A company reported the following information: net income $180,000; depreciation expense $42,000; loss on sale of equipment $5,500. Changes in current assets and liabilities from operations were: accounts receivable increased $15,000; inventory decreased $8,000; prepaid expenses decreased $3,500; accounts payable decreased $12,000. Calculate the net cash provided by operating activities. A) $189,000 B) $212,000 C) $195,500 D) $202,000 E) $186,500

A company reported the following information: net income $180,000; depreciation expense $42,000; loss on sale of equipment $5,500. Changes in current assets and liabilities from operations were: accounts receivable increased $15,000; inventory decreased $8,000; prepaid expenses decreased $3,500; accounts payable decreased $12,000. Calculate the net cash provided by operating activities. A) $189,000 B) $212,000 C) $195,500 D) $202,000 E) $186,500

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter14: Statement Of Cash Flows

Section: Chapter Questions

Problem 54P

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In the current year, Harrisburg Corporation had net income of 35,000, a 9,000 decrease in accounts receivable, a 7,000 increase in inventory, an 8,000 increase in salaries payable, a 13,000 decrease in accounts payable, and 10,000 in depreciation expense. Using the indirect method, prepare the operating activities section of its statement of cash flows based on this information.
Partial Statement of Cash Flows Service Company had net income during the current year of $65,800. The following information was obtained from Services balance sheet: Accounts receivable $26,540 increase Inventory 32,180 increase Accounts payable 9,300 decrease Interest payable 2,120 increase Accumulated depreciation (Building) 14,590 increase Accumulated depreciation (Equipment) 32,350 increase Additional Information: 1. Equipment with accumulated depreciation of $18,000 was sold during the year. 2. Cash dividends of $29,625 were paid during the year. Required: 1. Prepare the net cash flows from operating activities using the indirect method. 2. CONCEPTUAL CONNECTION How would the cash proceeds from the sale of equipment he reported on the statement of cash flows? 3. CONCEPTUAL CONNECTION How would the cash dividends be reported on the statement of cash flows? 4. CONCEPTUAL CONNECTION What could the difference between net income and cash flow from operating activities signal to financial statement users?
Reporting changes in equipment on statement of cash flows An analysis of the general ledger accounts indicates that office equipment, which cost 245,000 and on which accumulated depreciation totaled 112,500 on the date of sale, was sold for 105,900 during the year. Using this information, indicate the items to be reported on the statement of cash flows.
Statement of Cash Flows The following are Mueller Companys cash flow activities: a. Net income, 68,000 b. Increase in accounts receivable, 4,400 c. Receipt from sale of common stock, 12,300 d. Depreciation expense, 11,300 e. Dividends paid, 24,500 f. Payment for purchase of building, 65,000 g. Bond discount amortization, 2,700 h. Receipt from sale of long-term investments at cost, 10,600 i. Payment for purchase of equipment, 8,000 j. Receipt from sale of preferred stock, 20,000 k. Increase in income taxes payable, 3,500 l. Payment for purchase of land, 9,700 m. Decrease in accounts payable, 2,900 n. Increase in inventories, 10,300 o. Beginning cash balance, 18,000 Required: Prepare Mueller Company's statement of cash flows.
Smoltz Company reported the following information for the current year: cost of goods sold, $252,500; increase in inventory, $21,700; and increase in accounts payable, $12,200. What is the amount of cash paid to suppliers that Smoltz would report on its statement of cash flows under the direct method? a. $218,600 c. $262,000 b. $243,000 d. $286,400
Which item is added to net income when computing cash flows from operating activities? a. Gain on the disposal of property, plant, and equipment b. Increase in wages payable c. Increase in inventory d. Increase in prepaid rent Use the following information for Multiple-Choice Questions 11-9 and 11-10: Cornett Company reported the following information: cash received from the issuance of common stock, $150,000; cash received from the sale of equipment, $14,800; cash paid to purchase an investment, $20,000; cash paid to retire a note payable, $50,000; and cash collected from sales to customers, $225,000.
Apex Company prepared the statement of cash flows for the current year that is shown below: Apex CompanyStatement of Cash Flows—Indirect Method Operating activities: Net income $ 40,400 Adjustments to convert net income to cash basis: Depreciation $ 20,200 Increase in accounts receivable (60,900) Increase in inventory (25,100) Decrease in prepaid expenses 9,600 Increase in accounts payable 53,700 Decrease in accrued liabilities (10,500) Increase in income taxes payable 4,300 (8,700) Net cash provided by (used in) operating activities 31,700 Investing activities: Proceeds from the sale of equipment 15,200 Loan to Thomas Company (41,100) Additions to plant and equipment (121,100) Net cash provided by (used in) investing activities (147,000) Financing activities: Increase in bonds payable 89,700 Increase in common stock 39,300 Cash dividends (29,600) Net cash provided by (used in) financing…
A Co made a profit for the year of $18,750, after accounting for depreciation of $1,250. During the year, non-current assets were purchased for $8,000, receivables increased by $1,000, inventories decreased by $1,800 and payables increased by $350. What was A Co's increase in cash and bank balances during the year? A $10,650 В $10,850 C $12,450 $13,150
Preparing the Operating Activities Section The following items are relevant to the preparation of a statement of cash flows for Maxwell Inc. 1. Net loss for the year was $28,000. Depreciation expense was $70,000. 2. Wrote off a $5,600 account. During the year, gross accounts receivable increased $140,000, and the allowance for doubtful accounts increased $14,000. All sales of $840,000 are on account. 3. Pension expense is $140,000 while funding for the pension plan was $112,000. 4. Deferred tax liability increased $112,000, income taxes payable decreased $28,000, and income tax expense was $308,000. 5. $28,000 of interest was capitalized. Interest expense is $140,000. There is no change in interest payable. 6. Sold short-term investments (not held in a trading account) at a $5,600 gain, proceeds $22,400. 7. Merchandise inventory decreased by $14,000, accounts payable decreased by $7,000, and salaries payable increased by $19,600. Required Prepare the reconciliation of net income with…
Rogers Company reported net income of $44,587 for the year. During the year, accounts receivable increased by $7,982, accounts payable decreased by $2,757, and depreciation expense of $6,561 was recorded. Net cash provided by operating activities under the indirect method for the year is a.$44,587 b.$56,373 c.$61,887 d.$40,409
The Operating activities section of Filler-Up, Inc.’s Statement of Cash Flows for the year ended December 31, 20x2 and 20x1, includes the following items: (in $ millions) Fye 20x2 Fye 20x1 Cash flows from operating activities: Net earnings $359.7 $314.6 Depreciation 51.2 50.2 Change in accounts receivable; (increase) decrease (42.0) (43.4) Change in accounts payable; increase (decrease) 8.4 16.6 Net cash provided by operating activities $392.6 $329.3 Required Answer the following questions: Why does the company add back depreciation to compute net cash provided by operating activities? Is depreciation a source of cash? The company reports cash flows associated with accounts receivable. In 20x1, this item is a cash outflow of $43.4 million and in 20x2 this item is a cash outflow of $42.0 million. Explain why this item is on the statement. Did Filler-Up Inc.’s accounts payable increase or decrease during…
A company's income statement showed the following: net income, $128,000 and depreciation expense, $31,200. An examination of the company's current assets and current liabilities showed the following changes: accounts receivable decreased $9,800; merchandise inventory increased $18,800; and accounts payable increased $3,800. Calculate the net cash provided or used by operating activities. Multiple Choice $122,000. $164,400. $126,800.