Depreciation in Indirect Cash Flows Topic 13

What effect does depreciation expense have on the Statement of Cash Flows (indirect method)?

1. Add to net income in operating activities
2. Subtract from net income in operating activities
3. Cash inflow from investing activities
4. Cash outflow from investing activities
5. Would not appear on the statement of cash flows

Investing Activity Classification Topic 13

Which of the following is an investing activity?

1. Purchase of treasury stock
2. Payment of dividends
3. Collecting a note receivable
4. Repayment of a long-term note payable
5. All of the above are investing activities

Operating Activities, Indirect Method Topic 13

Which of the following could not appear on the statement of cash flows in the operating activity section as an adjustment to net income (indirect method)?

1. subtract loss on sale of investments
2. add amortization expense
3. subtract decrease in accounts payable
4. subtract increase in prepaid insurance
5. all of the above could be adjustments to net income in the operating activity section

Cash Flows and Gains Topic 13

Phoenix Co. sold an unused building for 187,000. The building's book value on the date of sale was 182,000. How will this transaction appear on a statement of cash flows prepared using the indirect method.

1. 187,000 increase in investing activities and 5,000 decrease in operating activities
2. 187,000 increase in investing activities and 5,000 increase in operating activities
3. 182,000 increase in investing activities and 5,000 increase in operating activities
4. 182,000 increase in investing activities and 5,000 decrease in operating activities
5. 182,000 increase in investing activities and no effect in operating activities

Gain on Sale of Equipment Topic 13

Maverick Co. sold equipment with a cost of $30,000 and accumulated depreciation of $12,000 for an amount that resulted in a gain of $4,000. What amount should Maverick report on the statement of cash flows as "proceeds from sale of plant assets"?

1. 30,000
2. 14,000
3. 22,000
4. 34,000

Investing vs Financing Topic 13

Given the following information, compute the cash flow from investing and financing activities.

Comprehensive Cash Flow Topic 13

The Murray Company reported the following income statement for the current year and two years of balance sheet information.

Balance Sheets

Equipment with a book value of 10,000 was sold for cash. Depreciation expense on the building was 10,000. The remainder of depreciation expense was attributable to equipment.

Q1: The amount of cash generated from operations this year was:

1. 30,000
2. 42,000
3. 59,000
4. 76,000
5. 82,000

Q2: The cash payment for dividends was:

1. 23,000
2. 24,000
3. 26,000
4. 29,000

Q3: The cash inflow (outflow) from investing activities was:

1. (9,000)
2. (6,000)
3. (4,000)
4. (15,000)
5. 6,000

Q4: The cash inflow (outflow) from financing activities was:

1. (40,000)
2. 31,000
3. (78,000)
4. (66,000)