As consultants in advisory services at an accounting firm, we are hired by management of Gadberry...

 

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As consultants in advisory services at an accounting firm, we are hired by management of Gadberry to advise on cash flow reporting, Management is concerned about the relatively small net increase in cash, and how the company is doing compared to competitors Nessly and Tootsey. The following Tableau Dashboard will assist in our analysis. $50,000 $40,000 $30,000 $20,000 Cash Outflows Cash inflows $10,000 5 SO $10,000) $(20,000) $(30,000) $(40,000) $/50.000) Cash Flows for Competing Companies Nessly Gadberry Gadberry Nessly Tootsey Tootsey Operating Act Investing Acti Financing Act Net Income (Loss) for Competing Companies $(40,009130,008120,006110,000) $0 $10,000$20,000$30,000$40,000 Net Loss Net Income 1. Management wants to know how the reported net cash provided by operating activities will differ under the direct method and indirect method. Which of the following is an accurate explanation? 2. During the year, Gadberry acquired a new building by issuing a note. Where on the statement of cash flows is this transaction reported? 3. Management is wondering how Nessly, which nearly went out of business this year, has a higher total net increase in cash than Gadberry. Further, Gadberry management claims that it had a great year and is expanding. Which of the following would explain Nessly's higher increase in cash? 4. Gadberry management is wondering how Tootsey, which just opened for business this year, has a higher total net increase in cash than Gadberry. Gadberry management claims that it had a great year and is expanding. Which of the following would explain Tootsey's higher increase in cash? 1. Which of the following is an accurate explanation? 2. Where on the statement of cash flows is this transaction reported? 3. Which of the following would explain Nessly's higher increase in cash? Which of the following would explain Tootsey's higher increase in cash? As consultants in advisory services at an accounting firm, we are hired by management of Gadberry to advise on cash flow reporting, Management is concerned about the relatively small net increase in cash, and how the company is doing compared to competitors Nessly and Tootsey. The following Tableau Dashboard will assist in our analysis. $50,000 $40,000 $30,000 $20,000 Cash Outflows Cash inflows $10,000 5 SO $10,000) $(20,000) $(30,000) $(40,000) $/50.000) Cash Flows for Competing Companies Nessly Gadberry Gadberry Nessly Tootsey Tootsey Operating Act Investing Acti Financing Act Net Income (Loss) for Competing Companies $(40,009130,008120,006110,000) $0 $10,000$20,000$30,000$40,000 Net Loss Net Income 1. Management wants to know how the reported net cash provided by operating activities will differ under the direct method and indirect method. Which of the following is an accurate explanation? 2. During the year, Gadberry acquired a new building by issuing a note. Where on the statement of cash flows is this transaction reported? 3. Management is wondering how Nessly, which nearly went out of business this year, has a higher total net increase in cash than Gadberry. Further, Gadberry management claims that it had a great year and is expanding. Which of the following would explain Nessly's higher increase in cash? 4. Gadberry management is wondering how Tootsey, which just opened for business this year, has a higher total net increase in cash than Gadberry. Gadberry management claims that it had a great year and is expanding. Which of the following would explain Tootsey's higher increase in cash? 1. Which of the following is an accurate explanation? 2. Where on the statement of cash flows is this transaction reported? 3. Which of the following would explain Nessly's higher increase in cash? Which of the following would explain Tootsey's higher increase in cash?

Answer rating: 100% (QA)

SOLUTION 1 The difference between the direct method and the indirect method of reporting net cash provided by operating activities lies in how the operating cash flows are calculated Under the direct ... View the full answer