Question 1

Royer Corporation engaged in this transaction: Purchased land for cash.
Indicate which section, if any, the above transaction would appear in, or relate to, on a statement of cash flows.

Accepted Answer

The transaction of purchasing land for cash would appear in the investing activities section of the statement of cash flows, as it relates to the acquisition or sale of long-term assets.

Question 2

Royer Corporation engaged in this transaction: Repaid ten-year note payable.
Indicate which section, if any, the above transaction would appear in, or relate to, on a statement of cash flows.

Accepted Answer

Repaying a note payable is a financing activity and would be included in the financing activities section of the statement of cash flows.

Question 3

Royer Corporation engaged in this transaction: Issued long-term note for plant assets.
Indicate which section, if any, the above transaction would appear in, or relate to, on a statement of cash flows.

Accepted Answer

The answer of Royer Corporation engaged in this transaction: Issued...

Question 4

Royer Corporation engaged in this transaction: Issued common stock for cash.
Indicate which section, if any, the above transaction would appear in, or relate to, on a statement of cash flows.

Accepted Answer

Issuing common stock for cash is a financing activity, and would therefore appear in the financing activities section of the statement of cash flows.

Question 5

Royer Corporation engaged in this transaction: Acquired long-term investment by issuance of long-term debt.
Indicate which section, if any, the above transaction would appear in, or relate to, on a statement of cash flows.

Accepted Answer

This transaction involves acquiring an investment by issuing debt, which does not involve cash. Therefore, it is reported in the schedule of noncash investing and financing transactions.

Question 6

Royer Corporation engaged in this transaction: Received dividends on securities held.
Indicate which section, if any, the above transaction would appear in, or relate to, on a statement of cash flows.

Accepted Answer

Dividends on securities held are considered cash inflows from operating activities and would therefore appear in the operating activities section of the statement of cash flows.

Question 7

Royer Corporation engaged in this transaction: Transferred cash to money market account.
Indicate which section, if any, the above transaction would appear in, or relate to, on a statement of cash flows.

Accepted Answer

Transferring cash to a money market account does not represent a cash flow because it is simply a reallocation of cash within the company's accounts, not an inflow or outflow of cash.

Question 8

Royer Corporation engaged in this transaction: Retired long-term debt with cash.
Indicate which section, if any, the above transaction would appear in, or relate to, on a statement of cash flows.

Accepted Answer

The retired long-term debt with cash would represent a financing activity and would therefore appear in the financing activities section of the statement of cash flows.

Question 9

Royer Corporation engaged in this transaction: Converted loans payable to stock.
Indicate which section, if any, the above transaction would appear in, or relate to, on a statement of cash flows.

Accepted Answer

The transaction does not involve cash inflows or outflows, so it would not appear in the operating activities or investing activities sections. However, it does involve a conversion of debt to equity, which is a noncash financing transaction that would be included in the schedule of noncash investing and financing transactions in the cash flow statement.

Question 10

Royer Corporation engaged in this transaction: Abandoned fully depreciated equipment.
Indicate which section, if any, the above transaction would appear in, or relate to, on a statement of cash flows.

Accepted Answer

The answer of Royer Corporation engaged in this transaction: Abandoned...

Question 11

Royer Corporation engaged in this transaction: Purchased 30-day U.S. Treasury bill.
Indicate which section, if any, the above transaction would appear in, or relate to, on a statement of cash flows.

Accepted Answer

Purchasing a 30-day U.S. Treasury bill is considered a cash equivalent, not a cash flow, as it is a short-term, highly liquid investment.

Question 12

Royer Corporation engaged in this transaction: Paid interest on note.
Indicate which section, if any, the above transaction would appear in, or relate to, on a statement of cash flows.

Accepted Answer

The answer of Royer Corporation engaged in this transaction: Paid...

Question 13

Royer Corporation engaged in this transaction: Purchased one-year insurance policy for cash.
Indicate which section, if any, the above transaction would appear in, or relate to, on a statement of cash flows.

Accepted Answer

The purchase of an insurance policy would be considered an operating activity since it is related to the ongoing operations of the business. Specifically, it would be classified as a cash outflow from operating activities on the statement of cash flows.

Question 14

Royer Corporation engaged in this transaction: Purchased land and building with a mortgage.
Indicate which section, if any, the above transaction would appear in, or relate to, on a statement of cash flows.

Accepted Answer

The purchase of land and building with a mortgage is a noncash transaction, as it involves acquiring assets without an immediate cash outflow. Such transactions are reported in the schedule of noncash investing and financing transactions.

Question 15

Royer Corporation engaged in this transaction: Repaid 190-day note payable.
Indicate which section, if any, the above transaction would appear in, or relate to, on a statement of cash flows.

Accepted Answer

The repayment of a note payable is a financing activity and would appear in the financing activities section of the statement of cash flows.

Question 16

Royer Corporation engaged in this transaction: Issued stock for equipment.
Indicate which section, if any, the above transaction would appear in, or relate to, on a statement of cash flows.

Accepted Answer

The answer of Royer Corporation engaged in this transaction: Issued...

Question 17

Royer Corporation engaged in this transaction: Received interest on an investment in a long-term note.
Indicate which section, if any, the above transaction would appear in, or relate to, on a statement of cash flows.

Accepted Answer

Interest received on an investment is considered an operating activity on the statement of cash flows, as it relates to the company's primary revenue-generating activities.

Question 18

Royer Corporation engaged in this transaction: Paid income taxes.
Indicate which section, if any, the above transaction would appear in, or relate to, on a statement of cash flows.

Accepted Answer

Payment of income taxes is considered an operating activity and would be reported in the operating activities section of the statement of cash flows.

Question 19

Royer Corporation engaged in this transaction: Sold long-term investment.
Indicate which section, if any, the above transaction would appear in, or relate to, on a statement of cash flows.

Accepted Answer

The sale of a long-term investment is a cash transaction related to investing activities and should appear in the investing activities section of the statement of cash flows.

Question 20

Royer Corporation engaged in this transaction: Paid employee wages.
Indicate which section, if any, the above transaction would appear in, or relate to, on a statement of cash flows.

Accepted Answer

The payment of employee wages represents a cash outflow from the company's operating activities and would appear in the operating activities section of the statement of cash flows.

Quiz 15: The Statement of Cash Flows

Royer Corporation engaged in this transaction: Purchased land for cash. Indicate which section, if any, the above transaction would appear in, or relate to, on a statement of cash flows.

Royer Corporation engaged in this transaction: Repaid ten-year note payable. Indicate which section, if any, the above transaction would appear in, or relate to, on a statement of cash flows.

Royer Corporation engaged in this transaction: Issued long-term note for plant assets. Indicate which section, if any, the above transaction would appear in, or relate to, on a statement of cash flows.

Royer Corporation engaged in this transaction: Issued common stock for cash. Indicate which section, if any, the above transaction would appear in, or relate to, on a statement of cash flows.

Royer Corporation engaged in this transaction: Acquired long-term investment by issuance of long-term debt. Indicate which section, if any, the above transaction would appear in, or relate to, on a statement of cash flows.

Royer Corporation engaged in this transaction: Received dividends on securities held. Indicate which section, if any, the above transaction would appear in, or relate to, on a statement of cash flows.

Royer Corporation engaged in this transaction: Transferred cash to money market account. Indicate which section, if any, the above transaction would appear in, or relate to, on a statement of cash flows.

Royer Corporation engaged in this transaction: Retired long-term debt with cash. Indicate which section, if any, the above transaction would appear in, or relate to, on a statement of cash flows.

Royer Corporation engaged in this transaction: Converted loans payable to stock. Indicate which section, if any, the above transaction would appear in, or relate to, on a statement of cash flows.

Royer Corporation engaged in this transaction: Abandoned fully depreciated equipment. Indicate which section, if any, the above transaction would appear in, or relate to, on a statement of cash flows.

Royer Corporation engaged in this transaction: Purchased 30-day U.S. Treasury bill. Indicate which section, if any, the above transaction would appear in, or relate to, on a statement of cash flows.

Royer Corporation engaged in this transaction: Paid interest on note. Indicate which section, if any, the above transaction would appear in, or relate to, on a statement of cash flows.

Royer Corporation engaged in this transaction: Purchased one-year insurance policy for cash. Indicate which section, if any, the above transaction would appear in, or relate to, on a statement of cash flows.

Royer Corporation engaged in this transaction: Purchased land and building with a mortgage. Indicate which section, if any, the above transaction would appear in, or relate to, on a statement of cash flows.

Royer Corporation engaged in this transaction: Repaid 190-day note payable. Indicate which section, if any, the above transaction would appear in, or relate to, on a statement of cash flows.

Royer Corporation engaged in this transaction: Issued stock for equipment. Indicate which section, if any, the above transaction would appear in, or relate to, on a statement of cash flows.

Royer Corporation engaged in this transaction: Received interest on an investment in a long-term note. Indicate which section, if any, the above transaction would appear in, or relate to, on a statement of cash flows.

Royer Corporation engaged in this transaction: Paid income taxes. Indicate which section, if any, the above transaction would appear in, or relate to, on a statement of cash flows.

Royer Corporation engaged in this transaction: Sold long-term investment. Indicate which section, if any, the above transaction would appear in, or relate to, on a statement of cash flows.

Royer Corporation engaged in this transaction: Paid employee wages. Indicate which section, if any, the above transaction would appear in, or relate to, on a statement of cash flows.