Financial Accounting
9th Edition
ISBN: 9781259222139
Author: Robert Libby, Patricia Libby, Frank Hodge Ch
Publisher: McGraw-Hill Education
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Chapter A, Problem 8E
1.
To determine
To explain: The effect of equity-method investment on the investing section of
2.
To determine
To explain: The effect of equity in earnings of affiliated companies, and receipt of cash dividends on the operating section of cash flow statement (indirect method)
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Which of the following should be deducted from net incomein calculating net cash flow from operating activities using the indirect method?
Group of answer choices
a loss on sale of long-term investments
a increase in accounts payable
a increase in accounts receivable
preferred dividends declared and paid
Which of the following statements is true?
Select one:
a. Dividends paid are classified as a cash outflow from operating activities in the statement of cash flows
b. Losses on the sale of long-term assets are an adjustment reported in the operating activities section of the statement of cash flows under the indirect method
c. Repayment of long-term debt is classified as a cash outflow from investing activities in the statement of cash flows
d. Investment in another company's common stock is classified as a cash outflow from financing activities in the statement of cash flows
h
Chapter A Solutions
Financial Accounting
Ch. A - Prob. 1QCh. A - Explain the difference in accounting methods used...Ch. A - Explain how bonds held to maturity are reported on...Ch. A - Explain the application of the cost principle to...Ch. A - Under the fair value method, when and how does the...Ch. A - Under the equity method, why does the investor...Ch. A - Prob. 7QCh. A - Prob. 8QCh. A - Prob. 9QCh. A - Company X owns 40 percent of Company Y and...
Ch. A - Prob. 2MCQCh. A - Dividends received from stock that is reported as...Ch. A - Prob. 4MCQCh. A - Prob. 5MCQCh. A - When using the equity method of accounting, when...Ch. A - Prob. 7MCQCh. A - Prob. 8MCQCh. A - Which of the following is true regarding the...Ch. A - Prob. 10MCQCh. A - Matching Measurement and Reporting Methods Match...Ch. A - Prob. 2MECh. A - Prob. 3MECh. A - Prob. 4MECh. A - Prob. 5MECh. A - Prob. 6MECh. A - Prob. 7MECh. A - Prob. 8MECh. A - Prob. 9MECh. A - Prob. 10MECh. A - Prob. 11MECh. A - Prob. 1ECh. A - Prob. 2ECh. A - Recording Transactions in the Available-for-Sale...Ch. A - Prob. 4ECh. A - Prob. 5ECh. A - Reporting Gains and Losses in the Trading...Ch. A - Prob. 7ECh. A - Prob. 8ECh. A - Prob. 9ECh. A - Prob. 10ECh. A - Prob. 11ECh. A - Prob. 1PCh. A - Prob. 2PCh. A - Prob. 3PCh. A - Prob. 4PCh. A - Prob. 5PCh. A - Comparing Methods to Account for Various Levels of...Ch. A - Prob. 7PCh. A - Recording Investments for Significant Influence LO...Ch. A - Prob. 9PCh. A - Prob. 10PCh. A - Prob. 11PCh. A - Prob. 1APCh. A - Prob. 2APCh. A - Reporting Passive Investments During January 2017,...Ch. A - Prob. 4APCh. A - Prob. 5APCh. A - Prob. 6APCh. A - Prob. 1CONCh. A - Finding Financial Information Refer to the...Ch. A - Prob. 2CPCh. A - Prob. 3CPCh. A - Prob. 4CPCh. A - Prob. 5CPCh. A - Prob. 6CP
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- In which section of the statement of cash flows would each of the following transactions be included? For each, identify the appropriate section of the statement of cash flows as operating (O), investing (I), financing (F), or none (N). (Note: some transactions might involve two sections.) A. collected accounts receivable from customers B. issued common stock for cash C. declared and paid dividends D. paid accounts payable balance E. sold a long-term asset for the same amount as purchasedarrow_forwardOn which financial statement would the Dividends account appear? A. Balance Sheet B. Income Statement C. Retained Earnings Statement D. Statement of Cash Flowsarrow_forwardWhich of the following represents a source of cash in the investing section? A. sale of investments B. depreciation expense C. decrease in accounts receivable D. decrease in bonds payablearrow_forward
- On which two financial statements would the Retained Earnings account appear? A. Balance Sheet B. Income Statement C. Retained Earnings Statement D. Statement of Cash Flowsarrow_forwardCash dividends declared out of current earnings were distributed to an investor. How will the investors investment account be affected by those dividends under each of the following accounting methods?arrow_forwardIn which section of the statement of cash flows would each of the following transactions be included? For each, identify the appropriate section of the statement of cash flows as operating (O), investing (I), financing (F), or none (N). (Note: some transactions might involve two sections.) A. paid advertising expense B. paid dividends to shareholders C. purchased business equipment D. sold merchandise to customers E. purchased plant assetsarrow_forward
- Classification of Cash Flows The following are several items that might be disclosed on a companys statement of cash flows presented using the indirect method. a. Net income b. Depreciation expense c. Issuance of common stock d. Loss on disposal of equipment e. Purchase of a building f. Decrease in accounts payable g. Converted bonds into common stock h. Sale of long-term investment i. Payment of interest j. Increase in inventory Required: 1. Indicate whether each item should be classified as a cash flow from operating activities, cash flow from investing activities, cash flow from financing activities, or noncash investing and financing activity. 2. CONCEPTUAL CONNECTION Why is the proper classification of cash flows important?arrow_forwardWhich financial statement shows the financial performance of the company on a cash basis? A. balance sheet B. statement of owners equity C. statement of cash flows D. income statementarrow_forwardWhich is the proper order of the sections of the statement of cash flows? A. financing, investing, operating B. operating, investing, financing C. investing, operating, financing D. operating, financing, investingarrow_forward
- Which statement is most directly affected by a change to net income? A. balance sheet B. income statement C. statement of retained earnings D. statement of cash flowsarrow_forwardAnalyzing Changes in Balance Sheet Accounts Refer to the information for Peterson Inc. above. Required: Indicate whether each of the changes above produces a cash increase, a cash decrease, or is a noncash activity.arrow_forwardOn which financial statement would the Supplies account appear? A. Balance Sheet B. Income Statement C. Retained Earnings Statement D. Statement of Cash Flowsarrow_forward
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The KEY to Understanding Financial Statements; Author: Accounting Stuff;https://www.youtube.com/watch?v=_F6a0ddbjtI;License: Standard Youtube License