Accounts payable pertain to operating expenses.Prepare the operating activities section of the statement of cash flows using the indirect method. (Show amounts that decrease cash flowwith either a-sign e.g. -15,000 or in parenthesis e.g. (15,000).)SHERIDAN COMPANYPartial Statement of Cash FlowsAdjustments to reconcile net income to$$

Net Income: This is the company's net profit or loss for the period, which is obtained from the…

Answered: Accounts payable pertain to operating…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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I need some assistance in Preparing the operating activities section of the statement of cash flows using the direct method. See attached images for the inputs. I have been getting "bounced" on the yellow sections for incorrect values
On the indirect statement of cash flows, $500,000 relating to notes payable was subtracted from net income to get indirect cash flow from operations. This must mean that:
When using the indirect method of preparing a statement of cash flows, how will a $23,500 increase in accounts payable affect net income in the operating activities section of the statement of cash flows and why? a. There will be no effect, as this is a non-cash transaction/entry b. Increases in current liabilities are added to net income, so it will increase net cash by $23,500 C. Increases in current liabilities are deducted from net income, so it will decrease net cash by $23,500 d. There is no effect, as accounts receivable are on the balance sheet, not the income statement
Sharp Screen Films, Incorporated, is developing its annual financial statements at December 31, current year. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statement are summarized as follows: Balance sheet at December 31 Cash Accounts receivable Merchandise inventory Property and equipment Less: Accumulated depreciation Accounts payable Wages payable Note payable, long-term Common stock and additional paid-in capital Retained earnings Income statement for current year Sales Cost of goods sold Depreciation expense Other expenses Net income Additional Data: Current Year $ 67,850 20,250 26,450 214,450 (63,800) $ 265,200 $ 13,800 5,600 64,500 104,900 76,400 $ 265,200 $ 215,000 112,000 15,450 45,000 $ 42,550 a. Bought equipment for cash, $60,950. b. Paid $11,900 on the long-term note payable. c. Issued new shares of stock for $36,900 cash. d. Dividends of $10,450 were declared and paid. e. Other expenses all relate…
The comparative balance sheets and income statements for Gypsy Company follow: Balance Sheets As of December 31 Year 2 Year 1 Assets $ 16,300 $ 32,500 4,750 11,200 45,000 (17,800) 28,000 Cash Accounts receivable 2,800 9,800 52,000 (21,800) 12,000 Inventory Equipment Accumulated depreciation-equipment Land Total assets $103,650 $ 71,100 Liabilities and equity Accounts payable (inventory) Long-term debt $ 3,750 $ 5,800 47,000 47,100 4,900 7,800 25,000 33,400 Common stock Retained earnings Total liabilities and equity $103,650 $ 71,100 Income Statement For the Year Ended December 31, Year 2 $ 61,200 (24,500) 36,700 (12,000) 24,700 Sales revenue Cost of goods sold Gross margin Depreciation expense Operating income Gain on sale of equipment Loss on disposal of land 1,500 (100) $ 26,100 Net income Additional Data 1. During Year 2, the company sold equipment for $21,500; it had originally cost $36,000. Accumulated depreciation on this equipment was $16,000 at the time of the sale. Also, the…
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Clark Bell started a personal financial planning business when he accepted $69,000 cash as advance payment for managing the financial assets of a large estate. Bell agreed to manage the estate for a one-year period beginning June 1, Year 1. Required Show the effects of the advance payment and revenue recognition on the Year 1 financial statements using the following horizontal statements model. In the Cash Flows column, use OA to designate operating activity, IA for investing activity, FA for financing activity, and NC for net change in cash. If the account is not affected, leave the cell blank. How much revenue would Bell recognize on the Year 2 income statement? What is the amount of cash flow from operating activities in Year 2?
If Accounts receivable increase by R.O.100,000. Income reported the income statement for the year was R.O.2,800,000. Excluding of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows is Select one: a. R.O.3,500,000b. R.O.2,800,000 c R.O.2,700,000 d. R.O.2,900,000
Shim Company presents its statement of cash flows using the indirect method. The following accounts and corresponding balances were drawn from Shim's Year 2 and Year 1 year-end balance sheets. Account Title Year 2 Year 1 $31,297 1,496 249 Accounts receivable $37,556 Prepaid rent 1,309 Interest receivable Accounts payable Salaries payable 199 10,537 2,930 3,215 12,644 3,348 Unearned revenue 4,287 The income statement reported a $1,170 gain on the sale of equipment, an $750 loss on the sale of land, and $3,700 of depreciation expense. Net income for the period was $53,353. Required Prepare the operating activities section of the statement of cash flows. (Amounts to be deducted should be indicated with a minus sign.) Cash flows from operating activities: Plus: Less: Net cash flow from operating activities
Entity L reported net income of $125,000 for the current year and uses the indirect method to report operating activities cash flow. Accounts Receivable increased by $14,000 during the year. Choose the appropriate category on the statement of cash flows to report the increase in Accounts Receivable. Cash Flows From Operating Activities-Add to Net Income Cash Flows From Operating Activities-Deduct from Net Income Cash Flows From Investing Activities Cash Flows From Financing Activities Non-cash

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