Calculating Net Cash Flow from Operating Activities (Indirect Method) Lincoln Company owns no plant assets and...

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Calculating Net Cash Flow from Operating Activities (Indirect Method) Lincoln Company owns no plant assets and reported the following income statement for the current year: Sales Cost of Goods Sold $470,000 $750,000 Wages Expense 110,000 Rent Expense 42,000 Insurance Expense 15,000 637,000 Net Income $113,000 Additional balance sheet information about the company follows: End of Year Beginning of Year Accounts Receivable $54,000 $49,000 Inventory 60,000 66,000 Prepaid Insurance 8,000 7,000 Accounts Payable 22,000 18,000 Wages Payable 9,000 11,000 Use the information to a. Calculate the net cash flow from operating activities under the indirect method. $ b. Compute Lincoln Company's operating cash flow to current liabilities (OCFCL) ratio. (Assume current liabilities consist of accounts payable and wages payable.) (Round your answer to two decimal places.) Classifying Cash Flow Statement Components and Determining Their Effects The following table presents selected items from a recent cash flow statement of Nordstrom, Inc. a. For each item, determine whether the amount would be disclosed in the cash flow statement under operating activities, investing activities, or financing activities. (Nordstrom uses the indirect method of reporting.) b. For each item, determine whether it will appear as a positive or negative in determining the net increase in cash and cash equivalents. NORDSTROM, INC. Consolidated Statement of Cash Flows-Selected Items 1 Decrease in accounts receivable 2 Capital expenditures 3 Proceeds from long-term borrowings 4 Increase in deferred income tax net liability 5 Principal payments on long-term borrowings 6 Increase in merchandise inventories 7 Increase in prepaid expenses and other assets 8 Proceeds from issuances under stock compensation plans 9 Increase in accounts payable 10 Net earnings 11 Payments for repurchase of common stock 12 Increase in accrued salaries, wages and related benefits 13 Cash dividends paid 14 Depreciation and amortization expenses b. = Calculating Net Cash Flow from Operating Activities (Indirect Method) Lincoln Company owns no plant assets and reported the following income statement for the current year: Sales Cost of Goods Sold $470,000 $750,000 Wages Expense 110,000 Rent Expense 42,000 Insurance Expense 15,000 637,000 Net Income $113,000 Additional balance sheet information about the company follows: End of Year Beginning of Year Accounts Receivable $54,000 $49,000 Inventory 60,000 66,000 Prepaid Insurance 8,000 7,000 Accounts Payable 22,000 18,000 Wages Payable 9,000 11,000 Use the information to a. Calculate the net cash flow from operating activities under the indirect method. $ b. Compute Lincoln Company's operating cash flow to current liabilities (OCFCL) ratio. (Assume current liabilities consist of accounts payable and wages payable.) (Round your answer to two decimal places.) Classifying Cash Flow Statement Components and Determining Their Effects The following table presents selected items from a recent cash flow statement of Nordstrom, Inc. a. For each item, determine whether the amount would be disclosed in the cash flow statement under operating activities, investing activities, or financing activities. (Nordstrom uses the indirect method of reporting.) b. For each item, determine whether it will appear as a positive or negative in determining the net increase in cash and cash equivalents. NORDSTROM, INC. Consolidated Statement of Cash Flows-Selected Items 1 Decrease in accounts receivable 2 Capital expenditures 3 Proceeds from long-term borrowings 4 Increase in deferred income tax net liability 5 Principal payments on long-term borrowings 6 Increase in merchandise inventories 7 Increase in prepaid expenses and other assets 8 Proceeds from issuances under stock compensation plans 9 Increase in accounts payable 10 Net earnings 11 Payments for repurchase of common stock 12 Increase in accrued salaries, wages and related benefits 13 Cash dividends paid 14 Depreciation and amortization expenses b. =

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To calculate the net cash flow from operating activities using the indirect method we start with the ... View the full answer