Chapter 10
The Statement of Cash Flow
507
Application Questions Group B
AP-1B (
1
)
Indicate which section each item in the table below would appear in a cash flow statement
using the indirect method. Also indicate whether the item would increase or decrease cash
using the indirect method.
Item
Section
Effect on Cash
Loss on sale of equipment
Decrease in accounts payable
Increase in inventory
Depreciation expense
Gain on sale of investments
Dividends paid
Issued shares in the company
Net income
Decrease in bank loan
Sold equipment
Decrease accounts receivable
AP-2B (
2
)
Bonus Company had the following amounts in its cash flow statement for the year ended
December 31, 2016.
Net decrease in cash from operating activities
$100,000
Net decrease in cash from investing activities
400,000
Net increase in cash from financing activities
350,000
Cash balance, January 1, 2016
600,000
Calculate the cash balance at December 31, 2016.
