Pacific, Inc.’s financial information includes the following, with “change” referring to the difference from the prior year (in $ millions):

Net Income	27
Change in Accounts Receivable	+4
Change in Accounts Payable	+1
Change in Inventory	+5
Loss on sale of equipment	-8
Gain on sale of real estate	+4
Change in Retained Earnings	+21
Dividends declared and paid	+4

Pacific, Inc.’s cash flow from operations (CFO) in millions was:

A) $27.

B) $15.

C) $23.

Eagle Company’s financial statements for the year ended December 31, 2005 were as follows (in $ millions):

Income Statement
Sales	150
Cost of Goods Sold	(48)
Wages Expense	(56)
Interest Expense	(12)
Depreciation	(22)
Gain on Sale of Equipment	6
Income Tax Expense	( 8)
Net Income	10

Balance Sheet
	12-31-04	12-31-05
Cash	32	52
Accounts Receivable	18	22
Inventory	46	44
Property, Plant & Equip. (net)	182	160
Total Assets	278	278
Accounts Payable	28	33
Long-term Debt	145	135
Common Stock	70	70
Retained Earnings	35	40
Total Liabilities & Equity	278	278

Cash flow from operations (CFO) for Eagle Company for the year ended December 31, 2005 was (in $ millions).

A) $41.

B) $37.

C) $29.

A) When recognizing a gain on the sale of fixed assets, the amount is a deduction to operating cash flows.

B) The indirect method requires an additional schedule to reconcile net income to cash flow.

C) In using the indirect method, each item on the income statement is converted to its cash equivalent.

[此贴子已经被作者于2010-4-19 13:24:19编辑过]

A company has the following changes in its balance sheet accounts:

Net Sales	$500
An increase in accounts receivable	20
A decrease in accounts payable	40
An increase in inventory	30
Sale of common stock	100
Repayment of debt	10
Depreciation	2
Net Income	100
Interest expense on debt	5

The company’s cash flow from financing is:

A) $100.

B) -$10.

C) $90.

Which of the following statements about accounting procedures and their impact on the statement of cash flows is least valid? All else equal:

A) the cash flow from operations (CFO) for a company that issues a bond at a premium will be understated compared to a firm that issues a bond at par.

B) a nonprofitable company that uses LIFO to account for inventory will have higher total cash flow than a nonprofitable company that uses FIFO during a period of rising prices.

C) a company that finances through common stock issues may have the same cash flow from financing (CFF) as a firm that issues debt.

The net income for Miller Bat Company was $3 million for the year ended December 31, 2004. Additional information is as follows:

• Depreciation on fixed assets $1,500,000

• Gain from cash sales of land 200,000

• Increase in accounts payable 300,000

• Dividends paid on preferred stock 400,000

The net cash provided by operating activities in the statement of cash flows for the year ended December 31, 2004 is:

A) $4,800,000.

B) $4,600,000.

C) $4,200,000.

Galaxy, Inc.’s balance sheet as of December 31, 2004 included the following information (in $):

	12-31-03	12-31-04
Accounts Payable	300,000	500,000
Dividends Payable	200,000	300,000
Common Stock	1,000,000	1,000,000
Retained Earnings	700,000	1,000,000

Galaxy’s net income in 2004 was $800,000. What was Galaxy’s cash flow from financing (CFF) in 2004?

A) -$300,000.

B) -$500,000.

C) -$400,000.

Determine the cash flow from investing given the following table:

Item	Amount
Cash payment of dividends	$30
Sale of equipment	$25
Net income	$25
Purchase of land	$15
Increase in accounts payable	$20
Sale of preferred stock	$25
Increase in deferred taxes	$5

A) $10.

B) -$5.

C) -$10.

Which of the following statements regarding depreciation expense in the cash flow statements is TRUE? Depreciation is added back to net income when determining CFO using:

A) either the direct or indirect methods.

B) the indirect method.

C) the direct method.

Juniper Corp. has the following transactions in 2005.

• Juniper’s equipment with a book value of $55,000 was sold for $85,000 cash.

• A parcel of land was purchased for $100,000 worth of Juniper common stock.

• ABC company paid Juniper preferred dividends of $40,000.

• Juniper declared and paid a $100,000 cash dividend.

Using the indirect method, what is cash flow from financing (CFF) for Juniper for 2005?

A) -$60,000.

B) -$15,000.

C) -$100,000.

Selected information from Rockway, Inc.’s U.S. GAAP financial statements for the year ended December 31, included the following (in $):

	2004	2005
Sales	17,000,000	21,000,000
Cost of Goods Sold	11,000,000	15,000,000
Interest Paid	800,000	1,000,000
Current Income Taxes Paid	700,000	1,000,000
Accounts Receivable	3,000,000	2,500,000
Inventory	2,400,000	3,000,000
Property, Plant & Equip.	2,000,000	16,000,000
Accounts Payable	1,000,000	1,400,000
Long-term Debt	8,000,000	9,000,000
Common Stock	4,000,000	5,000,000

Using the direct method, cash provided or used by operating activities(CFO) in the year 2005 was:

A) $6,300,000.

B) $5,300,000.

C) $4,300,000.

An analyst has gathered the following information about a company:

Note: the dividend payout ratio equals 20%.

What is the net increase or decrease in cash?

A) +$15.

B) -$15.

C) +$43.

An analyst has gathered the following information about a company:

Note: the dividend payout ratio equals 45%.

What is the net increase or decrease in cash?

A) +$20.

B) +$15.

C) -$15.

Which of the following statements about the indirect method of calculating the statement of cash flows is FALSE?

A) No adjustment is needed to account for extraordinary items because they are found above net income and are thus already accounted for.

B) No adjustment is needed to account for changes in accounts receivable since no cash was involved.

C) An adjustment is needed for the payment of deferred taxes.

Which of the following is TRUE about the consideration of depreciation in the operations section of a cash flow statement?

    Direct Method                               Indirect Method

A) Does not consider                      Considers

B) Does not consider                      Does not consider

C) Considers                                  Considers

An analyst has gathered the following information about a company:

Additional Information:
Dividends paid	$30
Common stock sold	20
Equipment purchased	50
Bonds issued	80
Fixed asset sold for (original cost of $100 with accumulated depreciation of $70)	60
Accounts receivable decreased by	30
Inventory decreased by	20
Accounts payable increased by	20
Wages payable decreased by	10

What is the cash flow from operations?

A) $170.

B) $156.

C) $135.

The Beeline Company has the following balance sheet and income statement.

Beeline Company Balance Sheet
As of December 31, 2004
	2003	2004			2003	2004
Cash	$50	$60		Accounts payable	$100	$150
Accounts receivable	100	110		Long-term debt	400	300
Inventory	200	180		Common stock	50	50
				Retained earnings	400	500
Fixed assets (gross)	800	900		Total liabilities and equity	$950	$1,000
Less: Accumulated depreciation	200	250
Fixed assets (net)	600	650
Total assets	$950	$1,000

The cash flow from operations for 2004 is:

A) $260.

B) $210.

C) $150.

John Stone, CFA, is an investment advisor specializing in the preparation of company and industry reports for high net worth customers at Learmon Brothers. Currently, Stone is preparing a report on Soft Corporation, a rapidly growing software company. The explosive growth of this company was financed primarily by an initial public offering in which 3,000,000 shares were issued at a price of $20 per share on June 27, 2004. Soft Corporation received additional capital when employee stock options for 1,000,000 shares at a price of $10 were exercised on January 1, 2005. Stone realizes the importance of cash flow on a company's financial health and would like to include a projected statement of cash flows for 2005. Soft Corporation financial statements are presented in Tables 1 and 2. Included are the projected statements for the year ending December 31, 2005.

Table 1 Soft Corporation Balance Sheets as of December 31(in millions)
		Actual 2004	Projected 2005
Cash		$24.0	$26.0
Accounts Receivable		17.0	24.0
Inventory		100.0	150.0
PP&E		100.0	125.0
Accumulated depreciation		(30.0)	(35.0)
	Total Assets	$211.0	$290.0
Accounts payable		$91.0	$101.0
Long-term debt		20.0	40.0
Common stock		80.0	90.0
Retained earnings		20.0	59.0
	Total liabilities and equity	$211.0	$290.0

Table 2 Soft Corporation Income Statement for Years Ended December 31 (in millions except per share data)
		Actual 2004	Projected 2005
Sales		$80.0	$198.0
COGS		(38.0)	(90.0)
	Gross profit	$42.0	$108.0
SG&A		(13.0)	(30.0)
Depreciation		(3.0)	(5.0)
	Operating expenses	$(16.0)	$(35.0)
Interest expense		$(4.0)	$(5.0)
Pretax Income		22.0	68.0
Income tax expense		(7.0)	(25.0)
Net income		$15.0	$43.0
EPS		$2.0	$4.3
Average shares outstanding (millions)		7.5	10.0
Dividends per share		$0.1	$0.4

Stone decides to use the direct method to compute Soft Corporation's projected operating cash collections. Using this method, which of the following is Soft Corporation's projected operating cash collections for the year ending December 31, 2005 (in millions)?

A) 191.0.

B) 198.0.

C) 1.0.

A) -130.0.

B) +90.0.

C) -80.0.

John Stone, CFA, is an investment advisor specializing in the preparation of company and industry reports for high net worth customers at Learmon Brothers. Currently, Stone is preparing a report on Soft Corporation, a rapidly growing software company. The explosive growth of this company was financed primarily by an initial public offering in which 3,000,000 shares were issued at a price of $20 per share on June 27, 2004. Soft Corporation received additional capital when employee stock options for 1,000,000 shares at a price of $10 were exercised on January 1, 2005. Stone realizes the importance of cash flow on a company's financial health and would like to include a projected statement of cash flows for 2005. Soft Corporation financial statements are presented in Tables 1 and 2. Included are the projected statements for the year ending December 31, 2005.

Table 1
Soft Corporation Balance Sheets
as of December 31
(in millions)
		Actual 2004	Projected 2005
Cash		$24.0	$26.0
Accounts Receivable		17.0	24.0
Inventory		100.0	150.0
PP&E		100.0	125.0
Accumulated depreciation		(30.0)	(35.0)
	Total Assets	$211.0	$290.0
Accounts payable		$91.0	$101.0
Long-term debt		20.0	40.0
Common stock		80.0	90.0
Retained earnings		20.0	59.0
	Total liabilities and equity	$211.0	$290.0

Table 2
Soft Corporation Income Statement
for Years Ended December 31
(in millions except per share data)
		Actual 2004	Projected 2005
Sales		$80.0	$198.0
COGS		(38.0)	(90.0)
	Gross profit	$42.0	$108.0
SG&A		(13.0)	(30.0)
Depreciation		(3.0)	(5.0)
	Operating expenses	$(16.0)	$(35.0)
Interest expense		$(4.0)	$(5.0)
Pretax Income		22.0	68.0
Income tax expense		(7.0)	(25.0)
Net income		$15.0	$43.0
EPS		$2.0	$4.3
Average shares outstanding (millions)		7.5	10.0
Dividends per share		$0.1	$0.4

Stone decides to use the direct method to compute Soft Corporation's projected net cash flow from financing activities. Under this method, what will Stone report Soft Corporation's projected net cash flow from financing activities to be for 2005 (in millions)?

A) 26.0.

B) 36.0.

C) 30.0.

A) $9,000,000.

B) $4,000,000.

C) $2,000,000.

An analyst has gathered the following information about a company:

Additional Information:
Dividends paid	30
Common stock sold	20
Equipment purchased	50
Bonds issued	80
Fixed asset sold for (original cost of $100 with accumulated depreciation of $70)	60
Accounts receivable decreased by	30
Inventory decreased by	20
Accounts payable increased by	20
Wages payable decreased by	10

What is the cash flow from investing?

A) $130.

B) $10.

C) $20.

An analyst contemplates using the indirect method to create the projected statement of cash flows. She decides to research the differences between the direct and indirect methods. Which of the following is least likely a component of the statement of cash flows under the direct method?

A) Payment of dividends.

B) Net income.

C) Property, Plant, & Equipment.

An analyst contemplates using the indirect methods to create the projected statement of cash flows. She decides to research the differences between the direct and indirect methods. Which of the following statements is most accurate? Under the:

A) direct method, depreciation must be added to cash collections because it is a non-cash expense.

B) indirect method, depreciation must be added to net income, because it is a non-cash expense.

C) indirect method, changes in accounts receivable are already included in the net income figure.

Determine the cash flow from operations given the following table.

Item	Amount
Cash payment of dividends	$30
Sale of equipment	$25
Net income	$25
Purchase of land	$15
Increase in accounts payable	$20
Sale of preferred stock	$25
Increase in deferred taxes	$5
Profit on sale of equipment	$15

A) $20.

B) $45.

C) $35.

Determine the cash flow from financing given the following table.

Item	Amount
Cash payment of dividends	$30
Sale of equipment	$10
Net income	$25
Purchase of land	$15
Increase in accounts payable	$20
Sale of preferred stock	$25
Increase in deferred taxes	$5
Profit on sale of equipment	$15

A) -$5.

B) $15.

C) $20.

A firm has net sales of $3,500, earnings after taxes (EAT) of $1,000, depreciation expense of $500, cost of goods sold (COGS) of $1,500, and cash taxes of $500. Also, inventory decreased by $100, and accounts receivable increased by $300. What is the firm's cash flow from operations?

A) $1,300.

B) $1,200.

C) $1,800.

An analyst has gathered the following information about a company:

Income Statement for the Year
Sales							$1,500
Expenses
	COGS					$1,300
	Depreciation					20
	Goodwill					10
	Int. Expenses					40
					Total expenses		1,370
Income from cont. op.							130
				Gain on sale			30
Income before tax							160
Income tax							64
Net Income							$96

Additional Information:
Dividends paid	$30
Common stock sold	20
Equipment purchased	50
Bonds issued	80
Fixed asset sold for (original cost of $100 with accumulated depreciation of $70)	60
Accounts receivable decreased by	30
Inventory decreased by	20
Accounts payable increased by	20
Wages payable decreased by	10

What is the cash flow from financing?

A) $110.

B) $70.

C) $130.

The Red Company’s balance sheet as of December 31, 2004 was as follows:

	Dec. 31, 2003	Dec. 31, 2004
Cash	$1,500,000	$1,900,000
Accounts Receivable	3,000,000	3,400,000
Inventory	2,300,000	2,500,000
Property, Plant & Equipment	16,700,000	19,700,000
Less Accumulated Depreciation	(5,300,000)	(8,200,000)
Total Assets	$18,200,000	$19,300,000
Accounts Payable	$2,100,000	$1,900,000
Interest Payable	800,000	1,200,000
Income Taxes Payable	1,000,000	800,000
Notes Payable	2,700,000	2,900,000
Deferred Income Taxes	2,600,000	2,900,000
Common Stock	1,000,000	1,000,000
Retained Earnings	8,000,000	8,600,000
	$18,200,000	$19,300,000

Red’s interest expense was $900,000 and income tax expense was $1,000,000 in 2004. Red prepares its Statements of Cash Flows using the direct method.

The other cash outflows section of Cash Flow from Operations (CFO) for 2004 would total:

A) $2,100,000.

B) $1,400,000.

C) $1,700,000.

Financial information for Jefferson Corp. for the year ended December 31^st, was as follows:

Based upon this data and using the direct method, what was Jefferson Corp.’s cash flow from operations (CFO) for the year ended December 31^st?

A) $1,200,000.

B) $800,000.

C) $900,000.

Capital Corp.’s activities in the year 2005 included the following:

• At the beginning of the year, Capital purchased a cargo plane from Aviation Partners for $10 million in a transaction consisting of $2 million cash, $3 million in Capital Corp. bonds and $5 million in Capital Corp. preferred stock.

• Interest of $150,000 was paid on the bonds, and dividends of $250,000 were paid on the preferred stock.

• At the end of the year, the cargo plane was sold for $12,000,000 cash to Standard Company. Proceeds from the sale were used to pay off the $3 million in bonds held by Aviation Partners.

On Capital Corp.’s Statement of Cash Flow for the year ended December 31, 2005, cash flow from investments (CFI) related to the above activities is:

A) $6,750,000.

B) $10,000,000.

C) $9,750,000.

Favor, Inc.’s capital and related transactions during 2005 were as follows:

• On January 1, $1,000,000 of 5-year 10% annual interest bonds were issued to Cover Industries in exchange for old equipment owned by Cover.
• On June 30, $50,000 of interest was paid to Cover
• On July 1, the bonds were returned to Favor in exchange for $1,500,000 par value 6% preferred stock.
• On December 31, preferred stock dividends of $45,000 were paid to Cover.

Favor, Inc.’s cash flow from financing (CFF) for 2005 (assume U.S. GAAP) is:

A) -$95,000.

B) -$1,045,000.

C) -$45,000.

Mark Industries' income statement and related notes for the year ended December 31 are as follows (in $):

Sales	42,000,000
Cost of Goods Sold	(32,000,000)
Wages Expense	(1,500,000)
Depreciation Expense	(2,500,000)
Interest Expense	(1,000,000)
Income Tax Expense	(2,000,000)
Net Income	3,000,000

During the year:

• Wages Payable increased $100,000.
• Accumulated Depreciation increased $2,500,000.
• Interest Payable decreased $200,000.
• Income Taxes Payable increased $500,000.
• Dividends of $100,000 were declared and paid.

Mark Industries’ cash flow from operations (CFO) for the year ended December 31 was:

A) $4,800,000.

B) $5,900,000.

C) $4,400,000.

What is the impact on accounts receivable if sales exceed cash collections and what is the impact on accounts payable if cash paid to suppliers exceeds purchases?

A) Both accounts payable and accounts receivable will increase.

B) Only accounts receivable will increase.

C) Only accounts payable will increase.

Murray Company reported the following revenues and expenses for the year ended 2007:

Following are the related balance sheet accounts:

Calculate cash collections and cash expenses.

A) $202,400 $119,900

B) $202,400 $58,100

C) $197,600 $119,900

Maverick Company reported the following financial information for 2007:

	in millions
Beginning accounts receivable	$180
Ending accounts receivable	225
Sales	11,000
Beginning inventory	2,000
Ending inventory	2,300
Purchases	8,100
Beginning accounts payable	1,600
Ending accounts payable	1,200

Calculate Maverick’s cost of goods sold and cash paid to suppliers for 2007.

A) $7,800 million $8,500 million

B) $7,800 million $7,100 million

C) $3,800 million $8,500 million

Darth Corporation’s most recent income statement shows net sales of $6,000, and Darth’s marginal tax rate is 40%. The total expenses reported were $3,200, all of which were paid in cash. In addition, depreciation expense was reported at $800. A further examination of the most recent balance sheets reveals that accounts receivable during that period increased by $1,000. The cash flow from operating activities reported by Darth should be:

A) $1,200.

B) $1,000.

C) $2,200.

Use the following financial data for Moose Printing Corporation to calculate the cash flow from operations (CFO) using the indirect method.

• Net income: $225

• Increase in accounts receivable: $55

• Decrease in inventory: $33

• Depreciation: $65

• Decrease in accounts payable: $25

• Increase in wages payable: $15

• Decrease in deferred taxes: $10

• Purchase of new equipment: $65

• Dividends paid: $75

A) Increase in cash of $173.

B) Increase in cash of $248.

C) Increase in cash of $183.

Use the following information to calculate cash flows from operations using the indirect method.

• Net Income: $12,000

• Depreciation Expense: $1,000

• Loss on sale of machinery: $500

• Increase in Accounts Receivable: $2,000

• Decrease in Accounts Payable: $1,500

• Increase in Income taxes payable: $500

• Repayment of Bonds: $3,000

A) Increase in cash of $7,500.

B) Increase in cash of $9,500.

C) Increase in cash of $10,500.

An analyst compiled the following information for Universe, Inc. for the year ended December 31, 20X4:

• Net income was $850,000.
• Depreciation expense was $200,000.
• Interest paid was $100,000.
• Income taxes paid were $50,000.
• Common stock was sold for $100,000.
• Preferred stock (eight percent annual dividend) was sold at par value of $125,000.
• Common stock dividends of $25,000 were paid.
• Preferred stock dividends of $10,000 were paid.
• Equipment with a book value of $50,000 was sold for $100,000.

Using the indirect method and assuming U.S. GAAP, what was Universe Inc.’s cash flow from operations (CFO) for the year ended December 31, 20X4?

A) $1,050,000.

B) $1,015,000.

C) $1,000,000.

When using the indirect method for computing cash flow from operating activities, a change in accounts payable will require which of the following?

A) A negative (positive) adjustment to net income when accounts payable increases (decreases).

B) A negative adjustment to net income regardless of whether accounts payable increases or decreases.

C) A positive (negative) adjustment to net income when accounts payable increases (decreases).

Given the following information, what is the adjustment to net income when calculating cash flow from operations using the indirect method?

• Increase in accounts payable of $25.
• Sold one share of stock for $15.
• Paid dividends of $10 to shareholders.
• Depreciation expense of $100.
• Increase in inventory of $20.

A) +$105.

B) -$50.

C) -$95.