Question 1

Hugh Morris Comics sold for $110,000 cash a 3D printer that cost $334,000 with accumulated depreciation of $221,000. This transaction would be reported as:

Accepted Answer

Selling (as well as buying) productive assets is considered an investing activity.

Question 2

Selected information from Isadore Bell Corporation's accounting records and financial statements for 2018 is as follows ($ in millions):  In its statement of cash flows, Isadore Bell should report net cash outflows from investing activities of:

Accepted Answer

$135 million (proceeds from sale of buildings) - $54 (cash paid to acquire land) - $120 million (cash paid to acquire equipment).

Question 3

Selected information from Jacklyn Hyde Corporation's accounting records and financial statements for 2018 is as follows ($ in millions):  In its statement of cash flows, Jacklyn Hyde should report net cash inflows from financing activities of:

Accepted Answer

$210 (proceeds from issuance of preferred stock) + $270 (proceeds from issuance of bonds) - $90 (cash paid to retire notes) - $150 (reacquired stock) - $75 (cash dividends paid on stock).

Question 4

Listed below are the reporting classifications for a statement of cash flows using the direct method for reporting operating cash flows. Match the reporting classifications with the transactions described below.
-Financing cash inflow

Accepted Answer

The issuance of a long-term note payable for cash is classified as a financing cash inflow because it involves obtaining funds from external sources (e.g., lenders) that will be used for long-term financing purposes.

Question 5

Listed below are the reporting classifications for a statement of cash flows using the direct method for reporting operating cash flows. Match the reporting classifications with the transactions described below.
-Operating cash inflow

Accepted Answer

Cash collected on accounts receivable is an operating activity because it relates to the primary revenue-producing activities of the entity.

Question 6

Listed below are the reporting classifications for a statement of cash flows using the direct method for reporting operating cash flows. Match the reporting classifications with the transactions described below.
-Investing cash inflow

Accepted Answer

Cash collection of a nontrade note receivable is classified as an investing cash inflow because it involves the collection of principal from a loan or note that is not related to the entity's primary operations.

Question 7

Listed below are the reporting classifications for a statement of cash flows using the direct method for reporting operating cash flows. Match the reporting classifications with the transactions described below.
-Investing cash outflow

Accepted Answer

The correct match for "Investing cash outflow" is the cash purchase of securities issued by another corporation (D). This is because investing activities typically include transactions involving the acquisition and disposal of long-term assets and other investments not included in cash equivalents.

Question 8

Listed below are reporting classifications for a statement of cash flows using the indirect method for reporting operating cash flows. Match the reporting classifications with the transactions described below.
-Operating activity, negative adjustment to net income

Accepted Answer

A decrease in accounts payable indicates that cash was used to pay off liabilities, which is a cash outflow and thus a negative adjustment to net income in the operating activities section of the cash flow statement.

Question 9

Listed below are reporting classifications for a statement of cash flows using the indirect method for reporting operating cash flows. Match the reporting classifications with the transactions described below.
-Operating activity, no adjustment to net income

Accepted Answer

Interest payments are considered operating activities in the statement of cash flows using the indirect method, but they do not require an adjustment to net income.

Question 10

Listed below are reporting classifications for a statement of cash flows using the indirect method for reporting operating cash flows. Match the reporting classifications with the transactions described below.
-Operating activity, positive adjustment to net income

Accepted Answer

Depreciation expense is a non-cash expense that is added back to net income to arrive at operating cash flows.

Question 11

When using the indirect method to determine cash flows from operating activities, an increase in prepaid expenses should be reported as:

Accepted Answer

Increases in current operating assets are considered cash inflows and deducted from net income under the indirect method.

Question 12

When using the indirect method to determine cash flows from operating activities, an increase in held-to-maturity securities that does not arise from the interest component of the debt should be reported as:

Accepted Answer

Purchasing investment securities is reported as an investing activity in the statement of cash flows.The interest adjustment which reduces a discount and increases the amortized cost basis of the securities would be reflected in the operating activities section. The other increase in the account would be from investing in additional securities.

Question 13

Listed below are the reporting classifications for a statement of cash flows using the direct method for reporting operating cash flows. Match the reporting classifications with the transactions described below.
-Noncash financing and investing activity

Accepted Answer

Payment of a property dividend is a noncash financing activity because it involves the distribution of noncash assets to shareholders, which does not affect the cash flow directly.

Question 14

Sales revenue for Hy Marx Tutoring was $220,000. The following data are from the accounting records of Marx:  The cash received from customers was:

Accepted Answer

11ea937b_3583_ec1f_a419_0d5f02135727_TB2599_00

Question 15

If sales revenue is $80 million and accounts receivable increased by $12 million, the amount of cash received from customers:

Accepted Answer

The $80 million in sales is decreased by the $12 million increase in accounts receivable.

Question 16

A statement of cash flows and its related disclosure note typically do not report:

Accepted Answer

Stock dividends do not affect assets or liabilities and are not considered investing or financing activities.

Question 17

Listed below are reporting classifications for a statement of cash flows using the indirect method for reporting operating cash flows. Match the reporting classifications with the transactions described below.
-Investing cash outflow

Accepted Answer

C) Acquisition of a building for cash is classified as an investing cash outflow because it involves spending cash to acquire a long-term asset, which is a typical investing activity.

Question 18

Listed below are the reporting classifications for a statement of cash flows using the direct method for reporting operating cash flows. Indicate the reporting classification that would apply to each of the five transactions described below by placing the number of the reporting classification in the space provided by each transaction. $$\begin{array} { | l | l | l | } 
\hline \text { CLASSIFICATION } & \text { TRANSACTIONS } & \text { NUMIBER } \
\hline
\text { 1. Not reported for the } & & \
\text { statement of cash flows } & \text { Payment of cash dividends. } &- \
\hline \text { 2.Noncash financing and } & \
\text { investing activity } & \text { Purchase of treasury stock. } &- \
\hline & \text { Investment of excess cash in an interest-bearing } &- \
\text { 3. Financing cash outflow } & \text { security classified as a cash equivalent. } \
\hline & \text { Appropriation of retained earnings for expansion } & \
\text { 4. Financing cash inflow } &\text { of the } \mathrm{R} \& \mathrm{D} \text { program. }&-\
\hline \text { 5.Not reported for the } & \text { Acquisition of equipment under a finance lease } & -\
\text { statement of cash flows } & \text { agreement. } & -\
\hline
\end{array}$$

Accepted Answer

The answer of Listed below are the reporting classifications for...

Question 19

Listed below are reporting classifications for a statement of cash flows using the indirect method for reporting operating cash flows. Match the reporting classifications with the transactions described below.
-Financing cash inflow

Accepted Answer

Issuance of bonds at a discount for cash is a financing activity because it involves raising capital through borrowing, which directly impacts the company's cash flow from financing activities.

Question 20

If bond interest expense is $300,000, bond interest payable decreased by $4,000 and bond premium decreased by $1,000, cash paid for bond interest is:

Accepted Answer

$$\begin{array} { | l | r | r | } 
\hline \text { Preniurn on bond } & 1 & \
\hline \text { Interest expense } & 300 & \
\hline \text { Bond interest payable } & 4 & \
\hline \text { Cash } & & 305 \
\hline
\end{array}$$

Quiz 21: The Statement of Cash Flows Revisited

Hugh Morris Comics sold for $110,000 cash a 3D printer that cost $334,000 with accumulated depreciation of $221,000. This transaction would be reported as:

Selected information from Isadore Bell Corporation's accounting records and financial statements for 2018 is as follows ($ in millions) : In its statement of cash flows, Isadore Bell should report net cash outflows from investing activities of:

Selected information from Jacklyn Hyde Corporation's accounting records and financial statements for 2018 is as follows ($ in millions) : In its statement of cash flows, Jacklyn Hyde should report net cash inflows from financing activities of:

Listed below are the reporting classifications for a statement of cash flows using the direct method for reporting operating cash flows. Match the reporting classifications with the transactions described below. -Financing cash inflow

Listed below are the reporting classifications for a statement of cash flows using the direct method for reporting operating cash flows. Match the reporting classifications with the transactions described below. -Operating cash inflow

Listed below are the reporting classifications for a statement of cash flows using the direct method for reporting operating cash flows. Match the reporting classifications with the transactions described below. -Investing cash inflow

Listed below are the reporting classifications for a statement of cash flows using the direct method for reporting operating cash flows. Match the reporting classifications with the transactions described below. -Investing cash outflow

Listed below are reporting classifications for a statement of cash flows using the indirect method for reporting operating cash flows. Match the reporting classifications with the transactions described below. -Operating activity, negative adjustment to net income

Listed below are reporting classifications for a statement of cash flows using the indirect method for reporting operating cash flows. Match the reporting classifications with the transactions described below. -Operating activity, no adjustment to net income

Listed below are reporting classifications for a statement of cash flows using the indirect method for reporting operating cash flows. Match the reporting classifications with the transactions described below. -Operating activity, positive adjustment to net income

When using the indirect method to determine cash flows from operating activities, an increase in prepaid expenses should be reported as:

When using the indirect method to determine cash flows from operating activities, an increase in held-to-maturity securities that does not arise from the interest component of the debt should be reported as:

Listed below are the reporting classifications for a statement of cash flows using the direct method for reporting operating cash flows. Match the reporting classifications with the transactions described below. -Noncash financing and investing activity

Sales revenue for Hy Marx Tutoring was $220,000. The following data are from the accounting records of Marx: The cash received from customers was:

If sales revenue is $80 million and accounts receivable increased by $12 million, the amount of cash received from customers:

A statement of cash flows and its related disclosure note typically do not report:

Listed below are reporting classifications for a statement of cash flows using the indirect method for reporting operating cash flows. Match the reporting classifications with the transactions described below. -Investing cash outflow

Listed below are reporting classifications for a statement of cash flows using the indirect method for reporting operating cash flows. Match the reporting classifications with the transactions described below. -Financing cash inflow

If bond interest expense is $300,000, bond interest payable decreased by $4,000 and bond premium decreased by $1,000, cash paid for bond interest is: