Cash Flow from Operating Activities (Indirect Method) The Lincoln Company owns no plant assets and had the following income statement for the year: Sales revenue... $750,000 Cost of goods sold. Wages expense . Rent expense.. Insurance expense. $470,000 110,000 42,000 15,000 637,000 Net income... $113,000 Additional information about the company includes: End of Beginning of Year Year Accounts receivable.. Inventory...... Prepaid insurance. Accounts payable $54,000 $49,000 66,000 60,000 8,000 7,000 22,000 18,000

Cash Flow from Operating Activities (Indirect Method) The Lincoln Company owns no plant assets and had the following income statement for the year: Sales revenue... $750,000 Cost of goods sold. Wages expense . Rent expense.. Insurance expense. $470,000 110,000 42,000 15,000 637,000 Net income... $113,000 Additional information about the company includes: End of Beginning of Year Year Accounts receivable.. Inventory...... Prepaid insurance. Accounts payable $54,000 $49,000 66,000 60,000 8,000 7,000 22,000 18,000

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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using the income statement for chester corp below, what is operating cash flow (OCF) for the company? sales- 925,000 COGS- 458,000 Dep Exp- 195,000 EBIT- 272,000 Int exp- 55,800 EBT- 216,200 Taxes- 45,402 NI- 170,798
Ravenna Company is a merchandiser using the indirect method to prepare the operating activities section of its statement of cash flows. Its balance sheet for this year is as follows: Ending Balance Beginning Balance Cash and cash equivalents $ 89,000 $ 106,750 Accounts receivable 71,500 77,000 Inventory 96,000 87,500 Total current assets 256,500 271,250 Property, plant, and equipment 255,000 245,000 Less accumulated depreciation 85,000 61,250 Net property, plant, and equipment 170,000 183,750 Total assets $ 426,500 $ 455,000 Accounts payable $ 56,000 $ 99,500 Income taxes payable 43,500 57,000 Bonds payable 105,000 87,500 Common stock 122,500 105,000 Retained earnings 99,500 106,000 Total liabilities and stockholders’ equity $ 426,500 $ 455,000 During the year, Ravenna paid a $10,500 cash dividend and sold a piece of equipment for $5,250 that originally cost $12,000 and had accumulated depreciation of $8,000. The company did not retire any bonds or…
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Cash Flows from Operating Activities—Indirect Method The net income reported on the income statement for the current year was $154,100. Depreciation recorded on store equipment for the year amounted to $25,400. 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 Cash $58,560 $53,290 Accounts receivable (net) 41,990 39,380 Inventories 57,330 59,950 Prepaid expenses 6,440 5,060 Accounts payable (merchandise creditors) 54,870 50,410 Wages payable 29,980 32,930 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: Net income Adjustments to reconcile net income to net cash flow…
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Subject: acounting
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