Explore BrainMass

Questions concerning a statement of cash flows

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

1) If a firm issues $10 million in common stock and invests the proceeds in marketable securities, all of the following balance sheet categories will increase, except:
a) total assets
b) total liabilities
c) stockholder's equity
d) current assets

2) Which of the following accounts are included when calculating a firm's working capital?
I. accounts payable
II. accounts receivable
III. fixed assets
IV. Inventory

a) I and II only
b) I and III only
c) II and IV only
d) I, II, and IV only
e) II, III, and IV only

3) All else being equal, if a firm issues $100 million in 10% bonds and uses the proceeds to repurchase common stock that pays dividends of $10 million per year, all of the following will occur, except:

a) income taxes will decrease
b) interest expense will increase
c) net income will decrease
d) net cash available for other needs will decrease

4) A Statement of Cash Flows can be used to answer a variety of questions. Which of the following would this statement not be likely to answer?

a) Did we borrow any money?
b) Why did our cash balance increase or decrease?
c) What is the current level of inventory?
d) Did we issue any dividends?

5) On a Statement of Cash Flows, which of the following represents cash flows from the income statement?

a) funds provided by operations
b)f unds provided by investing activities
c) funds provided by the sale of assets
d) funds provided by financing activities
e) the change in the cash balance

© BrainMass Inc. brainmass.com October 25, 2018, 8:57 am ad1c9bdddf

Solution Summary

The following posting helps answer questions regarding cash flows.

See Also This Related BrainMass Solution

Statement of Cash Flows, Bonds, Net Cash, Payment of Dividends, Period Costs, and other Managerial Accounting Questions

The primary goal of managerial accounting is to provide information to:

a. creditors
b. management
c. investors
d. external auditors

On the statement of cash flows prepared by the indirect method, a $50,000 gain on the sale of investments would be

a. added to dividends declared in converting the dividends declared to the cash flows from financing activities related to dividends
b. deducted from dividends declared in converting the dividends declared to the cash flows from financing activities related to dividends
c. deducted from net income in converting the net income reported on the income statement to cash flows from operating activities
d. added to net income in converting the net income reported on the income statement to cash flows from operating activities

When a corporation issues bonds, it executes a contract with the bondholders, known as a bond debenture.

a. True
b. False

If the bonds are purchased between interest dates, the purchase price includes accrued interest since the last interest payment.

a. True
b. False

Loster Company reported a net loss of $14,089 for the year ended December 31, 2008. During the year, accounts receivable decreased $7,731, merchandise inventory increased $6,803, accounts payable increased by $13,479, and depreciation expense of $4,042 was recorded. What was the net cash used for or provided by operating activities during the year 2008?
Select the correct answer.

a. used net cash of $4,360.
b. used net cash of $14,089.
c. provided net cash of $4,360.
d. provided net cash of $14,089

Job order cost accounting systems can be used only for companies that manufacture a product.

a. True
b. False

Sinking Fund Income is reported in the income statement as

a. extraordinary
b. other income
c. gain on sinking fund transactions
d. income from operations

The payment of dividends is an example of a cost.

a. True
b. False

Period costs are

a. found on the balance sheet.
b. found on the job order cost sheets.
c. not involved in the production process.
d. classified as direct labor, direct material, or factory overhead.

Problem 19-10
The Stamping Department accepted Job 051507A on May 15th to make 1,000 funnels.
To complete the job they requisitioned 1,100 sheets at $1.20 per sheet and 1,150 grommets at $0.15 per set.
The cost driver that the Stamping Department uses is drop-forge strokes which are counted on a machine mounted counter. $2.25 is applied as overhead for each drop-forge stroke. Additionally $375.00 of overhead is applied to each job due to setup and teardown.
Direct labor is applied at $22.50 per hour for the machine operator and $11.10 for the machine loader. The job required 6 1/2 hours of labor by the team.
When the job was complete Job 051507A was transferred to Semi-finished Goods Inventory (SFGI). When the job was transferred, 20 sheets were returned unused to raw material inventory, 75 grommet sets were returned, and there were 1,115 strokes on the counter.

Journalize all events depicted as of May 15th.
(a) Journalize the purchasing of raw materials.
(b) Journalize the application of manufacturing overhead.
(c) Journalize the application of direct labor.
(d) Journalize the transfer to Semi-finished Goods Inventory (SFGI).

For a compound transaction, if an amount box does not require an entry, leave it blank or enter "0". If required, round your answers to two decimal places.

Temporary investments

a. do not include equity securities
b. include cash equivalents
c. are reported as current assets
d. all of these

Conversion costs are

a. direct materials and factory overhead
b. factory overhead and direct labor
c. direct materials and indirect labor
d. direct materials and direct labor

The cost of wages paid to employees directly involved in converting materials to finished product is classified as direct labor cost.

a. True
b. False

The percent of fixed assets to total assets is an example of

a. solvency analysis
b. horizontal analysis
c. profitability analysis
d. vertical analysis

Debtors are interested in the times-interest-earned ratio because they want to

a. know the tax effect of lending to a corporation
b. have adequate protection against a potential drop in earnings jeopardizing their interest payments
c. be sure their debt is backed by collateral
d. know what rate of interest the corporation is paying

An example of a period cost is:

a. property taxes on plant facilities
b. advertising expense
c. depreciation on factory equipment
d. indirect materials

Accounts receivable from sales to customers amounted to $40,000 and $32,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $110,000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows is

a. $150,000.
b. $102,000.
c. $110,000.
d. $118,000.

When there are material differences between the results of using the straight-line method and using the effective interest method of amortization, the effective interest method should be used.

a. True
b. False

The job order costing system is used by service firms to determine revenues, expenses, and ultimately profit.

a. True
b. False

A company that has 25,000 shares of $5.00 par value common stock issued and outstanding paid a dividend of $.75 per share. The market value of the stock is $20.00 per share. The company's dividend yield is:

a. 400%
b. 25%
c. 3.75%
d. 15%

Cash outflows from financing activities include the payment of cash dividends, the acquisition of treasury stock, and the repayment of amounts borrowed.

a. True
b. False

When a job is completed in a service organization, the job costs are transferred to the

a. finished goods account.
b. work in process account.
c. cost of goods sold account.
d. cost of services account

The vice presidents of production and sales and the controller hold line positions in most large organizations.
a. True
b. False

A staff department has no direct authority over a line department.

a. True
b. False

View Full Posting Details