Cash Flows from Operating Activities-Indirect Method The income statement disclosed the following items for the year: Depreciation expense $46,500 Gain on disposal of equipment 27,120 Net income 273,400 The changes in the current asset and liability accounts for the year are as follows: Increase (Decrease) Accounts receivable $7,240 Inventory (4,120) Prepaid insurance (1,550) Accounts payable (4,910) Income taxes payable 1,550 Dividends payable 1.080

Cash Flows from Operating Activities-Indirect Method The income statement disclosed the following items for the year: Depreciation expense $46,500 Gain on disposal of equipment 27,120 Net income 273,400 The changes in the current asset and liability accounts for the year are as follows: Increase (Decrease) Accounts receivable $7,240 Inventory (4,120) Prepaid insurance (1,550) Accounts payable (4,910) Income taxes payable 1,550 Dividends payable 1.080

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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Changes in Current Operating Assets and Liabilities-Indirect Method Blue Circle Corporation's comparative balance sheet for current assets and liabilities was as follows: Dec. 31, 20Y2 Dec. 31, 20Y1 $17,200 $17,000 68,800 69,500 27,800 26,800 18,000 19,000 Adjust net income of $84,600 for changes in operating assets and liabilities to arrive at net cash flow from operating activities. 84,100 X Accounts receivable Inventory Accounts payable Dividends payable Feedback Check My Work Once you have calculated the changes in the current operating assets and liabilities determine what impact those changes would have on cash. For example if accounts receivable has increased from last year to this year does that mean the company has collected more cash or less cash? If accounts payable has decreased does that mean the company has more cash or less cash?
The following information is available from the current period financial statements: Net income $117,355 Depreciation expense 24,849 Increase in accounts receivable 15,110 Decrease in accounts payable 21,436 The net cash flow from operating activities using the indirect method is a.$105,658 b.$178,750 c.$55,960 d.$117,355
Print Item Cash Flows from Operating Activities—Indirect Method The net income reported on the income statement for the current year was $149,000. Depreciation recorded on store equipment for the year amounted to $24,600. 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 $58,710 $53,430 Accounts receivable (net) 42,100 39,480 Merchandise inventory 57,480 60,110 Prepaid expenses 6,460 5,080 Accounts payable (merchandise creditors) 55,010 50,540 Wages payable 30,060 33,020 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…
The following information is available from the current period financial statements: Net income $133,833 Depreciation expense 22,491 Increase in accounts receivable 17,461 Decrease in accounts payable 28,059 The net cash flow from operating activities using the indirect method is:
Cash Flows from Operating Activities—Indirect Method The income statement disclosed the following items for year: Depreciation expense $36,900 Gain on disposal of equipment 21,510 Net income 222,200 The changes in the current asset and liability accounts for the year are as follows: Increase(Decrease) Accounts receivable $5,740 Inventory (3,270) Prepaid insurance (1,230) Accounts payable (3,890) Income taxes payable 1,230 Dividends payable 860 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 out flows, cash payments, decreases in cash, or any negative adjustments. Statement of Cash Flows (partial) For the year ended xxx Cash flows from operating activities: Net income $fill in the blank edc573f62020fa6_2 Adjustments to reconcile net income to net cash flow from operating activities: Depreciation fill in the blank…
Cash Flows from (Used for) Operating Activities The net income reported on the income statement for the current year was $116,600. Depreciation recorded on store equipment for the yea amounted to $19,200. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End Beginning of Year of Year Cash $44,770 $40,740 Accounts receivable (net) 32,100 30,110 Merchandise inventory 43,830 45,830 Prepaid expenses 4,920 3,870 Accounts payable (merchandise creditors) 41,950 38,540 Wages payable 22,920 25,180 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 payments, decreases in cash, or any negative adjustments. Statement of Cash Flows (partial) Cash flows from operating activities: Net income 116,600 Adjustments to reconcile net income to net cash flows from (used for) operating activities: Depreciation 19,200…
The Operating activities section of Filler-Up, Inc.’s Statement of Cash Flows for the year ended December 31, 20x2 and 20x1, includes the following items: (in $ millions) Fye 20x2 Fye 20x1 Cash flows from operating activities: Net earnings $359.7 $314.6 Depreciation 51.2 50.2 Change in accounts receivable; (increase) decrease (42.0) (43.4) Change in accounts payable; increase (decrease) 8.4 16.6 Net cash provided by operating activities $392.6 $329.3 Required Answer the following questions: Why does the company add back depreciation to compute net cash provided by operating activities? Is depreciation a source of cash? The company reports cash flows associated with accounts receivable. In 20x1, this item is a cash outflow of $43.4 million and in 20x2 this item is a cash outflow of $42.0 million. Explain why this item is on the statement. Did Filler-Up Inc.’s accounts payable increase or decrease during…
it is about constructing cash flow statement using indirect method, how is it get the 45? And please explain the calculation.
termining Net Income from Net Cash Flow from Operating Activities Curwen Inc. reported net cash flow from operating activities of $216,400 on its statement of cash flows for the year ended December 31. The following information was reported in the “Cash flows from operating activities” section of the statement of cash flows, using the indirect method: Decrease in income taxes payable $4,200 Decrease in inventories 10,400 Depreciation 16,000 Gain on sale of investments 7,200 Increase in accounts payable 2,900 Increase in prepaid expenses 1,800 Increase in accounts receivable 7,800 a. Determine the net income reported by Curwen Inc. for the year ended December 31.$fill in the blank 1 b. Curwen’s net income is different than net cash flow from operating activities. Which of the following could possibly be the reason for such difference? Because depreciation expense which has no effect on cash flows from operating activities. Changes in current operating assets and…
The income statement disclosed the following items for the year: Depreciation expense $40,700 Gain on disposal of equipment 23,760 Net income 254,700 The changes in the current asset and liability accounts for the year are as follows: Increase (Decrease) Accounts receivable $6,340 Inventory (3,610) Prepaid insurance (1,350) Accounts payable (4,300) Income taxes payable 1,350 Dividends payable 950 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 payments, decreases in cash, or any negative adjustments. Statement of Cash Flows (partial) Cash flows from (used for) operating activities: Adjustments to reconcile net income to net cash flows from (used for) operating activities: Changes in current operating assets and liabilities: Net cash flows from operating activities b. Why is net cash flows from operating activities different than net income? Cash flows…
Current Attempt in Progress Lee Enterprises reports the following information: Net income Depreciation expense Increase in accounts payable Increase in accounts receivable $5180000 $3979520. $5180000. $6380480. $5706480. 704480 159000 337000 Lee should report cash provided by operating activities of
The following information is available from the current period financial statements: Net income $116,986 Depreciation expense 23,264 Increase in accounts receivable 14,950 Decrease in accounts payable 15,020 The net cash flow from operating activities using the indirect method is