Mod 17 Wrong Answers Flashcards
Direct method operating activities: interest received
What item is used on the income statement and what change in accounts on the balance sheet are used to calculate this?
Income statement: interest revenue
BS: interest receivable
Direct method operating activities: cash collected from customers
What item is used on the income statement and what change in accounts on the balance sheet are used to calculate this?
Income statement: sales
BS: A/R gross
Direct method operating activities: dividends received
What item is used on the income statement and what change in accounts on the balance sheet are used to calculate this?
Income statement: dividend revenue
BS: dividend receivable
Direct method operating activities: cash paid to suppliers
What item is used on the income statement and what change in accounts on the balance sheet are used to calculate this?
Income statement: COGS
BS: inventory and accounts payable
Direct method operating activities: cash paid to employees
What item is used on the income statement and what change in accounts on the balance sheet are used to calculate this?
Income statement: salaries and wage exp.
BS: salaries and wages payable
Direct method operating activities: interest paid
What item is used on the income statement and what change in accounts on the balance sheet are used to calculate this?
Income statement: interest exp.
BS: interest payable, premium on B/P, discount on B/P
Direct method operating activities: income taxes paid
What item is used on the income statement and what change in accounts on the balance sheet are used to calculate this?
Income statement: income tax expense
BS: income taxes payable, deferred tax liability, deferred tax asset
Direct method operating activities: other cash paid
What item is used on the income statement and what change in accounts on the balance sheet are used to calculate this?
Income statement: supplies exp., rent expense
BS: supplies, prepaid rent
Under the indirect method in the operating activities section, what 6 items are added back into net income?
1 decrease in current assets 2 increase in current liabilities 3 depreciation 4 amortization of intangible assets 5 bond discount amortization 6 losses
Under the indirect method of operating activities section, what 4 items are subtracted from net income?
1 increase in current assets
2 decrease in current liabilities
3 bond premium amortization
4 gains
When a current years premium for on bonds payable is amortized for $79,000 in the current year, what happens on the statement of cashflows if the related premium is redeemed for $75,000 in the current year?
Amortization of premium bonds is reduced to $4,000
Where does decrease in income taxes payable go on the statement of cashflows?
Operating activities
Where does increase in deferred taxes payable go on the statement of cashflows?
Operating activities
Where does sale of equipment go on the statement of cashflows?
Investing activities
Where does purchase of equipment go on the statement of cashflows?
Investing activities
Where does redeem bonds go on the statement of cashflows?
Financing activities
Where does issue of common stock go on the statement of cashflows?
Financing activities
Where does payment of dividends go on the statement of cashflows?
Financing activities
What are the last 3 line items on the statement of cash flows, if there has been a net decrease in cash?
Net decrease in cash
Cash at beginning of year
Cash at end of year
What is the subtotal account called at the end of each section on the statement of cashflows?
Net cash flow from operating activities
Net cash flow from investing activities
Net cash flow from financing activities
What section on the statement of cashflows would payment of interest on long term note payable go?
Operating activities
What is the journal entry to record income tax expense, when a deferred tax liability has increased for the year?
Income tax expense. Xxx
Deferred tax liability. Xxx
Taxes payable. Xxx
Interest paid on bonds calculation?
Interest paid on bonds = Face amount x coupon rate
Journal entry for redemption of bonds payable with an unamortized premium and a gain on extinguishment?
Bonds payable. Xxx
Unamortized premium on bonds. Xxx
Gain on extinguishment of bonds. Xxx
Cash. Xxx
Extinguishment of bonds relates to…
Redeemed bonds
Cash from issuance of common stock = ?
Cash from issuance of common stock = common stock + PiC
Which accounts need to be looked at for cash dividends being paid?
Dividends payable and retained earnings
What is the journal entry to determine a cash inflow from the sale of equipment, when there is a loss on sale of equipment?
Cash. Xxx
Accumulated depreciation. Xxx
Loss on sale of equipment. Xxx
Property plant and equip. Xxx
Statement of Cashflows using the indirect method memorize
Statement of cash flows
For the Year ended December 31, 200X
Operating activities: Net income Adjustments to Reconcile Net Income to Cashflows from Operating Activities: Depreciation Expenses Change in Accounts Payable Change in Accounts Receivable Change in Inventory Change in Interest Payable Net Cash Provided or Used from operating activities
Investing Activities: Sale of Equipment Purchase of Equipment Sale of Land Purchase Held to maturity securities Net Cash Provided or Used from Investing Activities
Financing Activities: Dividends Paid Retirement of Mortgage Payable Redeem Bonds Issue Common Stock Borrow on LT note payable Purchase Treasury Stock Net Cash Provided of Used from Financing Activities
Change in Cash
Cash, December 31, 20X1
Cash, December 31, 20X2
On the statement of cashflows for equipment transactions, companies are required to report…
Gross amounts instead of net amounts
What are the 5 major categories in the operating activities section using the direct method?
And the name for the subtotal column?
Cash collected from customers Cash paid to employees Cash paid to suppliers Cash paid for interest Cash paid for income taxes
Cash provided from operating activities
