ACCT1101 Lecture Notes - Lecture 30: Cash Flow Statement, Cash Cash, Cash Flow
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Sorry about these values, this thing is kind of messed up. Ihope this can be understood.
The following is the Choco Companyâs balance sheet and incomestatement as of 12/31/2016.
Balance Sheet | 2015 | 2016 |
| Cash Accounts receivable Inventory Long-term investments Total assets Liabilities and stockholdersâ equity: (no value) Accounts payable Salary payable Bonds payable Common stock Retained earnings Total liabilities and stockholdersâ equity | $ 120,000 105,000 225,000 60,000 510,000 120,000 15,000 100,000 125,000 150,000 510,000 | 21,500 195,000 180,000 -0- 396,500 75,000 24,000 70,000 125,000 102,500 396,500 |
Income statement | ||
| Revenue:(no value) Sales Loss on sales of long-term investment Expenses: (no value) Cost of goods sold Salary expense Net income (loss) | 560,000 (7,500) (375,000) (180,000) (2,500) | |
During 2016, following transactions were made:
Sold long-term investment for a loss of $7,500 (sold for$52,500).
$30,000 of bonds payable matured in 2016.
Paid cash dividends of $45,000.
What is the amount of cash inflow/outflow/ from their customers?(assume Sales are all credit sales)
What is the amount of cash inflow/outflow from the loss on thesales of long-term investment?
What is the amount of cash inflow/outflow from theirsuppliers?
What is the amount of cash inflow/outflow from theiremployees?
What is the amount of cash inflow/outflow from their long-terminvestment?
What is the amount of cash inflow/outflow regarding the maturityof their bonds payable?
What is the amount of cash inflow/outflow regarding the cashdividends?
Using the above balance sheet, income statement and informationfrom a to g, prepare the entire cash flow statement using thedirect method.
| Choco Company Statement of Cash Flows For the year ended December 31, 2016 | |
| Cash flows from operating activities: Cash inflows: Cash outflows: Net cash flows from operating activities | |
| Cash flows from investing activities: Net cash flows from investing activities | |
| Cash flows from financing activities: Net cash flows from financing activities | |
Cash balance, 12/31/2016 | |
Which of the following statement is incorrectregarding the investing activities section of the statement of cashflows?
Investing activities deal with long-term liabilities (debt) andequity accounts. | ||
Increases in long-term asset balances suggest cash outflows topurchase assets. | ||
Decreases in long term asset balances suggest cash inflows fromselling assets. | ||
Investing activities involve cash purchases and cash disposalsof long-term assets. |
Which of the following statements iscorrect?
Investors need to understand that the value of a company'searnings per share is affected by its choices of accountingprinciples and assumptions. | ||
Earnings per share is calculated for a company's preferredstock. | ||
The most widely quoted measure of a company's earningsperformance is return on equity. | ||
The book value per share measures the market value of acorporation's stock. |
Which of the following statements is incorrectregarding preparing a statement of cash flows using the directmethod?
The direct method shows adjustments to net income. | ||
The direct method shows the specific sources and uses of cashthat are associated with operating activities. | ||
Noncash expenses, gains, and losses are not used in thedetermination of net cash flow from operating activities. | ||
A majority of companies use the indirect method rather than thedirect method. |
Which of the following statements regarding a process costsystem is false?
Use of a process cost system would be appropriate for a companythat manufactures luxury yachts. | ||
Unit costs are computed for each department. | ||
The number of equivalent whole units for a period takes intoaccount the stage of completion of ending work in processinventory. | ||
Unit cost is determined for a designated period of time. |
