1. What is the objective of the statement of cash flows? Make a list of two questions that this statement can answer. Explain.
2. What specific investments are reported on the cash flow statement? Explain.
3. What are the types of financing activities that are reported on the cash flow statement? Explain.
4. Explain the indirect method for reporting cash flows from operating activities.
5. Where is the payment of cash dividends reported on the statement of cash flows? Explain.
6. If a company buys land for $1,000,000, it will pay $400,000 in cash and borrow the rest with payable, long-term notes. What is the appropriate reporting structure for this transaction on a cash flow statement? Explain.
7. A company borrows $200,000 on June 3 by providing its bank with a 90-day, interest-bearing note. Where should this be reported on the cash flow statement? Explain.
8. Can a company show a net cash outflow from operating activities if they report positive net income for the year? Explain.
9. Can depreciation lead to cash flow? Explain.