Bonita Co. reported $150,000 of net income for 2020. The accountant, in preparing the statement of cash flows, noted the following items occurring during 2020 that might affect cash flows from operating activities. 1. 2. 3. 4. 5. 10 7. 8. Bonita purchased 100 shares of treasury stock at a cost of $20 per share. These shares were then resold at $25 per share. Bonita sold 100 shares of IBM common at $200 per share. The acquisition cost of these shares was $140 per share. There were no unrealized gains or losses recorded on this investment in 2020. Bonita revised its estimate for bad debts. Before 2020, Bonita's bad debt expense was 1% of its receivables. In 2020, this percentage was increased to 2%. Net account for 2020 were $456,200, and net accounts receivable decreased by $12,200 during 2020. Bonita issued 500 shares of its $10 par common stock for a patent. The market price of the shares on the date of the transaction was $23 per share. Depreciation expense is $35,300. Bonita Co. holds 40% of the Nirvana Company's common stock as a long-term investment. Nirvana Company reported $26,100 of net income for 2020. Nirvana Company paid a total of $2,200 of cash dividends to all investees in 2020. Bonita declared a 10% stock dividend. One thousand shares of $10 par common stock were distributed. The market price at date of issuance was $20 per share. Prepare a schedule that shows the net cash flow from operating activities using the indirect method. Assume no items other than those listed above affected the computation of 2017 net cash flow from operating activities.
Bonita Co. reported $150,000 of net income for 2020. The accountant, in preparing the statement of cash flows, noted the following items occurring during 2020 that might affect cash flows from operating activities. 1. 2. 3. 4. 5. 10 7. 8. Bonita purchased 100 shares of treasury stock at a cost of $20 per share. These shares were then resold at $25 per share. Bonita sold 100 shares of IBM common at $200 per share. The acquisition cost of these shares was $140 per share. There were no unrealized gains or losses recorded on this investment in 2020. Bonita revised its estimate for bad debts. Before 2020, Bonita's bad debt expense was 1% of its receivables. In 2020, this percentage was increased to 2%. Net account for 2020 were $456,200, and net accounts receivable decreased by $12,200 during 2020. Bonita issued 500 shares of its $10 par common stock for a patent. The market price of the shares on the date of the transaction was $23 per share. Depreciation expense is $35,300. Bonita Co. holds 40% of the Nirvana Company's common stock as a long-term investment. Nirvana Company reported $26,100 of net income for 2020. Nirvana Company paid a total of $2,200 of cash dividends to all investees in 2020. Bonita declared a 10% stock dividend. One thousand shares of $10 par common stock were distributed. The market price at date of issuance was $20 per share. Prepare a schedule that shows the net cash flow from operating activities using the indirect method. Assume no items other than those listed above affected the computation of 2017 net cash flow from operating activities.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter21: The Statement Of Cash Flows
Section: Chapter Questions
Problem 15GI: Jordan Company recognized a 5,000 unrealized holding gain on investment in Starbuckss common stock...
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Transcribed Image Text:Bonita Co. reported $150,000 of net income for 2020. The accountant, in preparing the statement of
cash flows, noted the following items occurring during 2020 that might affect cash flows from
operating activities.
1.
2.
3.
4.
5.
6.
N
7.
8.
Bonita purchased 100 shares of treasury stock at a cost of $20 per share. These shares were
then resold at $25 per share.
Bonita sold 100 shares of IBM common at $200 per share. The acquisition cost of these
shares was $140 per share. There were no unrealized gains or losses recorded on this
investment in 2020.
Bonita revised its estimate for bad debts. Before 2020, Bonita's bad debt expense was 1% of
its receivables. In 2020, this percentage was increased to 2%. Net account for 2020 were
$456,200, and net accounts receivable decreased by $12,200 during 2020.
Bonita issued 500 shares of its $10 par common stock for a patent. The market price of the
shares on the date of the transaction was $23 per share.
Depreciation expense is $35,300.
Bonita Co. holds 40% of the Nirvana Company's common stock as a long-term investment.
Nirvana Company reported $26,100 of net income for 2020.
Nirvana Company paid a total of $2,200 of cash dividends to all investees in 2020.
Bonita declared a 10% stock dividend. One thousand shares of $10 par common stock were
distributed. The market price at date of issuance was $20 per share.
Prepare a schedule that shows the net cash flow from operating activities using the indirect method.
Assume no items other than those listed above affected the computation of 2017 net cash flow from
operating activities.
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