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1 2 Which of the following is reported as an investing activity in the statement of cash flows? Multiple Choice 8/8 points awarded . Sale of a subsidiary O Purchase of highly liquid, short-term investments, using excess cash O Issuance of a long-term promissory note Sale of treasury stock
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Question Content Area
On the statement of cash flows, the financing activities section would include all of the following except
a. cash paid for dividends
b. cash received from the sale of bonds payable
c. cash paid for the purchase of treasury stock
d. cash paid for the interest on bonds payable
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Question Content Area
On the statement of cash flows, the operating activities section would include
a.cash paid for the purchase of investments
b.cash received from the issuance of common stock
c.cash paid for cash dividends
d.cash paid for interest on short-term notes payable
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Classifying Items in the Statement of Cash Flows
The following items are commonly reported in a statement of cash flows (indirect method presentation). For each item 1 through 20, determine (a) in which section the item is presented (operating, investing, or financing) and (b) whether the associated dollar amount is added or subtracted in the statement.
(a)
(b)
1. Payments of short-term debt.
Answer
Answer
2. Repurchases of common stock.
Answer
Answer
3. Purchases of property and equipment.
Answer
Answer
4. Sale of investments classified as long-term.
Answer
Answer
5. Proceeds from the issuance of common stock.
Answer
Answer
6. Increase in prepaid expenses and other current assets.
Answer
Answer
7. Acquisition for cash of a competitor.
Answer
Answer
8. Increase in current income tax payable.
Answer
Answer
9. Decrease in accounts payable.
Answer
Answer
10. Dividends paid to stockholders.
Answer
Answer
11.…
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Which statement cash of flows shows the inflows and outflows of the issue and repurchase of stock?
A. Fiancing
B. Operating
C. Investing
D. None of the above
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On the statement of cash flows, the investing activities section would include
a. cash paid for dividends
Ob. cash paid for retirement of bonds payable
Oc. cash received from the issuance of capital stock
Od. cash received from the sale of investments
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14.
Which of the following would be classified as a financing activity on a statement of cash flows?
Sale of a loan receivable
Payment of interest to a creditor
Payment of a bond payable
Declaration and distribution of a stock dividend
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The purchase of stock of another company as an investment would appear on the statement of cash flows as an O a a. outflow of cash in the investing activities section Ob. outflow of cash in the financing activities section O c. outflow of cash in the operating activities section Od. item listed in a separate schedule of noncash investing and financing activities
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Statement of cash flows
P1
Label the following headings, line items, and notes with the numbers 1
through 13 according to their sequential order (from top to bottom) for
presentation on the statement of cash flows.
a. "Cash flows from investing activities" title
b. "For period Ended date" heading
c. "Cash flows from operating activities" title
d. Company name
e. Schedule or note disclosure of noncash investing and
financing transactions
f. "Statement of Cash Flows" heading
g. Net increase (decrease) in cash $
h. Net cash provided (used) by operating activities $
i. Cash (and equivalents) balance at prior period-end $
j. Net cash provided (used) by financing activities $
k. "Cash flows from financing activities" title
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2.
a. In what section of the statement of cash flows would a Gain be reported when the indirect method is used?
Noncash activities note
Investing Activities
Financing Activities
Operating Activitiesb. In what section of the statement of cash flows is the purchase of treasury stock reported?
Investing Activities
Operating Activities
Noncash activities note
Financing Activities
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Which of these cash flows would be classified under cash flows from financing activities?
i) Cash received from sale of goodsii) Cash paid for repayment of loaniii) Cash paid for dividendsiv) Cash paid for purchase of landv) Cash received from issue of shares
i, ii, and iii
ii, iv and iii
ii, iii and v
i, iv and v
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Adjust the Cash Balance
We obtain the following 2020 forecasts of selected financial statement line items for Journey Company.
2019
Actual 2020 Est.
$535,667 $559,772
50,725 46,945
261,998 233,178
38,688 38,688
43,618
(11,270)
(41,323)
$ millions
Net Sales
Marketable securities
Long-term debt
Treasury stock (deducted from equity)
Cash generated by operations
Cash used for investing
Cash used for financing
Total net change in cash
Cash at beginning of period
Cash at end of period
Note: Complete the entire question in Excel using the following template: Excel Template. Format each answer to two decimal places. Then enter the answers into the provided spaces below with two decimal places.
a. Does forecasted cash deviate from the normal level for this company?
Calculate the company's normal cash level as a percentage of sales.
Normal cash as a % of sales
0%
$
Using the answer above, compute what should be the normal cash balance for FY2020.
Normal cash balance for FY2020
0
b. Is the…
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Classifying Cash Flows
Identify the type of cash flow activity for each of the following events (operatir g, investing, or financing):
a. Redeemed bonds
b. Issued preferred stock
c. Paid cash dividends
d. Net income
e. Sold equipment
f. Purchased treasury stock
g. Purchased patents
h. Purchased buildings
i. Sold long-term investments
j. Issued bonds
k. Issued common stock
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When preparing the operating section of the cash flow statement using the indirect method, which of the
following financial statements or sections in the financial statement are used?
O Long-term liabilities and stockholders' equity from the balance sheet.
O Long-term assets from the balance sheet.
O Income statement plus long-term assets from the balance sheet.
O Income statement plus current assets and current liabilities from the balance sheet.
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- Question Content Area On the statement of cash flows, the financing activities section would include all of the following except a. cash paid for dividends b. cash received from the sale of bonds payable c. cash paid for the purchase of treasury stock d. cash paid for the interest on bonds payablearrow_forwardQuestion Content Area On the statement of cash flows, the operating activities section would include a.cash paid for the purchase of investments b.cash received from the issuance of common stock c.cash paid for cash dividends d.cash paid for interest on short-term notes payablearrow_forwardClassifying Items in the Statement of Cash Flows The following items are commonly reported in a statement of cash flows (indirect method presentation). For each item 1 through 20, determine (a) in which section the item is presented (operating, investing, or financing) and (b) whether the associated dollar amount is added or subtracted in the statement. (a) (b) 1. Payments of short-term debt. Answer Answer 2. Repurchases of common stock. Answer Answer 3. Purchases of property and equipment. Answer Answer 4. Sale of investments classified as long-term. Answer Answer 5. Proceeds from the issuance of common stock. Answer Answer 6. Increase in prepaid expenses and other current assets. Answer Answer 7. Acquisition for cash of a competitor. Answer Answer 8. Increase in current income tax payable. Answer Answer 9. Decrease in accounts payable. Answer Answer 10. Dividends paid to stockholders. Answer Answer 11.…arrow_forward
- Which statement cash of flows shows the inflows and outflows of the issue and repurchase of stock? A. Fiancing B. Operating C. Investing D. None of the abovearrow_forwardOn the statement of cash flows, the investing activities section would include a. cash paid for dividends Ob. cash paid for retirement of bonds payable Oc. cash received from the issuance of capital stock Od. cash received from the sale of investmentsarrow_forward14. Which of the following would be classified as a financing activity on a statement of cash flows? Sale of a loan receivable Payment of interest to a creditor Payment of a bond payable Declaration and distribution of a stock dividendarrow_forward
- The purchase of stock of another company as an investment would appear on the statement of cash flows as an O a a. outflow of cash in the investing activities section Ob. outflow of cash in the financing activities section O c. outflow of cash in the operating activities section Od. item listed in a separate schedule of noncash investing and financing activitiesarrow_forwardStatement of cash flows P1 Label the following headings, line items, and notes with the numbers 1 through 13 according to their sequential order (from top to bottom) for presentation on the statement of cash flows. a. "Cash flows from investing activities" title b. "For period Ended date" heading c. "Cash flows from operating activities" title d. Company name e. Schedule or note disclosure of noncash investing and financing transactions f. "Statement of Cash Flows" heading g. Net increase (decrease) in cash $ h. Net cash provided (used) by operating activities $ i. Cash (and equivalents) balance at prior period-end $ j. Net cash provided (used) by financing activities $ k. "Cash flows from financing activities" titlearrow_forward2. a. In what section of the statement of cash flows would a Gain be reported when the indirect method is used? Noncash activities note Investing Activities Financing Activities Operating Activitiesb. In what section of the statement of cash flows is the purchase of treasury stock reported? Investing Activities Operating Activities Noncash activities note Financing Activitiesarrow_forward
- Which of these cash flows would be classified under cash flows from financing activities? i) Cash received from sale of goodsii) Cash paid for repayment of loaniii) Cash paid for dividendsiv) Cash paid for purchase of landv) Cash received from issue of shares i, ii, and iii ii, iv and iii ii, iii and v i, iv and varrow_forwardAdjust the Cash Balance We obtain the following 2020 forecasts of selected financial statement line items for Journey Company. 2019 Actual 2020 Est. $535,667 $559,772 50,725 46,945 261,998 233,178 38,688 38,688 43,618 (11,270) (41,323) $ millions Net Sales Marketable securities Long-term debt Treasury stock (deducted from equity) Cash generated by operations Cash used for investing Cash used for financing Total net change in cash Cash at beginning of period Cash at end of period Note: Complete the entire question in Excel using the following template: Excel Template. Format each answer to two decimal places. Then enter the answers into the provided spaces below with two decimal places. a. Does forecasted cash deviate from the normal level for this company? Calculate the company's normal cash level as a percentage of sales. Normal cash as a % of sales 0% $ Using the answer above, compute what should be the normal cash balance for FY2020. Normal cash balance for FY2020 0 b. Is the…arrow_forwardClassifying Cash Flows Identify the type of cash flow activity for each of the following events (operatir g, investing, or financing): a. Redeemed bonds b. Issued preferred stock c. Paid cash dividends d. Net income e. Sold equipment f. Purchased treasury stock g. Purchased patents h. Purchased buildings i. Sold long-term investments j. Issued bonds k. Issued common stockarrow_forward
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