C213 Chapter Exam Reviews with
Complete Solutions
The statement of cash flows replaces the - ANSWER-None of these
The statement of cash flows - ANSWER-Summarizes all cash inflows and outflows of
an entity for a given period of time
Which of the following is NOT a purpose of the statement of cash flows? - ANSWER-It
measures the profitability of an entity.
Which of the following statements is NOT true? - ANSWER-The statement of cash flows
includes transactions that are not already reflected in the balance sheet and income
statement.
Those transactions and events that enter into the determination of net income are
reported under which section of the statement of cash flows? - ANSWER-Operating
activities
Which of the following is the typical sequencing of activities on the statement of cash
flows? - ANSWER-Operating, investing, and financing
The exchange of debt for equipment would - ANSWER-Be shown as a supplementary
disclosure
Which of the following would NOT be reported as an investing activity on a statement of
cash flows? - ANSWER-Amounts borrowed
Which of the following would NOT be considered cash or cash equivalents for purposes
of preparing a statement of cash flows? - ANSWER-Notes receivable
Yuka Company had a beginning cash balance of $1,875. In addition, Yuka Company
reported the following items from its cash flow statement:
Operating activities
$6,450
Investing activities
($4,735)
Financing activities
($1,200)
Given this information, Yuka Company's ending cash balance is - ANSWER-$2,390
Ending cash balance: $1,875 + $6,450 - $4,735 - $1,200 = $2,390
,Avondale Inc. had the following cash transactions during 2012:
Sales receipts
$2,000,000
Inventory payments
1,500,000
Interest payments
20,000
Wage payments
120,000
Dividend receipts
10,000
Interest receipts
6,000
Equipment purchased
150,000
Stock of Canton Company purchased
50,000
Stock issued
300,000
Repaid a note (nonoperating)
100,000
What was Avondale's net increase in cash for the year? - ANSWER-$376,000
Net increase in cash: $2,000,000 - $1,500,000 - $20,000 - $120,000 + $10,000 +
$6,000 - $150,000 - $50,000 + $300,000 - $100,000 = $376,000
Avondale Inc. had the following cash transactions during 2012:
Sales receipts
$2,000,000
Inventory payments
1,500,000
Interest payments
20,000
Wage payments
120,000
Dividend receipts
10,000
Interest receipts
6,000
Equipment purchased
150,000
Stock of Canton Company purchased
50,000
Stock issued
300,000
, Repaid a note (nonoperating)
100,000
What was Avondale's net cash provided by (used in) operating activities? - ANSWER-
Cash provided by operating activities: $2,000,000 - $1,500,000 - $20,000 - $120,000 +
$10,000 + $6,000 = $376,000
The following financial information is available for the year 2012:
Operating activities
$ 309,800
Investing activities
($118,000)
Financing activities
($190,000)
Ending cash balance
$ 5,600
Given this information, what is the beginning cash balance? - ANSWER-Correct
Answer: $3,800
Beginning cash balance:
x + $309,800 - $118,000 - $190,000 = $5,600
x = $3,800
Hee Jung Company had the following information available:
Collections on accounts receivable
$53,200
Payments for equipment purchase
$23,200
Payments for wages and salaries
$18,000
Receipt of interest revenue
$ 2,500
Payments to principal amount on loan
$12,800
Payments for inventory
$22,200
Using this information, compute Hee Jung's cash provided by (paid for) operating
activities. - ANSWER-Correct Answer: $15,500
Operating activities: $53,200 - $18,000 + $2,500 - $22,200 = $15,500
Six-Step Process for Analysis of Income Statements and Comparative Balance Sheets -
ANSWER-Step 1. Compute the change in the cash balance during the period.
Step 2. Convert the income statement from an accrual basis to a cash basis.
Step 3. Analyze the long-term assets to identify the cash flow effects of investing
activities.
Complete Solutions
The statement of cash flows replaces the - ANSWER-None of these
The statement of cash flows - ANSWER-Summarizes all cash inflows and outflows of
an entity for a given period of time
Which of the following is NOT a purpose of the statement of cash flows? - ANSWER-It
measures the profitability of an entity.
Which of the following statements is NOT true? - ANSWER-The statement of cash flows
includes transactions that are not already reflected in the balance sheet and income
statement.
Those transactions and events that enter into the determination of net income are
reported under which section of the statement of cash flows? - ANSWER-Operating
activities
Which of the following is the typical sequencing of activities on the statement of cash
flows? - ANSWER-Operating, investing, and financing
The exchange of debt for equipment would - ANSWER-Be shown as a supplementary
disclosure
Which of the following would NOT be reported as an investing activity on a statement of
cash flows? - ANSWER-Amounts borrowed
Which of the following would NOT be considered cash or cash equivalents for purposes
of preparing a statement of cash flows? - ANSWER-Notes receivable
Yuka Company had a beginning cash balance of $1,875. In addition, Yuka Company
reported the following items from its cash flow statement:
Operating activities
$6,450
Investing activities
($4,735)
Financing activities
($1,200)
Given this information, Yuka Company's ending cash balance is - ANSWER-$2,390
Ending cash balance: $1,875 + $6,450 - $4,735 - $1,200 = $2,390
,Avondale Inc. had the following cash transactions during 2012:
Sales receipts
$2,000,000
Inventory payments
1,500,000
Interest payments
20,000
Wage payments
120,000
Dividend receipts
10,000
Interest receipts
6,000
Equipment purchased
150,000
Stock of Canton Company purchased
50,000
Stock issued
300,000
Repaid a note (nonoperating)
100,000
What was Avondale's net increase in cash for the year? - ANSWER-$376,000
Net increase in cash: $2,000,000 - $1,500,000 - $20,000 - $120,000 + $10,000 +
$6,000 - $150,000 - $50,000 + $300,000 - $100,000 = $376,000
Avondale Inc. had the following cash transactions during 2012:
Sales receipts
$2,000,000
Inventory payments
1,500,000
Interest payments
20,000
Wage payments
120,000
Dividend receipts
10,000
Interest receipts
6,000
Equipment purchased
150,000
Stock of Canton Company purchased
50,000
Stock issued
300,000
, Repaid a note (nonoperating)
100,000
What was Avondale's net cash provided by (used in) operating activities? - ANSWER-
Cash provided by operating activities: $2,000,000 - $1,500,000 - $20,000 - $120,000 +
$10,000 + $6,000 = $376,000
The following financial information is available for the year 2012:
Operating activities
$ 309,800
Investing activities
($118,000)
Financing activities
($190,000)
Ending cash balance
$ 5,600
Given this information, what is the beginning cash balance? - ANSWER-Correct
Answer: $3,800
Beginning cash balance:
x + $309,800 - $118,000 - $190,000 = $5,600
x = $3,800
Hee Jung Company had the following information available:
Collections on accounts receivable
$53,200
Payments for equipment purchase
$23,200
Payments for wages and salaries
$18,000
Receipt of interest revenue
$ 2,500
Payments to principal amount on loan
$12,800
Payments for inventory
$22,200
Using this information, compute Hee Jung's cash provided by (paid for) operating
activities. - ANSWER-Correct Answer: $15,500
Operating activities: $53,200 - $18,000 + $2,500 - $22,200 = $15,500
Six-Step Process for Analysis of Income Statements and Comparative Balance Sheets -
ANSWER-Step 1. Compute the change in the cash balance during the period.
Step 2. Convert the income statement from an accrual basis to a cash basis.
Step 3. Analyze the long-term assets to identify the cash flow effects of investing
activities.
