ACCT 370 Read & Interact Revsine, Collins, Johnson, Mittelstaedt, Soffer Chapter 20 solution answers

ACCT 370 Read & Interact Revsine, Collins, Johnson, Mittelstaedt, & Soffer Chapter 20 solutions complete answers

 

The section on the cash flow statement that arises from transactions related to the production and delivery of goods and services to customers is called the       activities section.

 

A fourth section of the cash flow statements of companies having foreign operations consists of a single line item that

 

The operating section on the cash flow statement starts with net income using the

 

Categories of cash inflows and outflows of operating activities that are required to be reported under the direct method include

 

True or false: Both the direct method and indirect method will arrive at the same amount for cash flow from operating activities.

 

Cash flows that result from the purchase or sale of productive assets are

 

Dillon Company reported cost of goods sold of $325,000 for the current year. The beginning and ending balances in inventory were $45,500 and $55,000, respectively while the amounts for Accounts payable were $37,000 and $25,800. How much cash was paid to suppliers during the year?

 

An additional section on the cash flow statement having to do with foreign operations includes

 

Under the direct method, the reconciliation of net income to net cash provided by operating activities would be found

 

The direct method and the indirect method are alternative presentations for presenting cash flows from

 

Identify the correct statement regarding preparing cash flow from operations using the indirect method.

 

Which of the following are reasons that the overwhelming majority of public companies use the indirect method of preparing cash flow statements?

 

Identify the correct statement regarding interest income and interest expense.

 

Solar Corporation reported net income for the current year of $75,000. They reported depreciation expense of $12,575. Cash flow from operating activities is

 

Makalan Company reported net sales of $500,000 for the current year. The beginning and ending balances in accounts receivable were $62,500 and $75,000, respectively. How much cash was received from customers during the year?

 

Which of the following are true of deferred income taxes with regards to an indirect method cash flow statement?

 

True or false: The reconciliation of net income to net operating cash flow is a required supplemental disclosure for companies using the indirect method.

 

Solar Corporation reported net income for the current year of $75,000. The company also reported a loss on the sale of equipment of $1,000 after receiving $5,000 in proceeds. They purchased equipment for $25,400. How does this affect the cash flow statement using the indirect method?

 

An example of an item that was included in accrual-basis income but that did not affect operating cash flows includes all of the following except

 

True or false: The majority of public companies use the direct method of preparing cash flows from operating activities.

 

Forester Company has provided you the following information for the current year. The beginning and ending balances for Buildings and equipment were $275,000 and $300,000, Accumulated depreciation was $40,000 at the beginning of the year and $50,000 at the end of the year. A storage shed with an original cost of $60,000 and a book value of $40,000 was sold for $45,000. Which of the following statements is true?

 

Identify the correct statement regarding how depreciation expense affects the statement of cash flows.

 

Which of the following items would be added to accrual-basis net income in determining cash flows from operating activities using the indirect method?

 

Gratiot Corporation reported income tax expense of $13,500 on its income statement. It had income taxes payable of $4,000 at the beginning of the year and $3,475 at the end of the year. How does this affect cash provided by operating activities in a cash flow statement?

 

A decrease in prepaid rent

 

Solar Corporation reported net income for the current year of $75,000. The company also reported a gain on the sale of equipment of $1,275 after receiving $5,000 in proceeds. They purchased equipment for $25,400. How does this affect the cash flow statement using the indirect method?

 

A decrease in prepaid expenses

 

An example of an item that was excluded from accrual-basis income that affected operating cash flows includes all of the following except

 

Which of the following is true regarding a change in Accounts payable as it relates to the indirect method of a cash flow statement?

 

Under the indirect method, the gain on sale of equipment is

 

Which of the following items would be subtracted from accrual-basis net income in determining cash flows from operating activities using the indirect method?

 

A decrease in accrued expenses

 

An increase in inventory

 

An increase in income tax payable

 

An increase in prepaid expenses

 

A cash flow statement prepared under the direct method

 

Candlewax Company has net income of $175,000 in the current year. It also reported the following: increase in Accounts receivable of $5,000, decrease in Accounts payable of $2,500 and an increase in Accrued expenses of $1,300. Cash flow from operating activities is

 

Firms using the indirect method are required to separately disclose the amount of

 

Which of the following is not generally helpful in reconciling differences that result from year-to-year changes in comparative balance sheet accounts not coinciding with the changes implied from amounts reported on the cash flow statements?

 

An increase in accrued expenses

 

A decrease in income tax receivable

 

Which of the following would result in changes in asset balances unrelated to cash?

 

Which of the following is a reason that some claim to justify their preference of the direct method over the indirect method for computing net cash provided by operating activities?

 

The ______ method of translating financial statements generates a potential discrepancy between the change in the inventory amount presented in the balance sheet and the cash flow statement inventory change figure.

 

Firms using the       method of preparing cash flow statements must separately disclose the amount of interest paid.

 

Why are changes in inventory due to acquisitions not included as part of the adjustments to accrual-basis income to arrive at operating cash flows?

 

Amounts on the balance sheet that do not map directly to corresponding account changes in the statement of cash flows include all of the following except

 

Examples of noncash financing and investing activities include each of the following except

 

ASU 2016-18 requires that ______ be included in the cash amounts used to determine the change in cash to which the cash flow statement reconciles.

 

Holt Company's uses the indirect method to prepare a cash flow statement. Adjustments to reconcile net income to cash provided by operations include a $15,000 addition for change in inventory. Holt's comparative balance sheet, however, shows a $20,000 decrease. What could explain the $5,000 discrepancy?

 

Zero-coupon bond settlement should be

 

Use of the temporal method of translating financial statements will not generate a discrepancy between the change in the inventory amount presented in the balance sheet and the cash flow statement because

 

Collections on accounts receivable ______ operating cash flows while payments on accounts payable decrease _______ cash flows.

 

Cash flows arising from the acquisitions and divestitures of other companies are cash flows from

 

If accounts receivable is factored and it fails to qualify as a sale under GAAP, the proceeds are shown as a(n)       cash inflow.

 

Identify the correct statement regarding noncash financing and investing activities.

 

Improper capitalization of operating costs causes

 

Which of the following is true regarding restricted cash?

 

Identify the correct statement regarding software development costs for computer software companies.

 

Debt prepayments and extinguishment costs should be classified as _______ cash flows.

 

Each lease payment for an operating lease

 

True or false: Changes in working capital accounts provide major sources and uses of investing cash flows.

 

If accounts receivable are factored and the transfer qualifies as a sale, the proceeds are shown as a(n)

 

Improper capitalization ______ boosts operating cash flow because amounts capitalized are later expensed as depreciation or amortization.

 

Technological feasibility is established when the company has

 

At the inception of a finance lease,

 

Cash flows that result when a company sells its own stock or bonds, pays dividends, or issues or repays debt are

 

Cash transactions related to the determination of net income are reported in the operating section of the cash flow statement using the

 

Dexter Corporation reported net income for the current year of $85,000. An examination of their balance sheet showed the following: Accounts receivable increased by $7,500, inventory decreased by $3,250 and Accounts payable increased by $1,200. Using only this information, what is their cash flows from operating activities using the indirect method?

 

Firms using the direct method of reporting operating activities

 

The sections of the cash flow statement include each of the following except