Prepare cash flow statements indirect method and direct method. P 1 7 . 1 0 A (
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Question:
Prepare cash flow statementsindirect method and direct method.
PA LO AP The financial statements of Oakley Ltd a private company reporting under ASPE, follow:
OAKLEY LTD
Balance Sheet
December
Assets
Cash
$
$
Shortterm notes receivable
Accounts receivable
Inventory
Property, plant, and equipment
Accumulated depreciation
Total assets
$
$
Liabilities and Shareholders Equity
Accounts payable
$
$
Income tax payable
Notes payable
Common shares
Retained earnings
Total liabilities and shareholders equity
$
$
OAKLEY LTD
Income Statement
Year Ended December
Sales
$
Cost of goods sold
Gross profit
Operating expenses
$
Loss on sale of equipment
Profit from operations
Other revenues and expenses
Interest revenue
Interest expense
Profit before income tax
Income tax expense
Profit for the year
$
Additional information:
Shortterm notes receivable are loans to other companies. During the year, the company collected the balance outstanding at December and made new loans in the amount of $
Equipment was sold during the year. This equipment cost $ originally and had a carrying amount of $ at the time of sale.
Equipment costing $ was purchased in exchange for a $ note payable.
Depreciation expense is included in operating expenses.
Accounts receivable are from the sale of merchandise on credit.
Accounts payable relate to the purchase of merchandise on credit.
Instructions
Prepare a cash flow statement for the year using the indirect method.
Prepare the operating section of the cash flow statement using the direct m
Related Book For
Accounting Principles
ISBN: 978-1119048473
7th Canadian Edition Volume 2
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak
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