Question 1

Wisconsin Farm Equipment Company sold equipment for cash.The income statement shows a loss on the sale of $7000.The net book value of the asset was $28,900.Which of the following statements describes the cash effect of the transaction?

Accepted Answer

A)  positive cash flow of $35,900 from financing activities
B)  negative cash flow of $21,900 for operating activities
C)  negative cash flow of $21,900 for financing activities
D)  positive cash flow of $21,900 from investing activitiesE) C) and D)
F) B) and C)

Question 2

List and discuss three ways in which the statement of cash flows helps financial statement users.

Accepted Answer

1.Predict future cash flows-Past cash re...

Question 3

When preparing the statement of cash flows using the indirect method,a decrease in current liabilities is added to the net income to arrive at net cash provided by operating activities.

Accepted Answer

A) True 
 B)False

Exam 16: The Statement of Cash Flows

List and discuss three ways in which the statement of cash flows helps financial statement users.

Correct Answer
verified
1.Predict future cash flows-Past cash re...
View Answer

Wisconsin Farm Equipment Company sold equipment for cash.The income statement shows a loss on the sale of $7000.The net book value of the asset was $28,900.Which of the following statements describes the cash effect of the transaction?

Correct Answer
verified

When preparing the statement of cash flows using the indirect method,a decrease in current liabilities is added to the net income to arrive at net cash provided by operating activities.

Correct Answer
verified

Exam 16: The Statement of Cash Flows

List and discuss three ways in which the statement of cash flows helps financial statement users.

Correct Answerverified1.Predict future cash flows-Past cash re...View AnswerShow Answer

Wisconsin Farm Equipment Company sold equipment for cash.The income statement shows a loss on the sale of $7000.The net book value of the asset was $28,900.Which of the following statements describes the cash effect of the transaction?

Correct AnswerverifiedShow Answer

When preparing the statement of cash flows using the indirect method,a decrease in current liabilities is added to the net income to arrive at net cash provided by operating activities.

Correct AnswerverifiedShow Answer

Correct Answer
verified
1.Predict future cash flows-Past cash re...
View Answer

Correct Answer
verified

Correct Answer
verified