SBA – Statement of Cash Flows Quiz 2

Name: __________________________ Date: _____________

1. The acquisition of land by issuing common stock is

A) a noncash transaction which is not reported in the body of a statement of cash
flows.
B) a cash transaction and would be reported in the body of a statement of cash flows.
C) a noncash transaction and would be reported in the body of a statement of cash
flows.
D) only reported if the statement of cash flows is prepared using the direct method.

2. The order of presentation of activities on the statement of cash flows is

A) operating, investing, and financing.
B) operating, financing, and investing.
C) financing, operating, and investing.
D) financing, investing, and operating.

3. Financing activities involve

A) lending money.
B) acquiring investments.
C) issuing debt.
D) acquiring long-lived assets.

4. Investing activities include

A) collecting cash on loans made.
B) obtaining cash from creditors.
C) obtaining capital from owners.
D) repaying money previously borrowed.

5. Which of the following transactions does not affect cash during a period?
A) Write-off of an uncollectible account
B) Collection of an accounts receivable
C) Sale of treasury stock
D) Exercise of the call option on bonds payable

6. Which one of the following affects cash during a period?

A) Recording depreciation expense
B) Declaration of a cash dividend
C) Write-off of an uncollectible account receivable
D) Payment of an accounts payable

7. Indicate where the event paid income taxes would appear, if at all, on the
statement of cash flows.
A) Operating activities section
B) Investing activities section
C) Financing activities section
D) Does not represent a cash flow

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 8. Indicate where the event common stock issued for cash would appear, if at all, on
the indirect statement of cash flows.
A) Operating activities section
B) Investing activities section
C) Financing activities section
D) Does not represent a cash flow

9. Indicate where the event purchased land for cash would appear, if at all, on the
indirect statement of cash flows.
A) Operating activities section
B) Investing activities section
C) Financing activities section
D) Does not represent a cash flow

10. Indicate where the event purchased land and a building with a mortgage would
appear, if at all, on the indirect statement of cash flows.
A) Operating activities section
B) Investing activities section
C) Financing activities section
D) Does not represent a cash flow

11. Which one of the following items is not necessary in preparing a statement of
cash flows?
A) Determine the change in cash
B) Determine the cash provided by operations
C) Determine cash from financing and investing activities
D) Determine the cash in all bank accounts

Problem-Solving (2 points each; please show supporting computations. The final answer should
be properly labelled and double-ruled.)

12. Joan's Vegetable Market had the following transactions during 2023:
1. Issued $60,000 of par value common stock for cash.
2. Repaid a 6 year note payable in the amount of $21,000.
3. Acquired land by issuing common stock of par value $50,000.
4. Declared and paid a cash dividend of $5,000.
5. Sold a long-term investment (cost $63,000) for cash of $6,000.
6. Acquired an investment in SMC stock for cash of $10,000.
What is the net cash provided by financing activities?
A) $34,000
B) $80,000
C) $39,000
D) $0

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 13. Joan's Vegetable Market had the following transactions during 2023:
1. Issued $50,000 of par value common stock for cash.
2. Repaid a 6 year note payable in the amount of $22,000.
3. Acquired land by issuing common stock of par value $100,000.
4. Declared and paid a cash dividend of $2,000.
5. Sold a long-term investment (cost $63,000) for cash of $6,000.
6. Acquired an investment in SMC stock for cash of $12,000.
What is the net cash provided by investing activities?
A) $12,000
B) $32,000
C) ($6,000)
D) $6,000

14. Miracle Company purchased treasury stock with a cost of $15,000 during 2023.
During the year, the company paid dividends of $20,000 and issued bonds
payable for proceeds of $866,000. Cash flows from financing activities for 2013
total
A) $846,000 net cash inflow.
B) $861,000 net cash inflow.
C) $866,000 net cash outflow.
D) $831,000 net cash inflow.

15. Carrot Company issued common stock for proceeds of $381,000 during 2023.
The company paid dividends of $90,000 and issued a long-term note payable for
$95,000 in exchange for equipment during the year. The company also purchased
treasury stock that had a cost of $18,000. The financing section of the statement
of cash flows will report net cash inflows of
A) $273,000.
B) $489,000.
C) $183,000.
D) $363,000.

16. The net income reported on the income statement for the current year was
$225,000. Depreciation recorded on plant assets was $38,000. Accounts
receivable and inventories increased by $2,000 and $8,000, respectively. Prepaid
expenses and accounts payable decreased by $1,000 and $11,000 respectively.
How much cash was provided by operating activities?
A) $205,000
B) $243,000
C) $225,000
D) $259,000

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 17. The net income reported on the income statement for the current year was
$240,000. Depreciation was $50,000. Account receivable and inventories
decreased by $10,000 and $30,000, respectively. Prepaid expenses and accounts
payable increased, respectively, by $1,000 and $8,000. How much cash was
provided by operating activities?
A) $301,000
B) $337,000
C) $321,000
D) $329,000

18. If a gain of $15,000 is incurred in selling (for cash) office equipment having a
book value of $100,000, the total amount reported in the cash flows from
investing activities section of the statement of cash flows is
A) $95,000.
B) $115,000.
C) $100,000.
D) $15,000.

19. In the Paper Corporation, cash receipts from customers were $138,000, cash
payments for operating expenses were $102,000, and one-third of the company's
$6,300 income taxes were paid during the year. Net cash provided by operating
activities is:
A) $36,000.
B) $29,700.
C) $33,900.
D) $31,800.

20. Crush Company reports the following:

End of Year Beginning of Year
Inventory $27,000 $42,000
Accounts Payable 32,000 12,000
If cost of goods sold for the year is $210,000, the amount of cash paid to
suppliers is
A) $215,000.
B) $205,000.
C) $175,000.
D) $245,000.

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 21. During the year, Salaries and Wages Payable decreased by $6,000. If Salaries
and Wages Expense amounted to $170,000 for the year, the cash paid to
employees (including deductions from gross pay) is
A) $176,000.
B) $170,000.
C) $164,000.
D) $182,000.

22. Gore Company reports a $16,000 increase in inventory and a $6,000 increase in
accounts payable during the year. Cost of Goods Sold for the year was $160,000.
The cash payments made to suppliers were
A) $160,000.
B) $170,000.
C) $140,000.
D) $155,000.

23. Ranger Company had credit sales of $550,000. The beginning accounts
receivable balance was $40,000 and the ending accounts receivable balance was
$140,000. What were the cash collections from customers during the period?
A) $650,000
B) $550,000
C) $450,000
D) $590,000

24. Hark Inc. had cash sales of $400,000 and credit sales of $1,100,000. The
accounts receivable balance increased $25,000 during the year. How much cash
did Hark receive from its customers during the year?
A) $1,475,000
B) $1,075,000
C) $1,500,000
D) $725,000

25. Barry Company had a cost of purchases of $250,000. The comparative balance
sheet analysis revealed a $10,000 decrease in inventory and a $20,000 increase in
accounts payable. What were Barry's cash payments to suppliers?
A) $230,000
B) $220,000
C) $260,000
D) $280,000

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