Question 1.1. Miracle Company purchased treasury stock with a cost of $15,000 during 2012. During the year, the company paid dividends of $20,000 and issued bonds payable for proceeds of $866,000. Cash flows from financing activities for 2012 total
$846,000 net cash inflow.
$861,000 net cash inflow.
$866,000 net cash outflow.
$831,000 net cash inflow.
Question 2. 2. The statement of cash flows reports each of the following except
cash receipts from operating activities.
cash payments from investing activities.
the net change in cash.
cash sales.
Question 3. 3. The statement of cash flows
must be prepared on a daily basis.
summarizes the operating, financing, and investing activities of an entity.
is another name for the income statement.
is a special section of the income statement.
Question 4. 4. Each of the following are particularly interested in the statement of cash flows except
creditors.
employees.
shareholders.
government agencies.
Question 5. 5. Each of the following is an example of a significant noncash activity except
conversion of bonds into common stock.
exchanges of plant assets.
issuance of debt to purchase assets.
stock dividends.
Question 6. 6. In Garland Company, land decreased $140,000 because of a cash sale for $140,000, the equipment account increased $40,000 as a result of a cash purchase, and Bonds Payable increased $130,000 from issuance for cash at face value. The net cash provided by investing activities is
$140,000.
$230,000.
$100,000.
$110,000.
Question 7. 7. Indicate where the event purchased land and a building with a mortgage would appear, if at all, on the indirect statement of cash flows.
Operating activities section
Investing activities section
Financing activities section
Does not represent a cash flow
Question 8. 8. The statement of cash flows should help investors and creditors assess each of the following except the
entity’s ability to generate future income.
entity’s ability to pay dividends.
reasons for the difference between net income and net cash provided by operating activities.
cash investing and financing transactions during the period.
Question 9. 9. Generally, the most important category on the statement of cash flows is cash flows from
operating activities.
investing activities.
financing activities.
significant noncash activities.
Question 10. 10. The category that is generally considered to be the best measure of a company’s ability to continue as a going concern is
cash flows from operating activities.
cash flows from investing activities.
cash flows from financing activities.
usually different from year to year.
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