60.1K

Verified Solution

Link Copied!

TRUE/FALSE Cash outflows from financing activities include the payment of cash dividends, the acquisition of treasury stock, and the repayment of amounts borrowed The acquisition of land in exchange for common stock is an example of a noncash investing and financing activity. 2. In preparing the cash flows from operating activities section using the indirect method, a decrease in inventories from the beginning of the periocd to the end of the period is added to net income. 3. Rarely would the cash flows from operating activities, as reported on the statement of cash flows, be the same as net income reported on the income Free cash flow is cash flow from operations, plus cash used to purchase property, plant, and equipment to maintain current operations There are two alternatives to reporting cash flows from operating activities in the statement of cash flows: 1) the direct method; and, 2) the indirect method Cash flows from investing activities, as a part of the statement of cash flows, include receipts from the issuance of bonds payable. 7. To arrive at cash flows from operating activities, it is necessary to convert the income statement from an accrual basis to the cash basis of accounting. The declaration and issuance of a stock dividend is reported in the cash flows from financing activities section of the statement of cash flows. 10. Repayments of bonds is shown as a cash outflow in the cash flows from investing activities section of the statement of cash flows. Cash paid to acquire treasury stock should be shown on the statement of cash flows as an investing activity

Answer & Explanation Solved by verified expert

See Answer