Question : 57. Under what section of the Statement of Cash Flows : 1255771

 

 

57. Under what section of the Statement of Cash Flows would you classify the purchase of equipment by issuing a long-term note payable?

a.

Operating.

b.

Investing.

c.

Financing.

d.

Noncash activity.

 

 

58. Which of the following transactions would not create a cash flow?

a.

The company purchased some of its own stock from a stockholder.

b.

Payment of a dividend.

c.

The company purchased land by issuing common stock.

d.

Sale of equipment at book value.

 

 

59. Which of the following is an example of a noncash activity?

a. Sale of land for less than its cost.

b. Purchase of land by issuing debt.

c. Sale of land for more than its cost.

d. Purchase of land using cash proceeds from issuance of common stock.

 

 

60. Which of the following is not true regarding cash flows?

a.

Operating activities include the payment of dividends.

b.

Investing activities involve long-term investments.

c.

Financing activities involve long-term liabilities and equities.

d.

Purchasing a building with a note is considered a noncash activity.

 

 

61. Dividends received from an investment is classified as a(an) __________ cash flow, and paying dividends on stock issued is classified as a(an) ____________ cash flow on the Statement of Cash Flows.

a.

Operating; Operating.

b.

Operating; Financing.

c.

Financing; Operating.

d.

Investing; Financing.

 

 

62. The collection of cash from customers would be classified as which type of cash flow on the Statement of Cash Flows?

a.

Financing.

b.

Investing.

c.

Operating.

d.

Not reported on the statement of cash flows.

 

 

63. The indirect and direct methods:

a. Are used by companies about equally in actual practice.

b. Affect the presentations of operating, investing, and financing activities.

c. Arrive at different amounts for net cash flows from operating activities.

d. Are two allowable methods to present operating activities in the statement of cash flows.

 

 

64. In the operating activities section of the statement of cash flows, we start with net income when using:

a.The direct method.

b.The indirect method.

c.Both the direct and the indirect method.

d.Neither the direct nor the indirect method.

 

 

65. Arrow Printers paid $2,000 interest on short-term notes payable, $10,000 interest on long-term bonds, and $6,000 in dividends on its common stock. Arrow would report cash outflows from activities, as follows:

a.Operating, $2,000; Financing $16,000.

b.Operating, $0; Financing $18,000.

c.Operating, $12,000; Financing $6,000.

d.Operating, $18,000; Financing $0.

 

Use the following information to answer the next 3 questions:

 

Bad Brad’s BBQ had cash flows for the year as follows ($ in millions):

 

CASH RECEIVED FROM:

 

Customers

$  1,800

Interest on investments

200

Sale of land

100

Sale of common stock

600

Issuance of debt securities

2,000

 

 

CASH PAID FOR:

 

Interest on debt

$    300

Income tax

80

Debt principal reduction

1,500

Purchase of equipment

4,000

Purchase of inventory

1,000

Dividends on common stock

200

Operating expenses

500

 

 

66. Bad Brad’s would report net cash inflows (outflows) from operating activities in the amount of:

a.$(80).

b.$120.

c.$200.

d.$420.

 

 

 

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