Kimmel Financial Accounting Solutions Ch12

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CHAPTER 12

Statement of Cash Flows

Study Objectives

1.Indicate the usefulness of the statement of cash flows.
2.Distinguish among operating, investing, and financing activities. 3.Explain the impact of the product life cycle on a company’s cash flows. 4.Prepare a statement of cash flows using the indirect method. 5.Use the statement of cash flows to evaluate a company.

*6.Prepare a statement of cash flows using the direct method.

Summary of Questions by Study Objectives and Bloom’s Taxonomy

|Item | | 1. | | 1. | | 1. | | 1. | | 1. | | 1. |2 |C | 4|6* |AP| 7. | | | | |. | | | | | | | | | | | | |1A | |Distinguish among operating, investing, and financing | |Simple | |10–15 | | | |activities. | | | | | | | | | | | | | |2A | |Determine cash flow effects of changes in equity accounts. | |Simple | |10–15 | | | | | | | | | |3A | |Prepare the operating activities section—indirect method. | |Simple | |20–30 | | | | | | | | | |*4A | |Prepare the operating activities section—direct method. | |Simple | |20–30 | | | | | | | | | |5A | |Prepare the operating activities section—indirect method. | |Simple | |20–30 | | | | | | | | | |*6A | |Prepare the operating activities section—direct method. | |Simple | |20–30 | | | | | | | | | |7A | |Prepare a statement of cash flows—indirect method, and compute cash-based ratios. | |Moderate | |40–50...
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