### Financial Accounting: Moneyman, Inc. Case Study**Objective:**To analyze the net income and cash flow from operating activities of Moneyman, Inc. for the current year.**Background:**Moneyman, Inc. reported a net income of $63,000 on its income statement for the current year. Depreciation recorded on fixed assets for the year was $24,000. Below are the balances of the current asset and liability accounts of Moneyman at the beginning and end of the year.**Account Balances:**| Account | End | Beginning ||----------------------------------------|---------|-----------|| Cash | $65,000 | $70,000 || Accounts Receivable | $70,000 | $57,000 || Inventories | $86,000 | $102,000 || Prepaid Expenses | $4,000 | $4,500 || Accounts Payable (merchandise creditors)| $51,000 | $58,000 || Cash Dividends Payable | $4,500 | $6,500 || Salaries Payable | $6,000 | $7,500 |**Tasks Required:**a. **Prepare the Cash Flows from Operating Activities:** Using the indirect method, prepare the cash flows from operating activities section of the statement of cash flows. This involves adjusting the net income for changes in asset and liability accounts and non-cash expenses such as depreciation and amortization.b. **Explain Net Cash Flow Variance:** Provide a brief explanation of why the net cash flow from operating activities is different from net income. Consider factors such as non-cash expenses, changes in working capital, and other adjustments which can cause discrepancies between reported net income and actual cash flow. This case study helps students explore the dynamics of cash flow and its relation to net income, highlighting the importance of understanding cash flow in financial analysis.

Cash Flow Statement - The Cash Flow Statement is the statement that shows the cash inflow and…

1. Moneyman, Inc. reported $63,000 net income on its income statement for the current year. Depreciation recorded on fixed assets for the year was $24,000. Below are the balances of the current asset and liability accounts of Moneyman at the beginning and end of the year. Cash Accounts Receivable Inventories Prepaid Expenses Accounts Payable (merchandize creditors) Cash Dividends Payable Salaries Payable Required: End $65,000 $70,000 $86,000 $ 4,000 $51,000 $ 4,500 $ 6,000 Beginning $70,000 $57,000 $102,000 $ 4,500 $58,000 $ 6,500 $7,500 a. Prepare the cash flows from operating activities section of the statement of cash flows using the indirect method. b. Briefly explain why net cash flow from operating activities is different from net income.

1. Moneyman, Inc. reported $63,000 net income on its income statement for the current year. Depreciation recorded on fixed assets for the year was $24,000. Below are the balances of the current asset and liability accounts of Moneyman at the beginning and end of the year. Cash Accounts Receivable Inventories Prepaid Expenses Accounts Payable (merchandize creditors) Cash Dividends Payable Salaries Payable Required: End $65,000 $70,000 $86,000 $ 4,000 $51,000 $ 4,500 $ 6,000 Beginning $70,000 $57,000 $102,000 $ 4,500 $58,000 $ 6,500 $7,500 a. Prepare the cash flows from operating activities section of the statement of cash flows using the indirect method. b. Briefly explain why net cash flow from operating activities is different from net income.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

This is the financial position of Hospital AMIH, Inc. regarding the repayment of its debts. These are the most relevant data of its financial statements: Total revenues $ 245,000 Total expenses $ 145,000 Depreciation $ 10,000 Changes in receivable accounts +$ 50,000 Changes in inventory ($ 20,000) Changes in accounts payable ($ 25,000) Total current liabilities $ 30,000 Total long-term debt $ 45,000 cash flow (total margin + depreciation expense) + interest expense/principal payment + interest expense Calculate the operating cash flow.
Subject- accounting
FDN Company shows the following balances on December 31, 2021: Accounts receivable P250,000 Accumulated depreciation P200,000 Allowance for uncollectible accounts P76,000 Cash P200,000 Property, plant and equipment P900,000 Supplies P30,000 How much is the Current Assets in the Statement of Financial Position as of December 31, 2021?
How do you determine retained earnings? Assets=$52,000 & Liabilities=$24,000 The trial balance for K and J Nursery, Inc., listed the following account balances at December 31, 2021, the end of its fiscal year: cash, $16,000; accounts receivable, $11,000; inventory, $25,000; equipment (net), $80,000; accounts payable, $14,000; Salaries payable, $9,000; interest payable, $1,000; notes payable (due in 18 months), $30,000; common stock, $50,000.Determine the year-end balance in retained earnings for K and J Nursery, Inc.
Following are selected accounts for Best Buy, Inc., for the fiscal year ended February 2, 2019. (a) Indicate whether each account appears on the balance sheet (B) or income statement (I). Best Buy, Inc. ($ millions)Amount Classification Sales $42,879 Answer B I Accumulated depreciation 6,690 Answer B I Depreciation expense 770 Answer B I Retained earnings 2,985 Answer B I Net income 1,464 Answer B I Property, plant & equipment, net 2,510 Answer B I Selling, general and admin expense 8,015 Answer B I Accounts receivable 1,015 AnswerB I Total liabilities 9,595 Answer B I Stockholders' equity 3,306 Answer B I (b) Using the data, compute total assets and total expenses. Total Assets Answer Total Expenses Answer answer complete and correct and in detail with all work
The following balances were taken from the books of Oriole Corp. on December 31, 2020. Interest revenue $87,950 Accumulated depreciation-equipment $41,950 Cash 52,950 Accumulated depreciation-buildings 29,950 Sales revenue 1,381,950 Notes receivable 156,950 Accounts receivable 151,950 Selling expenses 195,950 Prepaid insurance 21,950 Accounts payable 171,950 Sales returns and allowances 151,950 Bonds payable 101,950 Allowance for doubtful accounts 8,950 Administrative and general expenses 98,950 Sales discounts 46,950 Accrued liabilities 33,950 Land 101,950 Interest expense 61,950 Equipment 201,950 Notes payable 101,950 Buildings 141,950 Loss from earthquake damage 151,950 Cost of goods sold 622,950 Common stock 501,950 Retained earnings 22,950 Assume the total effective tax rate on all items is 20%. Prepare a multiple-step income statement; 100,000 shares of common stock were outstanding during the year. (Round earnings per share to 2 decimal places, e.g. 1.48.) Search DILL
The following balances were taken from the books of Bonita Corp. on December 31, 2020. Interest revenue $87,400 Accumulated depreciation—equipment $41,400Cash 52,400 Accumulated depreciation—buildings 29,400Sales revenue 1,381,400 Notes receivable 156,400Accounts receivable 151,400 Selling expenses 195,400Prepaid insurance 21,400 Accounts payable 171,400Sales returns and allowances 151,400 Bonds payable 101,400Allowance for doubtful accounts 8,400 Administrative and general expenses 98,400Sales discounts 46,400 Accrued liabilities 33,400Land 101,400 Interest expense 61,400Equipment 201,400 Notes payable 101,400Buildings 141,400 Loss from earthquake damage 151,400Cost of goods sold 622,400 Common stock 501,400 Retained earnings 22,400 Assume the total effective tax rate on all items is 20%. Prepare a multiple-step income statement; 100,000 shares of common stock were outstanding during the year. (Round earnings per share to 2 decimal places, e.g. 1.48.)
Sherwood, Inc., had the following current assets and current liabilities at the end of two recent years: Year 2(in millions) Year 1(in millions) Cash and cash equivalents $4,165 $4,528 Short-term investments, at cost 2,958 8,408 Accounts and notes receivable, net 9,404 8,624 Inventories 1,771 787 Prepaid expenses and other current assets 590 291 Short-term obligations (liabilities) 315 3,342 Accounts payable and other current liabilities 7,453 6,813 a. Determine the (1) current ratio and (2) quick ratio for both years. Round to one decimal place. Year 2 Year 1 Current ratio fill in the blank 1 fill in the blank 2 Quick ratio fill in the blank 3 fill in the blank 4