Question 1

The records of BCD provided the following information for the year ended December 31, 2011:
(1) $\begin{array} { | l | r | r | } 
\hline \text { Balance sheet: } & \mathbf { 2 0 1 1 } & \mathbf { 2 0 1 0 } \
\hline \text { Cash } & \$ 18,000 & \$ 20,000 \
\hline \text { Accounts receivable (net) } & 26,000 & 22,000 \
\hline \text { Inventory } & 30,000 & 27,000 \
\hline \text { Capital assets (net) } & 75,000 & 76,000 \
\hline \text { Payable (short term) } &41,000 & 40,000  \
\text { Bonds payable }&50,000&60,000\
\hline \text { Common stock } &30,000&30,000  \
\hline\text { Retained earnings }&18,000&?\
\hline
\end{array}$ (2) Cash dividends of $5,000 were declared in 2010 and paid in 2011, and cash dividends of $2,000 were declared and paid in 2011.
(3) Net loss in 2011, $1,000.
(4) Depreciation expense for 2011, $5,000.
Calculate the amount of net cash from operating activities during 2011.

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Question 2

Two formats of presenting the Statement of Cash Flows are allowed under ASPE and IFRS. Describe the two formats and provide your own opinion on which results in a more complete picture of a firm's cash flows.

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Question 3

Net income was $50,000 and cost of goods sold was $150,000. Inventories increased by $10,000, and trade accounts payable increased by $12,000.
Calculate the amount of cash paid to suppliers.

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Question 4

Assume cash paid to suppliers for 2011 is $420,000, that merchandise inventory increased by $20,000 during the year, and that cost of goods sold was $415,000 for 2011.
Calculate the net change in accounts payable during 2011.

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Question 5

If cash collected from customers for 2011 is $780,000 and accounts receivable increased by $20,000 during the year, calculate the amount of sales for 2011.

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Question 6

KWB made the following cash outflows during 2011:$\begin{array} { | l | l | } 
\hline \text { Cash for dividends on KWB common shares } & \$ 5,000 \
\hline \text { Cash for capital assets } & 50,000 \
\hline \text { Cash for interest } & 3,000 \
\hline \text { Cash loaned to president of KWB } & 10,000 \
\hline \text { Cash for purchase of JCK common stock } & 40,000 \
\hline
\end{array}$Calculate KWB's cash outflow for investing activities for 2011.

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Question 7

The records of WXY provided the following information for the year ended December 31, 2011:
(1) Purchased a warehouse and paid for it by issuing 1,000 common shares; market value was $35 per share.
(2) Inventory increased by $4,000.
(3) Accounts payable decreased by $6,000.
(4) Declared a cash dividend, $5,000.
(5) Depreciation expense, $2,000.
(6) Net income, $19,000.
(7) Loss on sale of machine, $3,000.
(8) On December 31, 2001, paid insurance premium on all assets, for 2002 and 2003, $800. There was no prepaid insurance on January 1, 2011.
Calculate the net cash inflow from operating activities for 2011.

Accepted Answer

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Question 8

Complete the cash column based on the following data for the Statement of Cash Flows: $\begin{array} { | l | l | l | } 
\hline & & \text { Cash Inflow } \
\hline & & \text { (Outflow) } \
\hline \text { Revenues (accrual) } & \$ 188 & \
\hline \text { Increases in accounts receivable } & 6 & \$ \
\hline \text { Expenses (accrual) } & \$ 116 & \
\hline \text { Depletion expense } & 12 & \
\hline \text { Inventory increase } & 8 & \
\hline \text { Accounts payable increase } & 14 & \$ \
\hline \text { Net cash inflow (outflow) } & & \$ \
\hline
\end{array}$

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Question 9

A corporation started operations on January 1; the reporting period ends December 31. At the end of the year, the company's records reflected the following amounts after all adjusting entries: Sales revenue, $700,000; Cost of goods sold, $400,000; Expenses (total), $200,000; Accrued wages payable, $5,000; Accounts payable, $10,000 and Accounts receivable, $25,000.
(a) Net income, accrual basis, was $____________________.
(b) Net cash inflow from operating activities was $____________.

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The answer of A corporation started operations on January 1;...

Question 10

VJW received the following cash inflows during 2013: $$\begin{array} { | l | l | } 
\hline \text { Cash from customers } & \$ 200,000 \
\hline \text { Sale of capital assets } & 50,000 \
\hline \text { Interest on loan receivable } & 10,000 \
\hline \text { Proceeds from sale of investments } & 40,000 \
\hline
\end{array}$$ Calculate cash inflow from financing activities for 2013.

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The answer of VJW received the following cash inflows during...

Question 11

The records of CDE provided the following information for the period ended December 31, 2011:$\begin{array} { | l | l | } 
\hline \text { Merchandise inventory increase } & \$ 20 \
\hline \text { Accounts payable increase } & 30 \
\hline \text { Decrease in securities available for sale } & 15 \
\hline \text { Interest payable decrease } & 7 \
\hline \text { Accounts receivable decrease } & 10 \
\hline \text { Wages payable increase } & 4 \
\hline \text { Depreciation expense } & 13 \
\hline \text { Income (as reported on the income statement) } & 47 \
\hline
\end{array}$Calculate net cash inflow from operating activities for 2011.

Accepted Answer

The answer of The records of CDE provided the following...

Question 12

RJB reported sales of $200,000 and an increase in accounts receivable of $30,000 during 2011. Under the direct method, calculate what would be RJB's cash collected from customers during 2011?

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The answer of RJB reported sales of $200,000 and an...

Question 13

A firm's dividends payable account increased $10,000 during the year. The firm also declared $35,000 of dividends.
Present the complete disclosure of these events in the direct format Statement of Cash Flows.

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The answer of A firm's dividends payable account increased $10,000...

Question 14

A firm's accumulated depreciation account increased $30,000 for the year, and total plant assets at cost increased $200,000. During the year, the firm purchased $350,000 of new equipment for cash, and sold equipment for $50,000 cash. This equipment had been depreciated $30,000 at the time of sale.
Present the complete disclosure of these events in an indirect format Statement of Cash Flows.

Accepted Answer

The answer of A firm's accumulated depreciation account increased $30,000...

Question 15

A firm's recent comparative balance sheets and income statements follow: 
Income statement for year ended December 31, 2011
$\begin{array}{|l|r|}
\hline \text { Sales revenue } & \$ 77,500 \
\hline \text { Cost of goods sold } & (53,500) \
\hline \text { Gross margin } & 24,000 \
\hline \text { Depreciation expense } & (16,500) \
\hline \text { Gain on sale of equipment } & 6,500 \
\hline \text { Net income } & \$ 14,000 \
\hline
\end{array}$
Additional information:
1. During 2011, equipment costing $20,000 was sold for cash.
2. During 2011, $10,000 of bonds payable were issued in exchange for capital assets. There was no amortization of bond discount or premium.
Required:
Prepare the 2011 Statement of Cash Flows using the indirect method.

Accepted Answer

The answer of A firm's recent comparative balance sheets and...

Question 16

The adjusted trial balances for a firm, at December 31, 2011 and 2010 are as follows:
Additional information:
No plant assets were sold in 2011. The firm allocates depreciation expense to other operating expense accounts. 
$\begin{array}{|l|r|r|}
\hline \text { Interest expense } & 4,300 & 2,600 \
\hline \text { Income tax expense } & \underline{20,400} & {61,200} \
\hline & \$ 756,700 & \$ 976,100 \
\hline
\end{array}$

Required:
Determine the firm's 2011 net cash flow from operating activities using the indirect method.

Accepted Answer

The answer of The adjusted trial balances for a firm,...

Question 17

SDB reported sales of $300,000, write-offs of uncollectible accounts of $10,000 against the allowance, and a decrease in net accounts receivable of $40,000 during 2011.
Calculate what would be SDB's cash collected from customers during 2011.

Accepted Answer

The answer of SDB reported sales of $300,000, write-offs of...

Question 18

WXY reported sales revenue of $40,000, and expenses of $35,000 during the period ended December 31, 2011. During the year, accounts receivable increased by $1,500; merchandise inventory increased by $1,000; accounts payable increased by $500; dividends payable decreased by $700; and depreciation expense of $2,500 was recorded.
Calculate the amount of net cash flow from operating activities.

Accepted Answer

The answer of WXY reported sales revenue of $40,000, and...

Quiz 5: The Statement of Cash Flows

Two formats of presenting the Statement of Cash Flows are allowed under ASPE and IFRS. Describe the two formats and provide your own opinion on which results in a more complete picture of a firm's cash flows.

Net income was $50,000 and cost of goods sold was $150,000. Inventories increased by $10,000, and trade accounts payable increased by $12,000. Calculate the amount of cash paid to suppliers.

Assume cash paid to suppliers for 2011 is $420,000, that merchandise inventory increased by $20,000 during the year, and that cost of goods sold was $415,000 for 2011. Calculate the net change in accounts payable during 2011.

If cash collected from customers for 2011 is $780,000 and accounts receivable increased by $20,000 during the year, calculate the amount of sales for 2011.

RJB reported sales of $200,000 and an increase in accounts receivable of $30,000 during 2011. Under the direct method, calculate what would be RJB's cash collected from customers during 2011?

A firm's dividends payable account increased $10,000 during the year. The firm also declared $35,000 of dividends. Present the complete disclosure of these events in the direct format Statement of Cash Flows.

SDB reported sales of $300,000, write-offs of uncollectible accounts of $10,000 against the allowance, and a decrease in net accounts receivable of $40,000 during 2011. Calculate what would be SDB's cash collected from customers during 2011.