1. The statement of cash flows reports .

1. The statement of cash flows reports .

1. The statement of cash flows reports .all of the income, expenses, profit or losses a company has earned or incurred during an accounting periodthe change in total assets during an accounting periodall of the cash a company has received and all of the cash a company has disbursed during an accounting periodall of the sources and uses of shareholders equity2. The statement of cash flows reports the .sources and uses of cash profitability of a companychanges in shareholders equity financial position of a company3. Cash budgets allow companies to plan for any cash shortage by .borrowing moneyaltering the timing of receipts or disbursementssecuring a line of credit from a local bankall of these4. Cash from operating activities includes .all cash receipts and all cash disbursements for long-term business assetsdetailed estimates of the sources of cash and uses of cashall cash receipts and cash disbursements for routine sales and payments made in the course of doing businessall cash receipts and all cash disbursements for loans, contributions from owners, and distributions to owners5. The following information is from Cashew, Inc.s December 31, 2011 annual report:Income statement Balance sheet12/31/11 12/31/10Sales Revenue $90,000 Accounts receivable $8,000 $10,000Salary expense $30,000 Salary payable $2,000 $3,000Cash collected from customers on Cashew, Inc.s statement of cash flows equals .$92,000 $88,000 $90,000 $98,0006. The following information is from Sharp, Inc.s December 31, 2011 annual report:Income statement Balance sheet12/31/11 12/31/10Sales Revenue $90,000 Accounts receivable $8,000 $10,000Salary expense $30,000 Salary payable $2,000 $3,000Cash paid for salaries on Sharp, Inc.s statement of cash flows equals .$31,000 $29,000 $30,000 $33,0007. The following information is from X, Inc.s December 31, 2011 annual report:Income statement Balance sheet12/31/11 12/31/10Sales Revenue $90,000 Unearned revenue $8,000 $10,000Insurance expense $30,000 Prepaid insurance $2,000 $3,000Note: X, Inc. does not sell to its customers on account; it collects cash from its customers in advance.Cash collected from customers on X, Inc.s statement of cash flows equals .$98,000 $92,000 $88,000 solution: 90000-(10000-8000) = 88000$90,0008. The following information is from Avatar, Inc.s December 31, 2011 annual report:Income statement Balance sheet12/31/11 12/31/10Sales Revenue $80,000 Unearned revenue $5,000 $9,000Insurance expense $20,000 Prepaid insurance $3,000 $2,000Note: Avatar always collects cash from its customers in advance.Cash paid for insurance on Avatar, Inc.s statement of cash flows equals .$23,000 $19,000 $22,000 $21,000 9. The following information is from ABC, Inc.s December 31, 2011 annual report:Income statement Balance sheet12/31/11 12/31/10Sales Revenue $800,000 Unearned revenue $8,000 $10,000Insurance expense $30,000 Prepaid insurance $1,000 $3,000Note: ABC, Inc. does not sell to its customers on account; it collects cash from its customers in advance.Cash paid for interest on ABC, Inc.s statement of cash flows equals .$28,000 $32,000 $33,000 $30,00010. On January 1, 2011, Company Z had accounts receivable of $5,000. During the year, Company Z sold $100,000 of merchandise to credit customers. At December 31, 2011, Company Z had accounts receivable of $4,000. How much cash did the company collect from credit customers during the year?$105,000 $101,000 $95,000 $99,00011. The direct method of preparing the operating activities section of the statement of cash flows .adjusts accrual-basis incomelists each important item of cash outflows from investing activitiesadjusts cash-basis incomelists each important item of cash inflows from operating activities12. The direct method for the preparation of the statement of cash flows .starts by estimating the sources of cash and the uses of cash.starts with net income and makes adjustments for all the items that are not cash.starts by converting every number on the income statement to its cash amount.all of these13. The indirect method of preparing the statement of cash flows .starts by converting net income into an accrual-based numberis preferred by business over the direct methodreports a greater amount of cash than the direct methodprovides greater clarity for users than the direct method14. Depreciation expense, using the indirect method of preparing the statement of cash flows, is .added to investing activities subtracted from investing activitiesadded to net income subtracted from net income15. The indirect method for the preparation of the statement of cash flows .is not in conformity with GAAP is not in conformity with IFRSis the preferred method used by businesses is recommended by the FASB16. A use of cash for operating activities is .payment of dividends cash used to purchase treasury stockpayment of an account payable cash used to buy equipment17. A use of cash for investing activities is .payment of an account payable cash used to purchase treasury stockcash used to buy equipment payment of dividends18. 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 .$40,000 $(10,000) $10,000 $(40,000)19. Negative cash flow from financing activities on the statement of cash flows means that a company has .paid a large cash dividend to shareholdersbought additional property, plant and equipmentsold additional shares of common stockpaid more for operating expenses than it collected from customers20. Positive cash flow from operating activities on the statement of cash flows means that a company has .bought additional property, plant and equipmentpaid a large cash dividend to shareholderssold additional shares of common stockcollected more from customers than it paid for operating expenses


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