Question

The following is a statement of cash flows for the Tombstone Company. Answer the questions about...

The following is a statement of cash flows for the Tombstone Company. Answer the questions about this financial statement that follow.

Tombstone Company
Statement of Cash Flows
For the Year Ended December 31, 2017
Cash flows from operating activities:
Net Income           34,682
Reconciliation items:
Increase in Accounts Receivable           (3,336)
Decrease in Merchandise Inventory           13,698
Increase in Accounts Payable           29,544
Decrease in Income Taxes Payable               (630)
Depreciation Expense           38,540
Loss on sale of plant assets           10,080
Gain on sale of investments         (11,698)
Net cash provided by operating activities       110,880
Cash flows from investing activities:
Cash received from sale of plant assets              2,520
Cash received from sale of long-term investments           12,298
Cash paid for purchase of plant assets         (92,758)
Net cash used in investing activities       (77,940)
Cash flows from financing activities:
Cash received from issuing stock           30,000
Cash paid for dividends         (40,320)
Cash paid to retire bonds payable         (20,700)
Net cash used in financing activities       (31,020)
Net increase in cash            1,920
Cash balance at prior year-end          27,648
Cash balance at current year-end          29,568

What method do the use to report operating cash flows? Fill in the blank with either direct method or indirect method.

Did they sell any plant assets for cash? Fill in the blank with either yes or no.

Did they purchase any plant assets for cash? Fill in the blank with yes or no.

Did they purchase any investments for cash? Fill in the blank with yes or no.

Did they sell any investments for cash? Fill in the blank with yes or no.

Did they pay any cash dividends? Fill in the blank with yes or no.

Did they issue any new stock for cash? Fill in the blank with yes or no.

Did they buy any treasury stock for cash? Fill in the blank with yes or no.

Did they pay off any bonds payable? Fill in the blank with yes or no.

Did they receive any cash to pay off a note receivable? Fill in the blank with yes or no.

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Answer #1

What method do the use to report operating cash flows? INDIRECT METHOD

Did they sell any plant assets for cash? YES

Did they purchase any plant assets for cash? YES

Did they purchase any investments for cash? NO

Did they sell any investments for cash? YES

Did they pay any cash dividends? YES

Did they issue any new stock for cash? YES

Did they buy any treasury stock for cash?   NO

Did they pay off any bonds payable? YES

Did they receive any cash to pay off a note receivable? NO

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