Changes in Current Operating Assets and LiabilitiesBlue Circle Corporation's comparative balance sheet for current assets and liabilities was as follows:Dec. 31, Year 2 Dec. 31, Year 1Accounts receivable$20,300$25,000Inventory85,10076,000Accounts payable18,10022,100Dividends payable24,00023,000Adjust net income of $104,000 for changes in operating assets and liabilities to arrive at net cash flows from operating activities.

To adjust the net income for changes in operating assets and liabilities, we need to calculate the…

Answered: Changes in Current Operating Assets and…

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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Question Content Area Cash and accounts receivable for Adams Company are as follows: Current Year Prior Year Cash $63,104 $54,400 Accounts receivable (net) 34,736 66,800 What are the amounts and percentages of increase or decrease that would be shown with horizontal analysis? Account Dollar Change Percent Change Cash $fill in the blank 1 fill in the blank 2 % Accounts Receivable $fill in the blank 4 fill in the blank 5 %
Cash Flows from (Used for) Operating Activities The income statement disclosed the following items for the year: Depreciation expense $42,700 Gain on disposal of equipment 24,890 Net income 328,300 The changes in the current asset and liability accounts for the year are as follows: Increase (Decrease) Accounts receivable $6,650 Inventory (3,780) Prepaid insurance (1,420) Accounts payable (4,510) Income taxes payable 1,420 Dividends payable 1,000 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)
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?
Changes in Current Operating Assets and Liabilities Paneous Corporation's comparative balance sheet for current assets and liabilities was as follows: Dec. 31, Year 2 Dec. 31, Year 1 Accounts receivable $39,490 $31,590 Inventory 76,340 65,150 Accounts payable 60,750 45,410 Dividends payable 18,000 24,000 Adjust net income of $351,000 for changes in operating assets and liabilities to arrive at net cash flows from operating activities. $ 353,250 X
Adjusting Net Income for Changes in Current Assets and Current Liabilities Roberts Company reported net income of $50,000 for 20-2. The December 31 balances of the current assets and current liabilities are shown below. 20-2 20-1 Accounts Receivable $6,000 $10,000 Merchandise Inventory 60,000 50,000 Accounts Payable 36,000 40,000 Wages Payable 24,000 16,000 Compute cash provided by operating activities.
Financial Balance Sheet cash Account Receivable Inventories Investment Depreciable assets Accumulated depreciation Account Payable Capital Stock Retained Earnings Unappropriated Beginning of Year $41,200 65,000 40,000 10,000 198,000 (20,000) 30,000 150,000 154,200 End of Year ? $35,700 53,062 45,000 10,000 208,000 (40,000) 35,000 150,000
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…
Working Capital and Short Term Liquidity Ratios Bell Company has a current ratio of 2.85 on December 31. On that date the company's current assets are as follows: Cash Short-term investments Accounts receivable (net) Inventory Prepaid expenses Current assets $31,400 52,000 169,000 220,000 11,600 $484,000 Bell Company's current liabilities at the beginning of the year were $135,000 and during the year its operating activities provided a cash flow of $50,000. a. What are the firm's current liabilities on December 31? Round answer to the nearest whole number. 0 b. What is the firm's working capital on December 31? Round answer to the nearest whole number. 0 c. What is the quick ratio on December 31? Round answer to 2 decimal places. 0 d. What is the Bell's operating-cash-flow-to-current-liabilities ratio? Round answer to 2 decimal places.
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…
Question Content Area Fortune Corporation’s comparative balance sheet showed noncash current assets and liabilities as follows: Dec. 31, Year 2 Dec. 31, Year 1 Accounts receivable $7,500 $5,200 Merchandise inventory 11,500 16,000 Accounts payable 4,300 5,200 Dividends payable 4,000 3,000 Adjust Year 2 net income of $65,000 for changes in current operating assets and liabilities to arrive at net cash flows from operating activities using the indirect method.$fill in the blank 1
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
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