Question 1

The issuance of debt would be classified as a(n)____________________ activity in the statement of cash flows.

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Question 2

Discuss operating,investing,and financing cash flows in relation to the various stages of the product life cycle.

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Question 3

The receipt of cash when employees exercise stock options is a(n)____________________ activity.

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Question 4

Clarion Industries manufactures computer equipment and provides financing for purchases by its customers.Clarion reported sales and interest revenues of $79,500 million for 2010.The
balance sheet showed current and noncurrent receivables of $ 30,750 million at the beginning
of 2010 and $ 26,900 million at the end of 2010.Compute the amount of cash collected
from customers during 2010.

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Question 5

While preparing a statement of cash flows,you encountered the following transaction:
February 1,2011: Galvinize Corporation acquired a small office building in exchange for 5,000 shares of its own common stock;par value $10 per share;market value $15 per share.
A.Should this transaction be shown on the statement of cash flows?
B.Why or why not?

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Question 6

Indicate if any of the events will be reported as a significant noncash transaction.

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Question 7

Olive Corporation manufactures food processing equipment.Use Olive Corporation's two most recent balance sheets and most recent income statement to prepare a statement of cash flows for 2010.The company paid dividends of $6,250 during 2010.

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Question 8

For the following types of companies,discuss whether you think their cash flows from operations,investing,and financing will be positive (the activity provides cash)or negative (the activity uses cash).Provide support for your answer.

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Question 9

In 2010,Lamar Industries reported the following: Sales $700,000;Accounts receivable beginning of 2010 $450,000;Accounts receivable end of 2010 $369,200;Depreciation expense $55,400;Rent Expense $30,000.What is the net cash provided (used)by operating activities

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Question 10

J.Jill is a women's clothing retailer.The company started as a mail order company and has expanded into mall department stores.The company now receives approximately half of its revenues from mail order and half from retail outlets.Over the time period 2010 to 2012,sales increased approximately 25%.
Discuss the relationship between net income,working capital from operations,and cash flow from operations,and between cash flows from operating,investing,and financing activities over the three-year period.

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Question 11

Discuss the correlations that have been found between net income,net income plus or minus Type 1 adjustments (i.e. ,adjustments to net income for revenues,expenses,gains,and losses that are recognized in income and are associated with changes in noncurrent assets,noncurrent liabilities,and shareholders' equity,but do not affect cash by the same amounts for the period),and cash flow from operations.

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Question 12

One factor that may cause cash flow from operations to differ from net income is the length of the ______________________________.

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Question 13

Bankers Company reported net income of $40,000,which included depreciation expense and depletion expense of $21,000 and $18,000,respectively.The following changes also occurred during 2010:
  Required:
Calculate cash flows from operating activities.

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Question 14

Selected financial statement information for Filmco appears below:  Calculate the amount of cash collected from customers and the amount of cash spent on inventory for 2010 by Filmco.

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Question 15

Jarrett Company,home improvement retailer,reported cost of goods sold of $33,729 million for the fiscal year ended January 30,2010.It reported merchandise inventories of $9,611 million at the beginning of fiscal 2010 and $10,209 million at the end of fiscal 2010.It reported
accounts payable to suppliers of $5,713 million at the beginning of fiscal 2010 and $6,109
million at the end of fiscal 2010.Compute the amount of cash paid to merchandise suppliers
during fiscal 2010.

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Question 16

What is working capital from operations? Discuss what types of firms will have similar net income and working capital from operations? For which types of firms will net income and working capital from operations be significantly different?

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Question 17

The calculation of cash flow from operations under the indirect method involves two types of adjustments.Discuss each type of adjustment and provide an example of each type of adjustment.

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Question 18

Cash flow from operations should include none of the cash flows associated with marketable securities if such transactions are viewed as ___________________________________.

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Question 19

Cash collected from customers would appear in the operating activities section of a statement of cash flows prepared using the ____________________ method

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Question 20

Krenzer,Inc. ,a financial company,reported income tax expense of $2,648 million for 2010,comprising $2,346 million of current taxes and $302 million of deferred taxes.The balance sheet showed income taxes payable of $222 million at the beginning of 2010 and $427 million at the end of 2010.Compute the amount of income taxes paid in cash during 2010.

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Quiz 3: Income Flows Versus Cash Flows: Understanding the Statement of Cash Flows