eBook Cash Flows from Operating Activities-Indirect Method The net income reported on the income statement for...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
eBook Cash Flows from Operating Activities-Indirect Method The net income reported on the income statement for the current year was $116,100. Depreciation recorded on store equipment for the year amounted to $19,200. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year $45,400 $41,770 32,550 30,870 44,450 46,990 4,990 3,970 42,540 39,510 23,240 25,810 Show Me How Cash Accounts receivable (net) Merchandise inventory Prepaid expenses Accounts payable (merchandise creditors). Wages payable a. Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments. Statement of Cash Flows (partial) Cash flows from operating activities: Adjustments to reconcile net income to net cash flow from operating activities: Changes in current operating assets and liabilities: a. Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments. Statement of Cash Flows (partial) Cash flows from operating activities: Adjustments to reconcile net income to net cash flow from operating activities: Changes in current operating assets and liabilities: Net cash flow from operating activities 0 0 00000 b. Cash flows from operating activities differs from net income because it does not use the are recorded on the income statement when of accounting. For example revenues Reporting Issuance and Retirement of Long-Term Debt On the basis of the details of the following bonds payable and related discount accounts, indicate the items to be reported in the Financing Activities section of the statement of cash flows, assuming no gain or loss on retiring the bonds: ACCOUNT Bonds Payable Date Jan. June 1 2 30 Jan. Date: ACCOUNT Discount on Bonds Payable 1 Item 2 June 30 Dec. 31 Balance Retire bonds Issue bonds i Item Balance Retire bonds Issue bonds. Amortize discount Debit 150,000 Debit 30,000 Credit 450,000 Credit 12,000 2,625 ACCOUNT NO. Debit Balance Credit 750,000 600,000 1,050,000 ACCOUNT NO. Debit 33,750 21,750 51,750 49,125 Balance Credit Date Jan. 1 2 June 30 Date ACCOUNT Discount on Bonds Payable Jan. 1 2 June 30 Dec. 31 Item Retire bonds Issue bonds Item Balance Retire bonds Issue bonds Check My Work Amortization of discount Item Balance Retire bonds Issue bonds Amortize discount Debit 150,000 Debit 30,000 Credit 450,000 Credit 12,000 2,625 Debit Debit Section of Statement of Cash Flows Credit ACCOUNT NO. 33,750 21,750 51,750 49,125 750,000 600,000 1,050,000 Balance Credit Added or Deducted. Amount = 8 Previous Next > eBook Cash Flows from Operating Activities-Indirect Method The net income reported on the income statement for the current year was $116,100. Depreciation recorded on store equipment for the year amounted to $19,200. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year $45,400 $41,770 32,550 30,870 44,450 46,990 4,990 3,970 42,540 39,510 23,240 25,810 Show Me How Cash Accounts receivable (net) Merchandise inventory Prepaid expenses Accounts payable (merchandise creditors). Wages payable a. Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments. Statement of Cash Flows (partial) Cash flows from operating activities: Adjustments to reconcile net income to net cash flow from operating activities: Changes in current operating assets and liabilities: a. Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments. Statement of Cash Flows (partial) Cash flows from operating activities: Adjustments to reconcile net income to net cash flow from operating activities: Changes in current operating assets and liabilities: Net cash flow from operating activities 0 0 00000 b. Cash flows from operating activities differs from net income because it does not use the are recorded on the income statement when of accounting. For example revenues Reporting Issuance and Retirement of Long-Term Debt On the basis of the details of the following bonds payable and related discount accounts, indicate the items to be reported in the Financing Activities section of the statement of cash flows, assuming no gain or loss on retiring the bonds: ACCOUNT Bonds Payable Date Jan. June 1 2 30 Jan. Date: ACCOUNT Discount on Bonds Payable 1 Item 2 June 30 Dec. 31 Balance Retire bonds Issue bonds i Item Balance Retire bonds Issue bonds. Amortize discount Debit 150,000 Debit 30,000 Credit 450,000 Credit 12,000 2,625 ACCOUNT NO. Debit Balance Credit 750,000 600,000 1,050,000 ACCOUNT NO. Debit 33,750 21,750 51,750 49,125 Balance Credit Date Jan. 1 2 June 30 Date ACCOUNT Discount on Bonds Payable Jan. 1 2 June 30 Dec. 31 Item Retire bonds Issue bonds Item Balance Retire bonds Issue bonds Check My Work Amortization of discount Item Balance Retire bonds Issue bonds Amortize discount Debit 150,000 Debit 30,000 Credit 450,000 Credit 12,000 2,625 Debit Debit Section of Statement of Cash Flows Credit ACCOUNT NO. 33,750 21,750 51,750 49,125 750,000 600,000 1,050,000 Balance Credit Added or Deducted. Amount = 8 Previous Next >
Expert Answer:
Answer rating: 100% (QA)
From the provided screenshots you want to prepare the Cash Flows from Operating Activities section using the indirect method based on the given accoun... View the full answer
Related Book For
Posted Date:
Students also viewed these accounting questions
-
The net income reported on the income statement for the current year was $720,000. Depreciation recorded on store equipment for the year amounted to $32,700. Balances of the current asset and current...
-
The net income reported on the income statement for the current year was $93,700. Depreciation recorded on store equipment for the year amounted to $31,200. Balances of the current asset and current...
-
Read the case study "Southwest Airlines," found in Part 2 of your textbook. Review the "Guide to Case Analysis" found on pp. CA1 - CA11 of your textbook. (This guide follows the last case in the...
-
The following data are for four independent process-costing departments. Inputs are added uniformly. Required: Compute the equivalent units of production for each of the preceding departments using...
-
Loco Leasing and Manufacturing Company uses leases as a means of financing sales of its equipment. Loco leased a machine to Potomac Construction for $15,000 per year, payable in advance, for a...
-
Determine if the two triangles are congruent. If they are, state how you know.
-
Water flows over a flat surface at \(4 \mathrm{ft} / \mathrm{s}\), as shown in Fig. P6.42. A pump draws off water through a narrow slit at a volume rate of \(0.1 \mathrm{ft}^{3} / \mathrm{s}\) per...
-
The notes to the Giving Charities financial statements reported the following data on December 31, Year 1 (end of the fiscal year): Giving Charities amortizes bonds by the effective-interest method...
-
Calculate C in the units of d 2 /AU 3 for each orbital body listed in this table. Use the formula T 2 = Ca 3 and the proper number of significant digits in your value for C. The first one has been...
-
Activity-based budgeting, Balanced Scorecard, and strategy Sippican Corporation (B)12 Refer to Case 5-36, the Sippican Corporation (A) case, which required time-driven ABC analysis. Sippican's senior...
-
1. For each supply source or market n, evaluate d,, as defined in Equation 5.5. 2. Obtain a new location (x', y') for the facility, where DoFun d x' DF d and y' n=1 k dn DF d 3. If the new location...
-
What is the main problem facing the SME food company? Describe the analysis followed by the authors in investigating the problem extent and implications, causes and root cause. Describe, define, and...
-
When assets are exchanged to balance inventories, Multiple select question. the exchange will result in a gain or loss. the exchange does not represent earnings. the received assets are recorded at...
-
Discuss the role of scenario planning and probabilistic forecasting in market analysis, particularly in assessing the resilience of businesses to disruptive events and identifying strategic...
-
How do businesses employ advanced econometric models and data analytics techniques to conduct market analysis, incorporating factors such as demand elasticity, market segmentation, and competitive...
-
An example of a cost which would nSheridan Company used high and low data from June and July to determine its variable cost of $10 per unit. Additional information follows:ot be assigned to a...
-
You believe that the appropriate P/E ratio is 15. Find the value for each of the stocks below and indicate if you would buy the stock at the current market price. Revenue Expenses Net Income EPS...
-
Simplify the expression. Assume that all variables are positive. 23VI1 2 V44 8
-
Berkshire Hathaway, the investment holding company of Warren Buffett, reports its less than 20% ownership investments according to generally accepted accounting principles. However, it also provides...
-
Identify whether each of the following would be reported as an operating, investing, or financing activity in the statement of cash flows. a. Issuance of bonds payable b. Cash sales c. Collection of...
-
On the basis of the following data, determine the value of the inventory at the lower of cost or market. Apply lower of cost or market to each inventory item as shown in Exhibit 8. Exhibit 8:
-
a. Assume that \(y_{1}, \ldots, y_{n}\) are i.i.d. with a negative binomial distribution with parameters \(r\) and \(p\). Determine the maximum likelihood estimators. b. Use the sampling mechanism in...
-
For the data in Table 12.1, confirm that the Pearson statistic in equation (12.3) is 41.98 . Table 12.1 (12.3) Count Observed (j) (nj) Fitted Counts Using the Poisson Distribution (np;) 01234 6,996...
-
Show that the log-likelihood in equation (12.2) has a maximum at \(\widehat{\mu}=\bar{y}\). n L() Inf(y,) = (-+y; In - In y;!). i=1 i=1 (12.2)
Study smarter with the SolutionInn App