The purchase of equipment for cash would be classified as which type of activity on the statement of cash flows?
Explanation
Investing activities include making and collecting loans and acquiring and disposing of investments and property, plant, and equipment. Therefore, purchasing equipment for cash is a classic investing activity outflow.
Other questions
According to Chapter 12, which of the following is the primary purpose of the statement of cash flows?
The statement of cash flows classifies cash receipts and payments into which three activities?
Which of the following activities includes the cash effects of transactions that create revenues and expenses and enter into the determination of net income?
Payment of a cash dividend to stockholders is classified as which type of activity?
Which of the following is an example of a significant noncash investing and financing activity?
What are the two methods for converting net income from an accrual basis to a cash basis for the statement of cash flows?
Under the indirect method, which adjustment is made to net income to compute net cash provided by operating activities?
Computer Services Company had net income of $145,000 and depreciation expense of $9,000. It also had a loss on disposal of plant assets of $3,000. What is the subtotal after adjusting for these two noncash items?
During 2019, Computer Services Company's inventory increased by $5,000 and its accounts payable increased by $16,000. How are these changes treated when reconciling net income to net cash provided by operating activities?
Computer Services Company purchased a building for $120,000 cash and sold equipment with a book value of $7,000 for $4,000 cash. What is the net cash used by investing activities?
A company purchases a building for $120,000 cash and sells equipment for $4,000 cash. What is the net cash flow from investing activities?
Computer Services Company issued common stock for $20,000 cash and paid cash dividends of $29,000. What is the net cash flow from financing activities?
What is the formula for calculating Free Cash Flow?
If a company has net cash provided by operating activities of $100,000, capital expenditures of $30,000, and pays cash dividends of $10,000, what is its free cash flow?
Which of the following describes the first step in preparing a statement of cash flows?
Under the direct method, if sales revenue is $507,000 and accounts receivable decreased by $10,000, what are the cash receipts from customers?
Under the direct method, if cost of goods sold is $150,000, inventory increased by $5,000, and accounts payable increased by $16,000, what are the cash payments to suppliers?
Issuing bonds in exchange for land would be reported in the statement of cash flows in which section?
If a company uses the indirect method, a decrease in the Prepaid Expenses account would be:
Which statement is true regarding the direct and indirect methods of preparing the statement of cash flows?
If a company purchases its own stock (treasury stock) for cash, how is this transaction classified on the statement of cash flows?
What is the final step in preparing a statement of cash flows?
Josh’s PhotoPlus reported net income of $73,000 for 2019. It had depreciation expense of $7,000, a decrease in accounts payable of $3,800, and a decrease in accounts receivable of $4,000. What is the net cash provided by operating activities?
What information is NOT typically found in the Additional Information section for preparing a statement of cash flows?
In the direct method, which of the following is NOT a major class of operating cash receipts and payments?
If a company's free cash flow is negative, what might this indicate?
When preparing a statement of cash flows worksheet, how are decreases in current assets (like Accounts Receivable) entered in the reconciling columns?
Which of the following items from an income statement would NOT require an adjustment when converting net income to net cash provided by operating activities under the indirect method?
If a company uses the T-account approach to prepare a statement of cash flows, net income is posted as:
The collection of a loan from another company would be classified as what type of cash flow activity?
A company issues 100,000 shares of $1 par value common stock for $500,000 cash. This transaction would be reported as a:
If a company purchases land by issuing long-term bonds, where is this transaction reported on the statement of cash flows?
REYNOLDS COMPANY reported net income of $125,000 and depreciation expense of $33,000. It also sold land for $25,000 cash, which was its book value. What is the net cash provided by operating activities?
The T-account approach for preparing a statement of cash flows is based on which fundamental accounting concept?
If a company's free cash flow is $1,300, its cash dividends paid are $9,000, and its net cash provided by operating activities is $29,300, what were its capital expenditures?
The sale of land at a loss would be reported on the statement of cash flows (indirect method) in which way?
In the direct method, cash payments for operating expenses are calculated by starting with operating expenses and adjusting for changes in which accounts?
Which of the following is considered a cash equivalent?
How is restricted cash reported on the balance sheet?
On the statement of cash flows, cash receipts from interest and dividends are classified as:
A company purchases a building by making a down payment and signing a long-term mortgage note. How is this transaction reflected on the statement of cash flows?
If a company reports a net loss for the year, it is:
Using the direct method, cash payments for income taxes are calculated by adjusting income tax expense for the change in:
An increase in the Interest Payable account during a period means that:
Which section of the statement of cash flows is considered by most analysts to be the best measure of a company's ability to generate sufficient cash to continue as a going concern?
If a company sells equipment with a book value of $7,000 for $4,000 cash, the transaction results in a loss of $3,000. How are the components of this transaction reported on an indirect statement of cash flows?
When using the worksheet for preparing the indirect statement of cash flows, net income is entered in the reconciling columns as:
Which of the following is NOT one of the three sources of information needed to prepare a statement of cash flows?
The payment of interest to lenders is classified as what type of cash flow activity under U.S. GAAP?