126.In preparing a company's statement of cash flows for the year just ended, the following information is available:
Loss on the sale of equipment$14,000
Purchase of equipment$225,000
Proceeds from the sale of equipment$106,000
Repayment of outstanding bonds$87,000
Purchase of treasury stock$25,000
Issuance of common stock$96,000
Purchase of land$115,000
Increase in accounts receivable during the year$33,000
Decrease in accounts payable during the year$75,000
Payment of cash dividends$35,000
Net cash flows from financing activities for the year were:
A. $147,000 of net cash used.
B. $26,000 of net cash used.
C. $347,000 of net cash used.
D. $51,000 of net cash used.
E. $340,000 of net cash used.
127.In preparing Marjorie Company's statement of cash flows for the most recent year, the following information is available:
Purchase of equipment$260,000
Proceeds from the sale of equipment$87,000
Purchase of land$91,000
Net cash flows from investing activities for the year were:
A. $438,000 of net cash used.
B. $438,000 of net cash provided.
C. $264,000 of net cash used.
D. $351,000 of net cash used.
E. $264,000 of net cash provided.
128.In preparing a company's statement of cash flows for the most recent year, Ransom Corp. reported the following information:
Repayment of outstanding bonds$107,000
Purchase of treasury stock$62,000
Issuance of common stock$46,000
Payment of cash dividends$15,000
Net cash flows from financing activities for the year were:
A. $230,000 of net cash used.
B. $230,000 of net cash provided.
C. $108,000 of net cash used.
D. $138,000 of net cash used.
E. $138,000 of net cash provided.
129.When analyzing the changes on a spreadsheet used to prepare a statement of cash flows, the cash flows from operating activities generally affect:
A. Net income, current assets, and current liabilities.
B. Noncurrent assets.
C. Noncurrent liability and equity accounts.
D. Both noncurrent assets and noncurrent liabilities.
E. Equity accounts only.
130.When analyzing the changes on a spreadsheet used to prepare a statement of cash flows, the cash flows from investing activities generally affect:
A. Net income, current assets, and current liabilities.
B. Noncurrent assets.
C. Noncurrent liability and equity accounts.
D. Both noncurrent assets and noncurrent liabilities.
E. Equity accounts only.
131.When analyzing the changes on a spreadsheet used to prepare a statement of cash flows, the cash flows from financing activities generally affect
A. Net income, current assets, and current liabilities.
B. Noncurrent assets.
C. Noncurrent liability and equity accounts.
D. Both noncurrent assets and noncurrent liabilities.
E. Equity accounts only.
132.Which of the following transactions or events should be reported as a source of cash from operating activities when using the direct method?
A. Credit sales.
B. Cash collections from customers.
C. Depreciation expense.
D. Cash received from the sale of a building.
E. Cash received from the sale of treasury stock.
133.When the operating activities section of the statement of cash flows is reported using the direct method, the FASB requires:
A. The preparation of the statement of cash flows under the indirect method be completed and reported with the statement of cash flows prepared using the direct method.
B. A reconciliation of net income to net cash provided or used by operating activities.
C. Footnotes to the financial statements disclosing the difference between net income and the cash provided or used by financing activities.
D. The income statement to be prepared under the cash basis of accounting.
E. Noncash investing and financing activities be included in the statement of cash flows.
134.All of the following statements related to reporting cash flows from operating activities under U.S. GAAP and IFRS are true except:
A. The definition of cash and cash equivalents is similar for U.S. GAAP and IFRS.
B. U.S. GAAP requires cash flows from interest revenue and dividend revenue be classified as operating activities.
C. IFRS permits classification of interest revenue and dividend revenue under operating or investing activities.
D. U.S. GAAP requires cash outflows for interest expense to be classified as financing activities.
E. IFRS permits classification of interest expense under operating or financing activities.
135.All of the following statements related to preparation of the statement of cash flows under U.S. GAAP and IFRS are true except:
A. Both U.S. GAAP and IFRS permit the reporting of cash flows from operating activities using either the direct or indirect method.
B. IFRS permits classification of cash outflows for interest expense under operating or financing based on which one results in better cash flows from operating activities.
C. U.S. GAAP requires cash outflows for income tax be classified as operating activities.
D. IFRS permits the splitting of income tax cash flows among operating, investing, and financing depending on the sources of that tax.
E. IFRS permits classification of interest expense under operating or financing activities provided it is consistently applied across periods.