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 $1,050,000 Cost of goods sold $658,000 Wages expense 154,000 Rent expense 58,800 Insurance expense 21,000 891,800 Net income $158,200 Additional information about the company includes: End of Year Beginning of Year Accounts receivable $75,600 $68,600 Inventory 84,000 92,400 Prepaid insurance 11,200 9,800 Accounts payable 30,800 25,200 Wages payable 12,600 15,400 Use the preceding information to calculate the cash flow from operating activities using the indirect method. Use negative signs with cash outflow answers. Cash Flow from Operating Activities Net Income Answer Add (deduct) items to convert net income to cash basis Accounts Receivable AnswerIncreaseDecrease Answer Inventory AnswerIncreaseDecrease Answer Prepaid Insurance AnswerIncreaseDecrease Answer Accounts Payable AnswerIncreaseDecrease Answer Wages Payable AnswerIncreaseDecrease
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 $1,050,000 Cost of goods sold $658,000 Wages expense 154,000 Rent expense 58,800 Insurance expense 21,000 891,800 Net income $158,200 Additional information about the company includes: End of Year Beginning of Year Accounts receivable $75,600 $68,600 Inventory 84,000 92,400 Prepaid insurance 11,200 9,800 Accounts payable 30,800 25,200 Wages payable 12,600 15,400 Use the preceding information to calculate the cash flow from operating activities using the indirect method. Use negative signs with cash outflow answers. Cash Flow from Operating Activities Net Income Answer Add (deduct) items to convert net income to cash basis Accounts Receivable AnswerIncreaseDecrease Answer Inventory AnswerIncreaseDecrease Answer Prepaid Insurance AnswerIncreaseDecrease Answer Accounts Payable AnswerIncreaseDecrease Answer Wages Payable AnswerIncreaseDecrease
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
The Lincoln Company owns no plant assets and had the following income statement for the year:
| Sales revenue | $1,050,000 | |
| Cost of goods sold | $658,000 | |
| Wages expense | 154,000 | |
| Rent expense | 58,800 | |
| Insurance expense | 21,000 | 891,800 |
| Net income | $158,200 |
Additional information about the company includes:
| End of Year | Beginning of Year | |
|---|---|---|
| $75,600 | $68,600 | |
| Inventory | 84,000 | 92,400 |
| Prepaid insurance | 11,200 | 9,800 |
| Accounts payable | 30,800 | 25,200 |
| Wages payable | 12,600 | 15,400 |
Use the preceding information to calculate the cash flow from operating activities using the indirect method.
Use negative signs with
| Cash Flow from Operating Activities | |||
|---|---|---|---|
| Net Income | Answer
|
||
| Add (deduct) items to convert net income to cash basis | |||
| Accounts Receivable | AnswerIncreaseDecrease
|
Answer
|
|
| Inventory | AnswerIncreaseDecrease
|
Answer
|
|
| Prepaid Insurance | AnswerIncreaseDecrease
|
Answer
|
|
| Accounts Payable | AnswerIncreaseDecrease
|
Answer
|
|
| Wages Payable | AnswerIncreaseDecrease
|
Answer
|
|
| Cash Provided by Operating Activities | Answer
|
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