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Harvard University - MGMT E-1000Quiz 5

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Module 5 Quiz 1) Which of the following items would NOT be shown on a statement of cash flows created using the indirect method? Net Income Net income is shown in the cash flow from Operating Acti... vities section under the indirect method. Retained Earnings This is the correct answer! Retained earnings is never shown on the statement of cash flows. Cash, beginning of year Beginning of year cash balance is shown at the top of a statement of cash flows. Cash, end of year End of year cash balance is shown at the bottom of a statement of cash flows. 2) General Dynamics (GD) is a manufacturer of naval equipment. Which of the following cash flows should be included in the Operating Section of GD's statement of cash flows under US GAAP? Drag the cash transaction to the appropriate column. Cash flow from operating activities NOT a cash flow from operating activities INTEREST EARNED IN CASH SALE PROCEEDS FROM EQUITY INVESTMENTS SALE OF INVENTORY CASH PAID TO BUY A NEW FACILITY CASH PAID FOR INTEREST CASH RECEIVED IN SALE OF EQUIPMENT PAYMENT TO SUPPLIERS CASH RECEIVED FROM LOAN MADE TO OTHERS REPURCHASES OF COMMON STOCK CASH DIVIDENDS PAID TO SHAREHOLDERS Correct3) Based on this income statement for Company E for the year ending December 31, 2014, what adjustment would need to be made to Net Income to account for Depreciation and Amortization in calculating cash flow from Operating Activities using the indirect method? [Show More]

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