Which of the following will be listed in the operating section of the statement of cash flows that is prepared using the indirect method?

• A.collections from customers
• B.payments to suppliers
• C.interest received
• D.increases/decreases in current liabilities

Investors who want to know the amount of cash a company has available for new opportunities, such as expanding into a new sales region, should analyze the company's ________.

• A.free cash flow
• B.net cash flow from investing activities
• C.acid ratio
• D.earnings per share

Planned investments and cash dividends are deducted from ________ to arrive at free cash flow.

• A.net cash provided by operating activities
• B.net cash provided by investing activities
• C.net cash provided by financing activities
• D.net income

For the year ending December 31, 2017, Rodgers Electric expects net cash provided by operations of $327,000, net cash used by investing activities of $135,000, and net cash provided by financing activities of $49,000. Rodgers plans to spend $254,000 to add a warehouse for its operations and pays $32,000 in cash dividends. What is the amount of free cash flow?

• A.$241,000
• B.$41,000

c. $73,000

d. $(62,000)

The only part that differs in a statement of cash flows prepared by the direct method from one prepared by the indirect method is the ________.

• A.financing activities section
• B.investing activities section
• C.operating activities section
• D.non-cash investing and financing activities section

Which of the following is considered an operating activity on the statement of cash flows prepared using the direct method?

• A.dividends paid to stockholders
• B.sale of merchandise inventory for cash
• C.payment to purchase equipment
• D.the receipt of cash from sale of equipment

Merchandise Inventory increased $28,300 and Accounts Payable decreased $19,600 during the year. Accounts Payable relates only to the acquisition of merchandise inventory. Sales were $795,900 and Cost of Goods Sold was $549,700. Compute the payment made to the suppliers.

• A.$578,000
• B.$569,300
• C.$597,600
• D.$47,900

Regarding the use of a spreadsheet for the preparation of the statement of cash flows, which of the following statements is incorrect?

• A.The spreadsheet starts with the beginning balance sheet and concludes with the ending balance sheet.
• B.When companies face complex situations, a spreadsheet can help in preparing the statement of cash flows.
• C.The spreadsheet cannot be used for the direct method.
• D.Accountants can prepare the statement of cash flows directly from the lower part of the spreadsheet.

Regarding the use of a spreadsheet for the preparation of the statement pf cash flows, which of the following statements is true?

• A.The T-account approach works well for all companies.
• B.The statement of cash flows cannot be prepared directly from the spreadsheet because additional information is needed.
• C.The spreadsheet is needed when companies face complex situations.
• D.The spreadsheet can only be used if the indirect method for operating activities is also used.

Ocean Auto Parts Company uses the direct method to prepare its statement of cash flows. Refer to the following information reported for 2017: 1. Sales Revenue, $516,000; 2. Accounts Receivable, beginning balance, $97,000; 3. Accounts Receivable, ending balance, $63,000. Compute the collections from customers.

• A.$550,000
• B.$453,000
• C.$160,000
• D.$356,000