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Which of the following items is NOT reported on a cash flow statement?

Accounting

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3 parts
31

\mathbf{\65,000}$

32

\mathbf{\235,000}$

33

\mathbf{\8,000}$

Step-by-step solution

8 steps

Here are the solutions to the remaining questions:

Part 28

Proceeds from the issuance of Preferred Stock.

  • Issuing preferred stock is a transaction with owners (shareholders) to raise capital.
  • Positive

Part 29

The Gain on the Sale of Equipment formerly used in the business.

  • A gain on the sale of an asset is a non-cash item that increases net income but the cash from the sale is reported under investing activities. To convert net income to cash from operations, this gain must be subtracted.
  • Negative

Part 30

An increase in the long-term asset Investment in Another Company.

  • Purchasing an investment in another company is an investing activity that uses cash.
  • Negative

Part 31

\mathbf{\65,000}$

For a recent year a corporation's financial statements reported the following

Net income: \100,000Depreciationexpense: Depreciation expense:$10,000Increaseinaccountsreceivable: Increase in accounts receivable:$30,000Decreaseinaccountspayable: Decrease in accounts payable:$15,000$

Based on the above information, what amount will the corporation report as Net Cash Provided by Operating Activities on the cash flow statement?

  1. Start with Net Income.

    Net Income=$100,000\text{Net Income} = \$100,000

  2. Add back non-cash expenses.

    Depreciation expense is a non-cash expense, so it is added back. Add: Depreciation Expense=$10,000\text{Add: Depreciation Expense} = \$10,000

  3. Adjust for changes in current assets and liabilities.

    An increase in a current asset (Accounts Receivable) means cash was used or not collected, so it is subtracted. Subtract: Increase in Accounts Receivable=$30,000\text{Subtract: Increase in Accounts Receivable} = \$30,000 A decrease in a current liability (Accounts Payable) means cash was used to pay it off, so it is subtracted. Subtract: Decrease in Accounts Payable=$15,000\text{Subtract: Decrease in Accounts Payable} = \$15,000

  4. Calculate Net Cash Provided by Operating Activities.

    Net Cash Provided by Operating Activities=$100,000+$10,000−$30,000−$15,000\text{Net Cash Provided by Operating Activities} = \$100,000 + \$10,000 - \$30,000 - \$15,000 Net Cash Provided by Operating Activities=$65,000\text{Net Cash Provided by Operating Activities} = \$65,000 The corporation will report \boxed{\mathbf{\65,000}}$ as Net Cash Provided by Operating Activities.

Part 32

\mathbf{\235,000}$

A corporation reported the following information for the past year

Net income: \200,000Depreciationexpense: Depreciation expense:$30,000Gainonsaleoftruck: Gain on sale of truck:$5,000Proceedsfromsaleoftruck: Proceeds from sale of truck:$8,000Decreaseinaccountsreceivable: Decrease in accounts receivable:$10,000$

Assuming these are the only facts, what amount will the corporation report as the Net Cash Provided by Operating Activities on the cash flow statement?

  1. Start with Net Income.

    Net Income=$200,000\text{Net Income} = \$200,000

  2. Add back non-cash expenses and subtract non-cash gains.

    Depreciation expense is a non-cash expense, so it is added back. Add: Depreciation Expense=$30,000\text{Add: Depreciation Expense} = \$30,000 Gain on sale of truck is a non-cash gain included in net income, so it is subtracted. The actual cash from the sale is an investing activity. Subtract: Gain on Sale of Truck=$5,000\text{Subtract: Gain on Sale of Truck} = \$5,000

  3. Adjust for changes in current assets and liabilities.

    A decrease in a current asset (Accounts Receivable) means cash was collected, so it is added. Add: Decrease in Accounts Receivable=$10,000\text{Add: Decrease in Accounts Receivable} = \$10,000

  4. Calculate Net Cash Provided by Operating Activities.

    Net Cash Provided by Operating Activities=$200,000+$30,000−$5,000+$10,000\text{Net Cash Provided by Operating Activities} = \$200,000 + \$30,000 - \$5,000 + \$10,000 Net Cash Provided by Operating Activities=$235,000\text{Net Cash Provided by Operating Activities} = \$235,000 The corporation will report \boxed{\mathbf{\235,000}}$ as Net Cash Provided by Operating Activities.

Part 33

\mathbf{\8,000}$

Using the information in Question #32, what amount will be reported under Cash From Investing Activities?

Investing activities include the purchase and sale of long-term assets. From the given information: Proceeds from sale of truck=$8,000\text{Proceeds from sale of truck} = \$8,000 This is the only item related to investing activities.

Cash From Investing Activities=$8,000\text{Cash From Investing Activities} = \$8,000 The amount reported under Cash From Investing Activities will be \boxed{\mathbf{\8,000}}$.

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