Based on the given information from PA12-4 (pp.603-604) in your textbook, complete the following

Statement of Cash Flows using the Indirect Method

Notes: -place negative amounts or balances in parentheses/brackets. Example: (100)

-when entering the amounts or balances, omit or do not include the dollar sign and penny value

or decimal point

-use comma to separate numbers/amounts/balances greater than 999. Example: 1,850

  

Transcribed Image Text:

604 CHAPTER 12 Statement of Cash Flows LO 12-6 LO 12-3, 12-4, 12-5, 12-6 LO 12-S1 PA12-5 Computing Cash Flows from Operating Activities (Direct Method) Refer to the information in PA12-2. Required: Prepare the cash flows from operating activities section of the statement of cash flows using the direct method. PA12-6 Preparing and Interpreting a Statement of Cash Flows (Direct Method) Refer to PA12-4. Required: Complete requirements 1 and 2 using the direct method. PA12-7 (Supplement 12A) Preparing and Interpreting a Statement of Cash Flows with Loss on Disposal (Indirect Method) Assume the same facts as PA12-4, except for the income statement and additional data item (a). The new income statement is shown below. Instead of item (a) from PA12-4, assume that the company bought new equipment for $1,800 cash and sold existing equipment for $500 cash. The equipment that was sold had cost $1,300 and had Accumulated Depreciation of $250 at the time of sale. Income Statement Service Revenue Salaries and Wages Expense Depreciation Expense Loss on Disposal of Equipment Income Tax Expense Net Income $37,500 35,000 500 550 200 $ 1,250 Required: 1. Prepare the statement of cash flows for the year ended December 31 using the indirect method. 2. Use the statement of cash flows to evaluate the company's cash flows. 604 CHAPTER 12 Statement of Cash Flows LO 12-6 LO 12-3, 12-4, 12-5, 12-6 LO 12-S1 PA12-5 Computing Cash Flows from Operating Activities (Direct Method) Refer to the information in PA12-2. Required: Prepare the cash flows from operating activities section of the statement of cash flows using the direct method. PA12-6 Preparing and Interpreting a Statement of Cash Flows (Direct Method) Refer to PA12-4. Required: Complete requirements 1 and 2 using the direct method. PA12-7 (Supplement 12A) Preparing and Interpreting a Statement of Cash Flows with Loss on Disposal (Indirect Method) Assume the same facts as PA12-4, except for the income statement and additional data item (a). The new income statement is shown below. Instead of item (a) from PA12-4, assume that the company bought new equipment for $1,800 cash and sold existing equipment for $500 cash. The equipment that was sold had cost $1,300 and had Accumulated Depreciation of $250 at the time of sale. Income Statement Service Revenue Salaries and Wages Expense Depreciation Expense Loss on Disposal of Equipment Income Tax Expense Net Income $37,500 35,000 500 550 200 $ 1,250 Required: 1. Prepare the statement of cash flows for the year ended December 31 using the indirect method. 2. Use the statement of cash flows to evaluate the company's cash flows.