Question 1

Team Shirts,Inc.issued $100,000 in common stock,borrowed $20,000,and paid $5,000 in dividends.The amount of net cash from (or used for)FINANCING activities is ________.
A)$80,000
B)$75,000
C)$115,000
D)$(125,000)

Accepted Answer

Issuing common stock ($100,000) and borrowing ($20,000) are inflows of cash, totaling $120,000. Paying dividends ($5,000) is an outflow. Net cash from financing activities is $120,000 - $5,000 = $115,000.

Question 2

Cash used for investing activities includes cash ________.
A)collected from customers
B)paid for land
C)paid for interest
D)paid for dividends

Accepted Answer

Cash used for investing activities includes cash paid for the acquisition or disposal of long-term assets such as land, buildings, equipment or securities. The other options (A, C, D) are related to operating or financing activities.

Question 3

Team Shirts,Inc.sold a piece of equipment for $16,000.The carrying value of the equipment was $17,000.The original cost of the equipment was $25,000.A loss on the sale of $1,000 was reported.The amount of net cash from (or used)for INVESTING activities is ________.
A)$16,000
B)$17,000
C)$(1,000)
D)$(25,000)

Accepted Answer

The net cash from (or used) for INVESTING activities represents the cash inflows and outflows related to the purchase or sale of long-term assets such as property, plant, and equipment. In this case, Team Shirts, Inc. sold a piece of equipment for $16,000, which represents a cash inflow from investing activities. The carrying value and original cost of the equipment are not relevant for determining the net cash from investing activities. The loss on the sale of $1,000 is reported on the income statement and does not affect the cash flow statement. Therefore, the correct answer is A) $16,000, which represents the cash inflow from the sale of the equipment.

Question 4

Cash involved in financing activities includes cash ________.
A)collected from customers
B)paid for land
C)paid for interest
D)paid for dividends

Accepted Answer

Cash involved in financing activities refers to transactions that involve raising cash through borrowing or issuing equity, or distributing cash to shareholders. Therefore, paid dividends to shareholders is the only option that falls under the category of financing activities.

Question 5

Team Shirts,Inc.had net cash from operating activities of $40,000.It paid $25,000 to buy a new screen-printing system,and repaid a $10,000 loan.Net cash for the period was ________.
A)$40,000
B)$75,000
C)$55,000
D)$5,000

Accepted Answer

Net cash for the period is calculated by taking the net cash from operating activities and adjusting it for any investing and financing activities. Here, $40,000 (from operating activities) - $25,000 (investment in new system) - $10,000 (loan repayment) = $5,000.

Question 6

Team Shirts,Inc.purchased $10,000 worth of treasury stock,paid $5,000 of its accounts payable,and paid $500 in dividends.The amount of net cash from (or used)for FINANCING activities is ________.
A)$(10,500)
B)$(13,500)
C)$10,500
D)$13,500

Accepted Answer

The purchase of treasury stock is a financing activity that results in a decrease in cash, so that's -$10,000. Paying accounts payable is an operating activity and has no effect on the statement of cash flows. Paying dividends is also a financing activity that results in a decrease in cash, so that's -$500. Therefore, the net cash from financing activities is -$10,500.

Question 7

A source of cash from financing activities is ________.
A)issuing of a note receivable
B)collection of an account receivable
C)cash received from the sale of treasury stock
D)collection of a note receivable

Accepted Answer

Cash received from the sale of treasury stock is a financing activity because it involves raising capital through the sale of ownership shares in the company. Issuing and collecting notes receivable, as well as collecting account receivables, are examples of cash flows from operating activities.

Question 8

Team Shirts,Inc.collected $16,000 from accounts receivable,paid $10,000 of its accounts payable and paid $1,000 in interest.The amount of net cash from (or used)for OPERATING  activities is ________.
A)$5,000
B)$6,000
C)$(5,000)
D)$(6,000)

Accepted Answer

Net cash from operating activities is calculated as cash collected from customers ($16,000) minus cash paid for operating expenses, which includes accounts payable ($10,000) and interest ($1,000). Therefore, $16,000 - $10,000 - $1,000 = $5,000.

Question 9

Team Shirts,Inc.issued 100 shares of stock for $15 per share.This is an ________ activities.
A)inflow from financing
B)outflow for financing
C)inflow from operating
D)outflow for investing

Accepted Answer

The issuance of stock is a financing activity where a company receives funds from investors in exchange for ownership (shares) in the company. In this case, Team Shirts, Inc. issued 100 shares of stock for $15 per share, which means they received $1,500 in funds from investors. This is an inflow of funds from financing activities.

Question 10

Cash paid for interest payments is characterized as an ________ activities.
A)inflow from investing
B)outflow for financing
C)inflow from operating
D)outflow for operating

Accepted Answer

Interest payments are a cost of borrowing money and therefore an outflow for operating activities.

Question 11

Team Shirts,Inc.had net cash from operating activities of $50,000.It paid $40,000 to buy a new computer system by signing a $30,000 note and paying the balance.Net cash from (or used for)investing activities for the period was ________.
A)$(40,000)
B)$(10,000)
C)$40,000
D)$10,000

Accepted Answer

The company paid $40,000 to buy a new computer system, but only $30,000 was paid in cash, while the remaining $10,000 was financed through a note. Therefore, the net cash used for investing activities is $10,000 ($40,000 total investment minus $30,000 cash payment).

Question 12

Cash collected from accounts receivables is characterized as an ________ activities.
A)inflow from investing
B)outflow for financing
C)inflow from operating
D)outflow for operating

Accepted Answer

Cash collected from accounts receivables is part of the company's operating activities, as it is a result of the company's core business operations of selling goods or services on credit.

Question 13

Team Shirts, Inc. bought a screen-printing machine for $50,000, received $15,000 for the sale of its machine, and repaid a loan of $20,000. The amount of net cash from (or used for) INVESTING activities is ________.
A)$(35,000)
B)$15,000
C)$(5,000)
D)$20,000

Accepted Answer

The answer of Team Shirts, Inc. bought a screen-printing machine...

Question 14

Team Shirts,Inc.bought a computer system for $100,000 and received $10,000 for the sale of its used computers.It also received $10,000 from the sale of its inventory.The amount of net cash from INVESTING activities is ________.
A)$(100,000)
B)$(90,000)
C)$(80,000)
D)$80,000

Accepted Answer

Net cash from INVESTING activities is calculated by subtracting the cash outflows (purchase of the computer system for $100,000) from the cash inflows (sale of used computers for $10,000 and sale of inventory for $10,000). Therefore, net cash from INVESTING activities is $20,000 - $100,000 = $(80,000). The answer is B, which represents $(90,000), an incorrect calculation.

Question 15

Team Shirts,Inc.had net cash from operating activities of $50,000.It paid $40,000 to buy a new computer system by signing a $30,000 note and paying the balance.Net cash from (or used for)financing activities for the period was ________.
A)$(30,000)
B)$10,000
C)$30,000
D)$0,however a note discloses the amount of the purchase financed by issuing a note payable

Accepted Answer

The correct answer is D because the payment for the computer system does not affect the net cash from financing activities directly. The $30,000 note signed is a financing activity, but since it is an increase in liabilities (not an outflow of cash), it does not impact the net cash from financing activities. The disclosure note is required to inform about the financing arrangement.

Question 16

A use of cash for financing activities is ________.
A)payment of an account payable
B)payment of interest
C)cash used to buy equipment
D)cash used to purchase treasury stock

Accepted Answer

Cash used to purchase treasury stock is a financing activity because it involves a transaction between the company and its owners/shareholders.

Question 17

Team Shirts,Inc.collected $20,000 from customers,recorded depreciation expense of $5,000,received interest of $100,paid $15,000 of its operating expenses,and paid $500 in dividends.The amount of net cash from (or used)for OPERATING  activities is ________.
A)$10,100
B)$100
C)$5,100
D)$9,600

Accepted Answer

To calculate the net cash from operating activities, we start with the company's net income and make adjustments for non-cash items like depreciation and changes in current assets and liabilities. In this case, we are not given the company's net income, but we can make adjustments to the cash collected from customers, interest received, and operating expenses paid to arrive at the net cash from operating activities.

Starting with the $20,000 collected from customers, we subtract the $15,000 of operating expenses paid to get $5,000. To this, we add back the $5,000 in depreciation expense and the $100 of interest received to get a total of $10,100. Since the company did not report any changes in its current assets and liabilities, this is the net cash from operating activities. Therefore, the best choice is (C) $5,100.

Question 18

Which of the following events is not a source of cash?
A)amortization of a copyright
B)receipt of loan proceeds
C)sale of treasury stock
D)collection of an account receivable

Accepted Answer

The answer of Which of the following events is not...

Question 19

The sale of a long-term asset is reported on the statement of cash flows as an increase to cash from investing activities.The increase is equal to the cost of the asset.

Accepted Answer

The answer of The sale of a long-term asset is...

Question 20

Which of the following will NOT cause cash from operating activities to differ from net income?
A)Dividends
B)Accounts receivable
C)Depreciation
D)Accounts payable

Accepted Answer

The answer of Which of the following will NOT cause...

Quiz 9: Preparing and Analyzing the Statement of Cash Flows

Team Shirts,Inc.issued $100,000 in common stock,borrowed $20,000,and paid $5,000 in dividends.The amount of net cash from (or used for) FINANCING activities is ________.

Cash used for investing activities includes cash ________.

Team Shirts,Inc.sold a piece of equipment for $16,000.The carrying value of the equipment was $17,000.The original cost of the equipment was $25,000.A loss on the sale of $1,000 was reported.The amount of net cash from (or used) for INVESTING activities is ________.

Cash involved in financing activities includes cash ________.

Team Shirts,Inc.had net cash from operating activities of $40,000.It paid $25,000 to buy a new screen-printing system,and repaid a $10,000 loan.Net cash for the period was ________.

Team Shirts,Inc.purchased $10,000 worth of treasury stock,paid $5,000 of its accounts payable,and paid $500 in dividends.The amount of net cash from (or used) for FINANCING activities is ________.

A source of cash from financing activities is ________.

Team Shirts,Inc.collected $16,000 from accounts receivable,paid $10,000 of its accounts payable and paid $1,000 in interest.The amount of net cash from (or used) for OPERATING activities is ________.

Team Shirts,Inc.issued 100 shares of stock for $15 per share.This is an ________ activities.

Cash paid for interest payments is characterized as an ________ activities.

Team Shirts,Inc.had net cash from operating activities of $50,000.It paid $40,000 to buy a new computer system by signing a $30,000 note and paying the balance.Net cash from (or used for) investing activities for the period was ________.

Cash collected from accounts receivables is characterized as an ________ activities.

Team Shirts, Inc. bought a screen-printing machine for $50,000, received $15,000 for the sale of its machine, and repaid a loan of $20,000. The amount of net cash from (or used for) INVESTING activities is ________.

Team Shirts,Inc.bought a computer system for $100,000 and received $10,000 for the sale of its used computers.It also received $10,000 from the sale of its inventory.The amount of net cash from INVESTING activities is ________.

Team Shirts,Inc.had net cash from operating activities of $50,000.It paid $40,000 to buy a new computer system by signing a $30,000 note and paying the balance.Net cash from (or used for) financing activities for the period was ________.

A use of cash for financing activities is ________.

Team Shirts,Inc.collected $20,000 from customers,recorded depreciation expense of $5,000,received interest of $100,paid $15,000 of its operating expenses,and paid $500 in dividends.The amount of net cash from (or used) for OPERATING activities is ________.

Which of the following events is not a source of cash?

The sale of a long-term asset is reported on the statement of cash flows as an increase to cash from investing activities.The increase is equal to the cost of the asset.

Which of the following will NOT cause cash from operating activities to differ from net income?