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30 Sep 2019

Which of the following statements regarding the cash flow statement is true or false?

Working capital changes are accounted for as cash flows from operating activities.

The purchase of property, plant, and equipment is classified as a financing activity.

Accounts Payable is classified as a cash flow from financing activities.

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Beverley SmithLv2

8 Sep 2019

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Related questions

1 )

The following events occurred last year at Dorder Corporation:

Purchase of plant and equipment	$26,000
Sale of long-term investment	$11,000
Dividends received on long-term investments	$7,000
Paid off bonds payable	$14,500
Depreciation expense	$13,000

Based on the above information, the cash provided (used) by investing activities for the year on the statement of cash flows would net to:

Last year Burch Corporation's cash account decreased by $33,000. Net cash provided by investing activities was $8,800. Net cash used in financing activities was $29,500. On the statement of cash flows, the net cash flow provided by (used in) operating activities was:

McCorey Corporation recorded the following events last year:

Repurchase by the company of its own common stock	$27,000
Sale of long-term investment	$46,000
Interest paid to lenders	$8,500
Dividends paid to the company's shareholders	$56,000
Collection by McCorey of a loan made to another company	$32,000
Payment of taxes to governmental bodies	$18,500

On the statement of cash flows, some of these events are classified as operating activities, some are classified as investing activities, and some are classified as financing activities.

Based solely on the information above, the net cash provided by (used in) investing activities on the statement of cash flows would be:

Statement of Cash Flows

The following is a list of the items to be included in thepreparation of Warrick Company's 2016 statement of cash flows:

Net income, $59,200

Payment for purchase of building, $98,000

Increase in accounts receivable, $7,400

Proceeds from issuance of common stock, $37,100

Increase in accounts payable, $4,500

Proceeds from sale of land, $7,000

Depreciation expense, $12,600

Payment of dividends, $36,000

Gain on sale of land, $5,300

Decrease in inventory, $3,700

Payment for purchase of long-term investments, $9,600

Amortization of discount on bonds payable, $1,900

Proceeds from issuance of note, $18,000

Increase in deferred taxes payable, $5,000

Equipment acquired by capital lease, $19,500

Decrease in salaries payable, $2,300

Beginning cash balance, $20,300

Required

1. Prepare the statement of cash flows.

WARRICK COMPANY
Statement of Cash Flows
For Year Ended December 31, 2016
Operating Activities:
Net income	$
Adjustment for noncash income items:
Add: Depreciation expense
Add: Amortization of discount on bonds payable
Add: Accumulated depreciation
Less: Gain on sale of land
Adjustments for cash flow effects from working capital items:
Increase in accounts receivable
Decrease in inventory
Increase in accounts payable
Decrease in salaries payable
Net cash provided by operating activities		$
Investing Activities:
Payment for purchase of building	$
Proceeds from sale of land
Payment for purchase of long-term investments
Net cash used for investing activities
Financing Activities:
Proceeds from issuance of common stock	$
Payment of accounts payable
Proceeds from issuance of note
Net cash provided by financing activities
Net Decrease in Cash		$
Cash, January 1, 2016
Cash, December 31, 2016		$

Investing and Financing Activities Not Affecting Cash
Investing Activities:
Acquisition of equipment under capital lease		$
Financing Activities:
Incurrence of capital lease obligation for equipment

Suppose Stuart Companyhas the following results related to cash flows for 2017:

Net Income of$7,700,000
Decrease in Accounts Payable of $900,000
Decrease in Accounts Receivable of $300,000
Decrease in Debt of $600,000
Depreciation Expenses of $1,700,000
Dividends of $800,000
Increase in Inventory of $800,000
Purchases of Property, Plant, & Equipment of $7,500,000
Other Adjustments from Financing Activities of $300,000
Other Adjustments from Investing Activities of $300,000
Other Adjustments from Operating Activities of $600,000

Create a statement ofcash flows with amounts in thousands.

What is theNet Cash Flow?