Hyperion Enterprises received $120,000 in dividends from various holdings. Which would it do in this situation, and why?O It would report the $120,000 as a cash outflow from investing activities because dividends are monies paid to investors.O It would report the $120,000 as a cash inflow from investing activities because this is a cash inflow received frominvestment.O It would attach a separate note to the statement of cash flows because this is not directly related to operations.O It would report the $120,000 as a cash inflow from operating activities because this is a cash inflow reported on the incomestatement.

Dividends received from investments are classified as cash inflows from investing activities in the…

Answered: Hyperion Enterprises received $120,000…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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State the section(s) of the statement of cash flows prepared by the indirect method (operating activities, investing activities, financing activities, or not reported) and the amount that would be reported for each of the following transactions: Note: Only consider the cash component of each transaction. Note: If an item should not be reported, select "Not reported" and leave amount cell blank or enter "0". a. Received $120,000 from the sale of land costing $70,000. operatin financing investing not reported $fill in the blank 2 fill in blank $fill in the blank 4 b. Purchased investments for $75,000. fill in blank $fill in the blank 6 c. Declared $35,000 cash dividends on stock. Dividends of $5,000 were payable at the beginning of the year, and $6,000 were payable at the end of the year. fill in blank $fill in the blank 8 d. Acquired equipment for $64,000 cash. fill in blank $fill in the blank 10 e. Declared and issued 100 shares of $20 par common stock as…
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Consistent with U.S GAAP, we classify cash flows as operating, investing, or financing activities under IFRS. However, with regard to interest and dividend inflows and outflows, IFRS a. permits companies to report cash outflows from interest payments as either operating or investing cash flows. b. permits companies to report cash inflows from interest and dividends as either operating or financing cash flows. c. permits companies to report dividends paid as either financing or operating cash flows. d. requires companies to report cash outflows for interest payments and cash inflows from interest and dividends received as operating cash flows.
Explain why the following statement is true: The retained earnings account reportedon the balance sheet does not represent cash and is not “available” for dividend paymentsor anything else.
Indicate the effect, if any, that each separate transaction has on financing cash flows. Note: Select "No Effect" if there is no effect. a. Long-term notes payable with a carrying value of $17,600 are retired for $19,900 cash, resulting in a $2,300 loss. b. Paid cash dividends of $13,600 to common stockholders. c. Acquired $22,600 worth of machinery in exchange for common stock. Items a. Long-term notes payable b. Dividends c. Machinery Amount $ $ $ Effect on financing cash flows 19,900 Decrease 13,600 Decrease 22,600 No effect
Km. 208.
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5When a company repurchases its own stock, which of the following is the correct reporting on the statement of cash flows? A source of cash in the financing section A use of cash in the financing section A source of cash in the investing section A use of cash in the investing section
:All of the following statements are true regarding the statement of cash flows except Investing activities include transactions that affect issuance of common stock A O .Financing activities include transactions that affect long-term liabilities and equity.BO .Investing activities include transactions and events that come from the purchase and sale of long-term assets.CO .Noncash activities are investing and financing activities that do not affect cash flows.D
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Describe the methodology, similarities, and the differences between the direct and indirect methods of preparing the statement of cash flows Be sure to explain the major cash flow categories of operating, investing, and financing activities, and provide at least two examples of each activity. Then, describe the relationship between the beginning cash balance and the ending cash balance for the current period. Lastly, explain the reasons why one method (direct or indirect) is most often used by corporations to report cash flows.

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