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EB 1.

LO 16.1Provide journal entries to record each of the following transactions. For each, identify whether the transaction represents a source of cash (S), a use of cash (U), or neither (N).

  1. Paid $22,000 cash on bonds payable.
  2. Collected $12,600 cash for a note receivable.
  3. Declared a dividend to shareholders for $16,000, to be paid in the future.
  4. Paid $26,500 to suppliers for purchases on account.
  5. Purchased treasury stock for $18,000 cash.
EB 2.

LO 16.2In which section of the statement of cash flows would each of the following transactions be included? For each, identify the appropriate section of the statement of cash flows as operating (O), investing (I), financing (F), or none (N). (Note: some transactions might involve two sections.)

  1. collected accounts receivable from customers
  2. issued common stock for cash
  3. declared and paid dividends
  4. paid accounts payable balance
  5. sold a long-term asset for the same amount as purchased
EB 3.

LO 16.2In which section of the statement of cash flows would each of the following transactions be included? For each, identify the appropriate section of the statement of cash flows as operating (O), investing (I), financing (F), or none (N). (Note: some transactions might involve two sections.)

  1. purchased stock in Xerox Corporation
  2. purchased office supplies
  3. issued common stock
  4. sold plant assets for cash
  5. sold equipment for cash
EB 4.

LO 16.3Use the following information from Hamlin Company’s financial statements to determine operating net cash flows (indirect method).

Net income $113,750. Change in accumulated depreciation (no sale of depreciable assets this year) 9,800. Gain on sale of investments 11,400.
EB 5.

LO 16.3What adjustment(s) should be made to reconcile net income to net cash flows from operating activities (indirect method) considering the following balances in current assets?

Accounts payable, beginning of year $18,000. Accounts payable, end of year 28,000. Salaries payable, beginning of year 6,000. Salaries payable, end of year 4,000.
EB 6.

LO 16.3Use the following excerpts from Indigo Company’s balance sheets to determine net cash flows from operating activities (indirect method), assuming net income for 2018 of $225,000.

Accounts Receivable, Prepaid Insurance, Accounts Payable, Accrued Liabilities December 31, 2018, respectively: $33,000, 17,000, 19,000, 11,700. Accounts Receivable, Prepaid Insurance, Accounts Payable, Accrued Liabilities December 31, 2017, respectively: $31,500, 18,000, 19,500, 11,000.
EB 7.

LO 16.3Use the following information from Jumper Company’s financial statements to determine operating net cash flows (indirect method).

Income Statement items: Sales $111,000. Cost of Goods Sold (73,000). Salaries Expense (12,000). Depreciation Expense (8,000). Net Income 18,000. Balance Sheet items: Accounts Receivable decrease $3,500. Merchandise Inventory increase 2,200. Salaries Payable increase 925.
EB 8.

LO 16.3Use the following information from Kentucky Company’s financial statements to determine operating net cash flows (indirect method).

Net income $176,000. Depreciation expense 18,750. Gain on sale of plant assets 15,000. Increase in accounts receivable 12,000. Decrease in accounts payable 5,500.
EB 9.

LO 16.3Use the following excerpts from Leopard Company’s financial records to determine net cash flows from investing activities.

Collected payments on a customer note receivable $27,500. Purchased plant assets 19,000. Received dividend income from stocks owned 2,500.
EB 10.

LO 16.3Use the following information from Manuscript Company’s financial records to determine net cash flows from financing activities.

Repaid principal on bank loan $16,500. Issued common stock, at par value 32,000. Declared dividends, to be paid to shareholders next year 9,000.
EB 11.

LO 16.3Use the following excerpts from Nutmeg Company’s financial records to determine net cash flows from operating activities and net cash flows from investing activities.

Net income this year $83,700. Purchased land this year 20,000. Sold investments this year 31,500. Original cost of investments that were sold 33,000.
EB 12.

LO 16.4Provide the missing piece of information for the following statement of cash flows puzzle.

Cash flows from operating activities $75,000. Cash flows from investing activities 13,300. Cash flows from financing activities (33,000). Cash at the beginning of the year ?. Cash at the end of the year 65,000.
EB 13.

LO 16.4Provide the missing piece of information for the following statement of cash flows puzzle.

Cash flows from operating activities $88,000. Cash flows from investing activities ?. Cash flows from financing activities (45,000). Cash at the beginning of the year 77,000. Cash at the end of the year 113,000.
EB 14.

LO 16.5Use the following excerpts from Indira Company’s Statement of Cash Flows and other financial records to determine the company’s free cash flow.

Statement of cash flows: Cash flow from operating activities $98,700; cash flows from investing activities 125,000; cash flows from financing activities (16,500). From other records: Cash capital expenditures 40,000 and cash dividends paid 12,000.
EB 15.

LO 16.5Use the following excerpts from Bolognese Company’s statement of cash flows and other financial records to determine the company’s free cash flow for 2018 and 2017.

Cash flows from operating activities, cash flows from investing activities, cash flows from financing activities 2018, respectively: $121,000, (56,000), (12,000). Cash flows from operating activities, cash flows from investing activities, cash flows from financing activities 2017, respectively: $114,000, (40,000), (15,000). Capital expenditures were 40% of investing activities, both years. Cash dividends paid were $20,000, both years.
EB 16.

LO 16.5The following shows excerpts from Camole Company’s statement of cash flows and other financial records.

From statement of cash flows: Cash flows from operating activities 225,000. Cash flows from investing activities (75,000). Cash flows from financing activities 61,500. From other records: Capital expenditure costs 144,000. Cash dividends payments 36,000. Sales revenues 642,000. Total assets 450,000.

Compute the following for the company:

  1. free cash flow
  2. cash flows to sales ratio
  3. cash flows to assets ratio
EB 17.

LO 16.6Use the following excerpts from Brownstone Company’s financial statements to determine cash received from customers in 2018.

From Balance Sheet on December 31, 2018: Accounts Receivable $25,000. December 31, 2017: Accounts Receivable $20,000. From Income Statement of 2018: Sales 220,000.
EB 18.

LO 16.6Use the following excerpts from Jasper Company’s financial statements to determine cash paid to suppliers for inventory in 2018.

From Balance Sheet on December 31, 2018: Inventory $35,000; Accounts Payable 22,000. December 31, 2017: Inventory 31,000; Accounts Payable 20,500. From Income Statement of 2018: Cost of Goods Sold 175,900.
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