The direct versus the indirect method of determining cash flows from operating activities The following accounts and
Question:
The direct versus the indirect method of determining cash flows from operating activities The following accounts and corresponding balances were drawn from Littlejohn Company's 2012 and 2011 year-end balance sheets:
The 2012 income statement is shown below:
Required
a. Prepare the operating activities section of the statement of cash flows using the direct method.
b. Prepare the operating activities section of the statement of cash flows using the indirect method.
Transcribed Image Text:
Account Title 2012 2011 Accounts receivable Prepaid rent Utilities payable Other operating expenses payable $89,000 1,100 2,100 42,000 $92,000 1,500 2,600 49,000
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 62% (8 reviews)
a Direct Method Reconciliation of Accounts Receivable Beginning balance 92000 Increase due to revenu...View the full answer
Answered By
Danish Sohail
My objective is to become most reliable expert for clients. For last 10 years I have been associated with the field of accounting and finance. My aim is to strive for best results and pay particular attention to client needs. I am always enthusiastic to help clients for issues and concerns related to business studies. I can work on analysis of the financial statements, calculate different ratios and analysis of ratios. I can critically evaluate stock prices based on the financial analysis and valuation for companies using financial statements of the business entity being valued with use of excel tools. I have expertise to provide effective and reliable help for projects in corporate finance, equity investments, financial accounting, cost accounting, financial planning, business plans, marketing plans, performance measurement, budgeting, economic research, risk assessment, risk management, derivatives, fixed income investments, taxation, auditing, and financial performance analysis.
4.80+
78+ Reviews
112+ Question Solved
Related Book For
Fundamental Managerial Accounting Concepts
ISBN: 978-0078110894
6th Edition
Authors: Edmonds, Tsay, olds
Question Posted:
Students also viewed these Managerial Accounting questions
-
Direct versus indirect method of determining cash flows from operating activities Security Services, Inc. (SSI), recognized $2,400 of sales revenue on account and collected $1,900 of cash from...
-
The following accounts and corresponding balances were drawn from Pixi Companys 2014 and 2013 year-end balance sheets: The following accounts and corresponding balances were drawn from Pixi Companys...
-
The following accounts and corresponding balances were drawn from Marinelli Company's 2014 and 2013 year-end balance sheets: The 2014 income statement is shown below: Income Statement Sales...
-
Ivanhoe Company was formed on July 1, 2018 It was authorized to issue 285,500 shares of $10 par value common stock and 95,400 shares of 8 $25 par value, cumulative and nonparticipating preferred...
-
A sportswriter wants to know how strongly the residents of Indianapolis, Indiana, support the local minor league baseball team, the Indianapolis Indians. He stands outside the stadium before a game...
-
If the force T 1 is applied to the rope at A, determine the force at T 2 at B needed to pull the rope over the two fixed drums having the angles of contact and the coefficients of static friction...
-
Visualizing Football and Brain Size Exercise 2.143 introduces a study in which the number of years playing football and the size of the hippocampus in the brain were recorded for each person in the...
-
Gryphon Manufacturing Company manufactures and leases a variety of items. On January 2, 2011, Gryphon leased a piece of equipment to Scissor Industries Co. The lease is for seven years for an annual...
-
Create a statement of cash flow for the current year using Wright Co's income statement and balance sheet. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Income...
-
Consider a test signal m (t) defined by a hyperbolic tangent function: m (t) = A tanh (t), where A and are constants. Determine the minimum step size for delta modulation of this signal, which is...
-
Use the direct method to determine cash flows from operating activities The following accounts and corresponding balances were drawn from Hughes Company's 2012 and 2011 year-end balance sheets: The...
-
Determining cash flow from investing activities On January 1, 2011, Oswalt Company had a balance of $156,000 in its Land account. During 2011, Oswalt sold land that had cost $66,000 for $98,000 cash....
-
The standard factory overhead rate is $10 per direct labor hour ($8 for variable factory overhead and $2 for fixed factory overhead) based on 100% capacity of 30,000 direct labor hours. The standard...
-
when may the contracting officer choose not to accept an auditors recommendations? A. Any time, in accordance with agency procedures, the auditors role is advisory B. Never; the auditor has the final...
-
The materiality test for discontinued operations and unusual and infrequent transactions should be based on the operating income of the interim period in which the discontinued operations are first...
-
if contract work is to be performed over multiple accounting periods, the proposed labor rates should be applied to the hours in the actual periods when the work will be performed, not the final...
-
A luggage buyer purchased 55 laptop bags that cost $35 each. The cash discount earned was2.0%, and the store paid inward freight of $75.Find the total cost of the goods on this order.
-
Explain the role of Remittance Advice in the revenue cycle. a. It identifies services that may not be covered by insurance. b. It allows the MAC to process Medicare claims. c. It indicates the types...
-
Discuss the limitations that may apply to the use of a net operating loss that is acquired in a corporate reorganization.
-
Draw the appropriate control flow graph of the given pseudocode.Make sure to only use one number for blocks of code which are all sequential and when the first line is executed, all of those lines...
-
(A) Is it possible to get 19 heads in 20 flips of a fair coin? Explain. (B) If you flipped a coin 40 times and got 37 heads, would you suspect that the coin was unfair? Why or why not? If you suspect...
-
When he started work on his twenty-second birthday, D. B. Cooper decided to invest money each month with the objective of becoming a millionaire by the time he reaches age 65. If he expects his...
-
Linda 0' Shay deposited $30,000 in a savings account as a perpetual trust. She believes the account will earn 7% annual interest during the first 10 years and 5% interest thereafter. The trust is to...
-
A machine costs $20,000 and has a 5-year useful life. At the end of the 5 years, it can be sold for $4000. If annual interest is 8%, compounded semiannually, what is the equivalent uniform annual...
-
How do emerging technologies such as blockchain and artificial intelligence facilitate stakeholder communication, participation, and feedback mechanisms in modern governance structures ?
-
hen firms kept leases off their balance sheets it tended to a. make the firms appear riskier than they actually were because their stated debt ratios were increased. b. have no effect on either cash...
-
Sunnyside Solar Consultants provided $180,000 of consulting services to Delton Developments on April 14, 2023, on account. Use the PST rates in Exhibit 10.6. Required: Journalize Sunnyside's April 14...
Study smarter with the SolutionInn App