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?
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.
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.
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…
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…
JSW Corp. reported net income on the income statement for the current year of $59,000. Depreciation recorded on fixed assets for the year was $24,000. Balances of the current asset and current liability accounts at the end and beginning of the year are listed below. Prepare the cash flows from operating activities section of a statement of cash flows using the indirect method. End Beginning Cash $65,000 $ 70,000 Accounts receivable (net) 70,000 57,000 Inventories 86,000 102,000 Prepaid expenses 4,000 4,500 Accounts payable (merchandise creditors) 50,000 58,000 Cash dividends payable 4,500 6,500 Salaries payable 6,000 7,500 Statement of Cash Flows Cash Flows from Operating Activities: Net Income, per income statement $59,000 Add: Deduct:…
Van Beeber Corporation's comparative balance sheet and income statement for last year appear below: Comparative Balance Sheet Ending Balance Beginning Balance Cash and cash equivalents $ 58,000 $ 34,000 Accounts receivable 48,000 36,000 Inventory 56,000 67,000 Prepaid expenses 24,000 16,000 Long-term investments 280,000 220,000 Property, plant and equipment 580,000 580,000 Less accumulated depreciation 270,000 235,000 Total assets $ 776,000 $ 718,000 Accounts payable $ 32,000 $ 53,000 Accrued liabilities 38,000 21,000 Income taxes payable 61,000 31,000 Bonds payable 90,000 120,000 Common stock 80,000 60,000 Retained earnings 475,000 433,000 Total liabilities and stockholders’ equity $ 776,000 $ 718,000 Income Statement Sales $ 700,000 Cost of goods sold 360,000 Gross margin 340,000 Selling and administrative expense 210,000 Net operating income 130,000 Income taxes 39,000 Net income $ 91,000 The company declared and paid…
Yeoman Inc. reported thne following data: Net income $307,200 Depreciation expense 65,100 Loss on disposal of equipment 33,400 Increase in accounts receivable 15,000 Increase in accounts payable 10,700 Prepare the Cash Flows from (used for) 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. Yeoman Inc. Statement of Cash Flows (partial) Cash flows from (used for) operating activities: Net income Adjustments to reconcile net income to net cash flows from (used for) operating activities: Depreciation expense Loss on disposal of equipment Changes in current operating assets and liabilities: Increase in accounts receivable v Increase in accounts payable Net cash flows from operating activities Check My Work Previous
Cairns Consulting Corp. company records revealed the following for the current year: Increase in inventory $7,000 Depreciation expense Decrease in accounts payable Decrease in accounts receivable Net loss 24,000 3,000 9,000 25,000 What was the net cash flow from operating activities for the year? O cash flow from (inflow) $8,000 cash flow from (inflow) $0 O cash flow used (outflow) $2,000 O cash flow used (outflow) $4,000