250,000, purchased a building for $6,500,000, sold
short-term investments for $280,000, repaid principal on a note payable for $2,300,000 plus
$230,000 of interest, and paid cash dividends of $20,000. How much was the net cash flow
from investing activities?
Chapter 13 – Statement of Cash Flows
74. Roberts Company sold equipment for $250,000, purchased a building for $6,500,000, sold
short-term investments for $280,000, repaid principal on a note payable for $2,300,000 plus
$230,000 of interest, and paid cash dividends of $20,000. How much was the net cash flow
from financing activities?
75. During 2010, Tommy’s Toys reported the following: long-term debt repayments, $503
million; interest paid, $143 million; proceeds from exercise of stock options, $27 million, and
issue of common stock in exchange for land costing $10 million. How much is the 2010 net
cash flow from financing activities?
Chapter 13 – Statement of Cash Flows
76. Burich Co. reported short-term borrowings of $2.5 million, long-term borrowings of $6.8
million, repayments of long-term borrowings of $3.5 million, interest payments of $780,000,
repurchase of treasury shares of $.5 million and cash dividends declared of $1.1 million. What
is the cash flow from financing activities?
77. Which of the following is correct?
Chapter 13 – Statement of Cash Flows
78. Which of the following would be a financing activities cash flow?
79. Which of the following would not be a financing activities cash flow?