Cash Flows from Operating Activities-Indirect Method The net income reported on the income statement for the current year was $115,900. Depreciation recorded on store equipment for the year amounted to $19,100. 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 $46,820 $43,070 Accounts receivable (net) 33,570 31,830 Merchandise inventory 45,840 48,450 Prepaid expenses 5,150 4,090 Accounts payable (merchandise creditors) 43,870 40,740 Wages payable 23,970 26,620 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 net cash flow from operating activities: Changes in current operating assets and liabilities: Net cash flow from operating activities b. Cash flows from operating activities differs from net income because it does not use the of accounting. For example revenues are recorded on the income statement when

Cash Flows from Operating Activities-Indirect Method The net income reported on the income statement for the current year was $115,900. Depreciation recorded on store equipment for the year amounted to $19,100. 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 $46,820 $43,070 Accounts receivable (net) 33,570 31,830 Merchandise inventory 45,840 48,450 Prepaid expenses 5,150 4,090 Accounts payable (merchandise creditors) 43,870 40,740 Wages payable 23,970 26,620 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 net cash flow from operating activities: Changes in current operating assets and liabilities: Net cash flow from operating activities b. Cash flows from operating activities differs from net income because it does not use the of accounting. For example revenues are recorded on the income statement when

Name: Cash Flows from Operating Activities-Indirect MethodThe net income re
Uploaded: 2024-03-05T11:47:04.000Z
Channel: Bartleby
Description: Cash Flows from Operating Activities-Indirect MethodThe net income reported on the income statement for the current year was $115,900. Depreciation recorded on store equipment for the year amounted to $19,100. Balances of the current asset and curre

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

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…
The following information pertains to Peak Heights Company: Income Statement for Current Year Sales $ 85,300 Expenses Cost of goods $ sold 51,675 Depreciation 8,100 expense Salaries 12,000 71,775 expense Net income $ 13,525 Partial Balance Prior Sheet Current year year Accounts $ $ 9,900 receivable 14,400 Inventory 13,700 8,300 Salaries payable 1,550 850 Required: Present the operating activities section of the statement of cash flows for Peak Heights Company using the indirect method. Note: List cash outflows as negative amounts. PEAK HEIGHTS COMPANY Statement of Cash Flows (Partial) Cash flows from operating activities: Accounts receivable increase
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…
Fitz Company reports the following information. Selected Annual Income Statement Data Net income Depreciation expense Amortization expense Gain on sale of plant assets Cash flows from operating activities Selected Year-End Balance Sheet Data $ 373,000 Accounts receivable decrease 49,400 Inventory decrease 8,300 Prepaid expenses increase 6,700 Accounts payable decrease Salaries payable increase Use the indirect method to prepare the operating activities section of its statement of cash flows for the year ended December 31. Note: Amounts to be deducted should be indicated with a minus sign. Statement of Cash Flows (partial) Changes in current operating assets and liabilities Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash $ 60,400 42,500 6,400 8,800 1,700 $
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…
Required information Skip to question [The following information applies to the questions displayed below.] Ravenna Company is a merchandiser that uses 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 $ 102,000 $ 122,400 Accounts receivable 81,700 88,000 Inventory 109,700 100,000 Total current assets 293,400 310,400 Property, plant, and equipment 291,000 280,000 Less accumulated depreciation 97,000 70,000 Net property, plant, and equipment 194,000 210,000 Total assets $ 487,400 $ 520,400 Accounts payable $ 64,000 $ 113,700 Income taxes payable 49,700 65,700 Bonds payable 120,000 100,000 Common stock 140,000 120,000 Retained earnings 113,700 121,000 Total liabilities and stockholders’ equity $ 487,400 $ 520,400…
Required information Skip to question [The following information applies to the questions displayed below.] Ravenna Company is a merchandiser that uses 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 $ 102,000 $ 122,400 Accounts receivable 81,700 88,000 Inventory 109,700 100,000 Total current assets 293,400 310,400 Property, plant, and equipment 291,000 280,000 Less accumulated depreciation 97,000 70,000 Net property, plant, and equipment 194,000 210,000 Total assets $ 487,400 $ 520,400 Accounts payable $ 64,000 $ 113,700 Income taxes payable 49,700 65,700 Bonds payable 120,000 100,000 Common stock 140,000 120,000 Retained earnings 113,700 121,000 Total liabilities and stockholders’ equity $ 487,400 $ 520,400…
Fitz Company reports the following information. Selected Annual Income Statement Data Net income Depreciation expense Amortization expense Gain on sale of plant assets Cash flows from operating activities Selected Year-End Balance Sheet Data $ 379,000 Accounts receivable decrease 45,200 Inventory decrease 7,600 Prepaid expenses increase 7,600 Accounts payable decrease Salaries payable increase Use the indirect method to prepare the operating activities section of its statement of cash flows for the year ended December 31. (Amounts to be deducted should be indicated with a minus sign.) Statement of Cash Flows (partial) Changes in current operating assets and liabilities Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash $ 120,400 51,000 4,800 8,600 2,300 0
W BGP Electrical Supply 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: Balance sheet at December 31 Cash Accounts receivable Merchandise inventory Property and equipment. Less: Accumulated depreciation Accounts payable Accrued wages expense Note payable, long-term Common stock and additional paid-in capital. Retained earnings Income statement for current year Sales Cost of goods sold Other expenses Net income Additional Data: Current Year Prior Year $ 29,400 $ 37,300 32,700 28,900 38,300 100,800 (25,300) 42,000 121,500 (30,700) $ 202,800 $36,700 1,400 44,500 89,600 30,600 $ 202,800 Cash flows from operating activities: $ 123,000 73,000 38,100 $ 11,900 BGP ELECTRICAL SUPPLY Statement of Cash Flows For the Year Ended December 31, Current Year $ 172,100 a. Bought equipment for cash, $20,700. b. Paid $6,300 on the…
Cash flows from operating activities-indirect methodThe net income reported on the income statement for the current yearwas $93,700. Depreciation recorded on store equipment for the yearamounted to $31,200. Balances of the current asset and current liabilityaccounts at the beginning and end of the year are as follows: End of Year Beginning of Year CashAccounts receivable (net)InventoriesPrepaid expensesAccounts payable (merchandise creditors)Wages payable $24,10065,00047,2003,25023,4005,300 $19,70056,00050,0008,00017,2006,400 a. Prepare the "Cash flows from operating activities" section of thestatement of cash flows, using the indirect methodb. Briefly explain why net cash flow from operating activities isdifferent than net income.
Cash Flows from Operating Activities—Indirect Method The net income reported on the income statement for the current year was $260,900. Depreciation recorded on equipment and a building amounted to $78,000 for the year. 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 $72,010 $74,890 Accounts receivable (net) 91,310 92,410 Inventories 180,030 159,220 Prepaid expenses 10,010 10,560 Accounts payable (merchandise creditors) 80,440 83,580 Salaries payable 11,590 10,410 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) Cash flows from operating activities: Net income $fill in the blank 67ad34fdefd504f_2…
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…