Acct 102 Which of the following statements regarding Statement of Cash Flows is true?Multiple ChoiceThe indirect method of preparation of the Statement of Cash Flows begins with Net Income, and then adds back the noncash items such as depreciaticexpense.The direct méthod and the indirect method differ in all three sections of the Statement of Cash Flows.Proceeds from sales of plant assets are shown in the investing activities section as a subtraction.LEGOIn the direct method of preparation of Statement of Cash Flows, interest and dividends received are reflected in the Investing Activities section.

Cash flow statement shows the cash inflow and cash outflow due to the operating activities,…

Answered: g Statement of Cash Flows

Century 21 Accounting General Journal

11th Edition

ISBN:9781337680059

Author:Gilbertson

Publisher:Gilbertson

Chapter22: End-of-fiscal-period Work For A Corporation

Section: Chapter Questions

Problem 1ANFS

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Why is depreciation an addition in the operating section of the statement of cash flows, when prepared by the indirect method?
Reporting Net Cash Flow from Operating Activities The following information is available for Cornelius Inc: Required: 1. Compute the net cash flows from operating activities using the indirect method. 2. CONCEPTUAL CONNECTION Explain why Cornelius was able to report net cash flow from operating activities that was higher than net income. 3. CONCEPTUAL CONNECTION What could the difference between net income and cash flow from operating activities signal to financial statement users?
The gain on sale of equipment is deducted from net income to arrive at operating cash flows because a. the sale of long-term assets is an operating activity. b. the gain reveals the total cash received. c. all of the cash received from the sale is reported in the operating section. d. All of these. e. None of these.
In a statement of cash flows, receipts from sales of property, plant, and equipment generally are classified as: a. investing activities b. selling activities c. operating activities d. financing activities
Use the following information from Albuquerque Companys financial statements to determine operating net cash flows (indirect method).
Analysis of Forest Companys accounts revealed the following activity for its Land account, with descriptions added for clarity of analysis. How would these two transactions be reported for cash flow purposes? Note the section of the statement of cash flow, if applicable, and if the transaction represents a cash source, cash use, or noncash transaction.
Classification of Cash Flows Patel Company reported the following items in its statement of cash flows presented using the indirect method. a. Issuance of common stock b. Cash paid for interest c. Sold equipment for cash d. Receipt of cash dividend on investment e. Repayment of principal on long-term debt f. Loss on disposal of equipment. Required: Indicate whether each item should be classified as a cash flow from operating activities, a cash flow from investing activities, a cash flow from financing activities. Use the following information for Cornerstone Exercises 11-16 and 11-17: A review of the balance sheet of Peterson Inc. revealed the following changes in the account balances: a. Increase in long-term investment b Increase in accounts receivable c. Increase in common stock d. Increase in long-term debt e. Decrease in accounts payable f. Decrease in supplies inventory g. Increase in prepaid insurance h. Decrease in retained earnings
Use the following information from Jumper Companys financial statements to determine operating net cash flows (indirect method).
Preparing Net Cash Flows from Operating Activities-Direct Method Colassard Industries has the following data available for preparation of its statement of cash flows: Required: Prepare the cash flows from operating activities section of the statement of cash flows using the direct method.

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