a. Prepare the "Cash Flows from 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. Statement of Cash Flows (partial) Cash flows from operating activities: Adjustments to reconcile net income to net cash flow from operating activities: Changes in current operating assets and liabilities: Net cash flow from operating activities 0 0 Dood b. If the direct method had been used, would the net cash flow from operating activities have been the same?

a. Prepare the "Cash Flows from 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. Statement of Cash Flows (partial) Cash flows from operating activities: Adjustments to reconcile net income to net cash flow from operating activities: Changes in current operating assets and liabilities: Net cash flow from operating activities 0 0 Dood b. If the direct method had been used, would the net cash flow from operating activities have been the same?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: 1. The statement of cash flows classifies cash receipts and cash payments into two categories:…

A: Cash flow statement is a statement showing the inflow and outflow of cash in an organization. It is…

Q: What is the Indirect Method used when preparing the Statement of Cash Flows and please give me a few…

A: Indirect method: Under indirect method the net income is adjusted with the increase or decrease of…

Q: Which of the following should be deducted from net income in computing net cash flows from operating…

A: Introduction: Statement of cash flows: All cash in and out transactions in an accounting period is…

Q: AutoSave Unit 9 Accounting II O Search (Alt+Q) Abygail Hicks AH ff File Home Design Layout…

A: Statement of Cash Flow Statement Cash Flow from Operating Activities = $37180 Cash Flow from…

Q: XS Supply Company is developing its annual financial statements at December 31, current year. The…

A: Cash flow statement provided information about the cash inflows and cash outflows of the company.…

Q: The net income reported on the income statement for the current year was $93,700. Depreciation…

A: The cash flow from the operating activity is a part of the cash flow statement and it can be…

Q: The cash flow on total assets ratio Is computed by dividing average total assets by operating in-…

A: Cash flow on total assets is an efficiency ratio that analyzes real cash flows to business assets…

Q: Which of the following statements regarding the statement of cash flows is false?

A: A cash flow statement is an important tool used to manage finances by tracking the cash flow for an…

Q: The following income statement and additional year-end information is provided. SONAD COMPANY Income…

A: CASH FLOW STATEMENT Cash flow statement is additional information to user of financial statement.…

Q: When constructing a Statement of Cash Flows, which of the following actions would be considered a…

A: Use of funds means use of cash for meeting working capital requirements or long term expenditure. We…

Q: Which of the following would not be added to net income in calculating cash flows from operating…

A: The question's central theme is to assess your grasp of the adjustments applied to net income when…

Q: true or false The first step in preparing the statement of cash flows is to determine the change…

A: Steps Include in preparation of cash flow statement; 1St Step= Preparation of cash flow from…

Q: Cash flows from (used for) operating activities-indirect method The income statement disclosed the…

A: The cash flow statement is one of the important financial statement of the business. The cash flow…

Q: If the Accounts Receivable balance increases during a period, how will this increase be recognized…

Q: The net income reported on the income statement for the current year was $211,300. Depreciation…

A: The cash flow from operating activities include the cash flow from day to day activities of the…

Q: 2. The direct method of determining cash flows begins with net income and lists all adjustments to…

A: The objective of the question is to verify the accuracy of the statement about the direct method of…

Q: To determine cash payments for operating expenses for the statement of cash flows using the direct…

A: Operating expenses: These are the expenses that a business incur through its normal business and…

Q: Finch Brands, Inc., presents its statement of cash flows using the indirect method. The following…

A: The cash flow statement is prepared to record the cash flow from various activities during the…

Q: When preparing a statement of cash flows, a decrease in accounts receivable during a period would…

A: Statement of Cash Flow - Statement of Cash Flow shows movement of cash during the financial year.…

Q: State the section(s) of the statement of cash flows prepared by the indirect method (operating…

A: In the context of the given question, we are required to show the treatment of different…

Q: When preparing a schedule for the calculation of cash generated from operating activities under the…

A: Cash flow statement provided information about the cash inflows and cash outflows of the…

Q: The sum of the cash generated or used by each section of the statement of the cash flows should be…

A: Statement of cash flows: Statement of cash flow is a financial statement that shows the cash and…

Q: Cash Flows from Operating Activities-Indirect Method The net income reported on the income statement…

A: SOLUTION- CASH FLOW STATEMENT IS A FINANCIAL STATEMENT THAT PROVIDES AGGREGATES DATA REGARDING ALL…

Q: A reader of a statement of cash flows wishes to analyze the major classes of gross cash receipts and…

A: Question: A reader of a statement of cash flows wishes to analyze the major classes of gross cash…

Q: When using the indirect method to prepare the operating section of a statement of cash flows, which…

A: Decrease in accounts receivable. Added to the net income Gain on sale of land. Deducted from the…

Question

The net income reported on the income statement for the current year was $295,600. Depreciation recorded on equipment and a building amounted to $88,400 for the year. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows:
End of Year Beginning of Year
$76,560
$79,620
97,080
98,250
191,400
169,270
10,640
11,230
85,520
88,860
12,330
11,070
Cash
Accounts receivable (net)
Inventories
Prepaid expenses
Accounts payable (merchandise creditors)
Salaries payable
a. Prepare the "Cash Flows from 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.
Statement of Cash Flows (partial)
Cash flows from operating activities:
Adjustments to reconcile net income to net cash flow from operating activities:
Changes in current operating assets and liabilities:
Net cash flow from operating activities
0000000
b. If the direct method had been used, would the net cash flow from operating activities have been the same?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Introduction:

VIEW

Step 2: REQUIREMENT A:

VIEW

Step 3: REQUIREMENT B:

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Cash Flows from (Used for) Operating Activities The net income reported on the income statement for the current year was $73,600. Depreciation recorded on store equipment for the year amounted to $27,400. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: Cash Accounts receivable (net) Merchandise inventory Prepaid expenses Accounts payable (merchandise creditors) Wages payable End of Year $23,500 56,000 35,500 4,750 21,800 4,900 Beginning of Year $18,700 48,000 40,000 7,000 16,800 5,800 a. 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
A measure that helps estimate the amount and timing of cash flows from operating activities is the cash flow on total assets ratio. True or False True False
Using the following answer keys, you are to identify in which activity each of the transactions is classified and its effect on cash flows. Cash Flow Classification.using the capital letter only: . .Operating Activity • L.Investing Activity • F..Financing Activity • OL.Operating and Investing Activity • N.Noncash Transaction Effect on Cash Flows.using the capital letter only: • .Increase • D.Decrease N.No Effect Transaction Cash Flow Classification Effect on Cash Flows Paid a cash dividend. Decreased accounts receivable. Increased inventory. Retired long-term debt with cash. Sold long-term securities at a loss. Issued stock for equipment. Decreased prepaid insurance. Purchased treasury stock with cash. Retired a fully depreciated truck (no gain or loss). Transferred cash to money market account.
When preparing a statement of cash flows, cash equivalents are subtracted from cash in order to calculate the net change in cash during a period. True False
D. MATCHING In the following statement of cash flows, each letter represents a specific item which may appear on the statement, using the indirect method. Match the appropriate letter(s) with each transaction listed below. More than one letter may be used for each transaction. 1) 2) 3) 4) 5) 6) 7) 8) 9) Statement of Cash Flows Cash Flows from Operating Activities: Net Income Adjustments to Net Income: Add Deduct Cash Flows from Investing Activities Add Deduct Cash Flows from Financing Activities Add Deduct Significant Non-Cash Transactions Not on the Statement of Cash Flows (A) (B) (D) 30 000€ (H) Sold a short-term, available-for-sale investment at a gain. Temporarily borrowed money by signing a short-term, promissory trade notes payable. Treasury stock was purchased with cash. Declared cash dividends (but did not pay them yet). Purchased land by giving shares of common stock held in treasury. Amortized the premium on bonds payable. Paid off bonds payable before maturity and incurred a…
Help with part "a" please!
State the section(s) of the statement of cash flows prepared by the indirect method (operating activities, investing activities, financing activities, or not reported) and the amount that would be reported for each of the following transactions: Note: Only consider the cash component of each transaction. Use the minus sign to indicate amounts that are cash out flows, cash payments, decreases in cash, or any negative adjustments. If your answer is not reported in an amount box does not require an entry, leave it blank or enter "0". a. Received $120,000 from the sale of land costing $70,000. Investing activities $fill in the blank 2 Operating activities $fill in the blank 4 b. Purchased investments for $75,000. Investing activities $fill in the blank 6 c. Declared $35,000 cash dividends on stock. $5,000 dividends were payable at the beginning of the year, and $6,000 were payable at the end of the year. Financing activities $fill in the blank 8 d. Acquired equipment for…
7
abels and Amount Descriptions Instructions Labels Dec. 31, Dec. 31, December 31, 20Y3 20Y3 20Y2 For the Year Ended December 31, 20Y3 Amount Descriptions Assets 3 Cash $625,680.00 $586,230.00 Cash received from sale of investments 228,100.00 208,850.00 4 Accounts receivable (net) 5 Inventories Cash paid for purchase of land Cash paid for purchase of equipment Cash received from issuing common 640,910.00 617,650.00 0.00 240,620.00 6 Investments 7 Land 328,090.00 0,00 stock 704,540.00 553,320.00 8 Equipment 9 Accumulated depreciation-equipment Cash dividends (166,310.00) (147840.00) Decrease in accounts payable Decreașe in accounts receivable Decrease in accrued expenses payable 10 Total assets $2,361,010.00 $2,058,830.00 11 Liabilities and Stockholders' Equity $425,280.00 $404,550.00 52,020.00 12 Accounts payable Decrease in inventories 41,990.00 13 Accrued expenses payable Depreciation 24,190.00 20,170.00 14 Dividends payablie Gain on sale of investments 15 Common stock, $4 par…