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Determine the amount of cash flow for each item and indicate whether the item should appear in the operating, investing, or financing activities section of a statement of cash flows. Assume Gibson Company uses the direct method for showing net cash flow from operating activities. Prepare a statement of cash flows using the direct method.

Determine the amount of cash flow for each item and indicate whether the item should appear in the operating, investing, or financing activities section of a statement of cash flows. Assume Gibson Company uses the direct method for showing net cash flow from operating activities. Prepare a statement of cash flows using the direct method.

FINANCIAL ACCOUNTING
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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1:14 k t aces Required a. Determine the amount of cash flow for each item and indicate whether the item should appear in the operating, investing, or financing activities section of a statement of cash flows. Assume Gibson Company uses the direct method for showing net cash flow from operating activities. b. Prepare a statement of cash flows using the direct method. Complete this question by entering your answers in the tabs below. Required A Required B Determine the amount of cash flow for each item and indicate whether the item should appear in the operating, investing, or financing activities section of a statement of cash flows. Assume Gibson Company uses the direct method for showing net cash flow from operating activities. Note: Any cash outflow should be indicated by a minus sign. Select "No effect" if there is no effect. If there is both an inflow and an outflow of cash for the same item, enter the net difference in the Amount column. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13 Transactions in Accounts Receivable account in Salaries Payable account in Other Operating Expenses Payable in Depreciation Expense in Equipment account in Notes Payable account in Interest Payable account in Accounts Payable in Notes Receivable in Common Stock account in Land account in Taxes Payable account in Investments account . < Required A 000, resulting in a $7,100 gain. Amount Statement of cash flows Required B > Show less A
Transcribed Image Text:1:14 k t aces Required a. Determine the amount of cash flow for each item and indicate whether the item should appear in the operating, investing, or financing activities section of a statement of cash flows. Assume Gibson Company uses the direct method for showing net cash flow from operating activities. b. Prepare a statement of cash flows using the direct method. Complete this question by entering your answers in the tabs below. Required A Required B Determine the amount of cash flow for each item and indicate whether the item should appear in the operating, investing, or financing activities section of a statement of cash flows. Assume Gibson Company uses the direct method for showing net cash flow from operating activities. Note: Any cash outflow should be indicated by a minus sign. Select "No effect" if there is no effect. If there is both an inflow and an outflow of cash for the same item, enter the net difference in the Amount column. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13 Transactions in Accounts Receivable account in Salaries Payable account in Other Operating Expenses Payable in Depreciation Expense in Equipment account in Notes Payable account in Interest Payable account in Accounts Payable in Notes Receivable in Common Stock account in Land account in Taxes Payable account in Investments account . < Required A 000, resulting in a $7,100 gain. Amount Statement of cash flows Required B > Show less A
Gibson Company engaged in the following transactions for Year 1. The beginning cash balance was $28,100 and the ending cash balance was $74,991. 1. Sales on account were $283,100. The beginning receivables balance was $94,700 and the ending balance was $77,000. 2. Salaries expense for the period was $55,460. The beginning salaries payable balance was $3,815 and the ending balance was $2,180. 3. Other operating expenses for the period were $120,170. The beginning other operating expenses payable balance was $4,860 and the ending balance was $9,181. 4. Recorded $19,330 of depreciation expense. The beginning and ending balances in the Accumulated Depreciation account were $14,340 and $33,670, respectively. 5. The Equipment account had beginning and ending balances of $211,970 and $238,570, respectively. There were no sales of equipment during the period. 6. The beginning and ending balances in the Notes Payable account were $48,500 and $150,500, respectively. There were no payoffs of notes during the period. 7. There was $5,737 of interest expense reported on the income statement. The beginning and ending balances in the Interest Payable account were $1,680 and $1,120, respectively. 8. The beginning and ending Merchandise Inventory account balances were $94,130 and $112,956, respectively. The company sold merchandise with a cost of $151,359 (cost of goods sold for the period was $151,359). The beginning and ending balances in the Accounts Payable account were $9,610 and $11,628, respectively. 9. The beginning and ending balances in the Notes Receivable account were $5,100 and $10,500, respectively. Notes receivable result from long-term loans made to employees. There were no collections from employees during the period. 10. The beginning and ending balances in the Common Stock account were $97,000 and $113,000, respectively. The increase was caused by the issue of common stock for cash. 11. Land had beginning and ending balances of $47,900 and $36,120, respectively. Land that cost $11,780 was sold for $8,690, resulting in a loss of $3,090. 12. The tax expense for the period was $8,210. The Taxes Payable account had a $1,020 beginning balance and a $939 ending balance. 13. The Investments account had beginning and ending balances of $29,100 and $33,500, respectively. The company purchased investments for $17,900 cash during the period, and investments that cost $13,500 were sold for $25,000, resulting in a $7,100 gain. Required a. Determine the amount of cash flow for each item and indicate whether the item should appear in the operating, investing, or financing activities section of a statement of cash flows. Assume Gibson Company uses the direct method for showing net cash flow from operating activities. b. Prepare a statement of cash flows using the direct method. Complete this question by entering your answers in the tabs below. Required A Required B Determine the amount of cash flow for each item and indicate whether the item should appear in the operating, investing, or financing activities section of a statement of cash flows. Assume Gibson Company uses the direct method for showing net cash flow from operating activities. Note: Any cash outflow should be indicated by a minus sign. Select "No effect" if there is no effect. If there is both an inflow and an outflow of cash for the same item, enter the net difference in the Amount column. Show less A
Transcribed Image Text:Gibson Company engaged in the following transactions for Year 1. The beginning cash balance was $28,100 and the ending cash balance was $74,991. 1. Sales on account were $283,100. The beginning receivables balance was $94,700 and the ending balance was $77,000. 2. Salaries expense for the period was $55,460. The beginning salaries payable balance was $3,815 and the ending balance was $2,180. 3. Other operating expenses for the period were $120,170. The beginning other operating expenses payable balance was $4,860 and the ending balance was $9,181. 4. Recorded $19,330 of depreciation expense. The beginning and ending balances in the Accumulated Depreciation account were $14,340 and $33,670, respectively. 5. The Equipment account had beginning and ending balances of $211,970 and $238,570, respectively. There were no sales of equipment during the period. 6. The beginning and ending balances in the Notes Payable account were $48,500 and $150,500, respectively. There were no payoffs of notes during the period. 7. There was $5,737 of interest expense reported on the income statement. The beginning and ending balances in the Interest Payable account were $1,680 and $1,120, respectively. 8. The beginning and ending Merchandise Inventory account balances were $94,130 and $112,956, respectively. The company sold merchandise with a cost of $151,359 (cost of goods sold for the period was $151,359). The beginning and ending balances in the Accounts Payable account were $9,610 and $11,628, respectively. 9. The beginning and ending balances in the Notes Receivable account were $5,100 and $10,500, respectively. Notes receivable result from long-term loans made to employees. There were no collections from employees during the period. 10. The beginning and ending balances in the Common Stock account were $97,000 and $113,000, respectively. The increase was caused by the issue of common stock for cash. 11. Land had beginning and ending balances of $47,900 and $36,120, respectively. Land that cost $11,780 was sold for $8,690, resulting in a loss of $3,090. 12. The tax expense for the period was $8,210. The Taxes Payable account had a $1,020 beginning balance and a $939 ending balance. 13. The Investments account had beginning and ending balances of $29,100 and $33,500, respectively. The company purchased investments for $17,900 cash during the period, and investments that cost $13,500 were sold for $25,000, resulting in a $7,100 gain. Required a. Determine the amount of cash flow for each item and indicate whether the item should appear in the operating, investing, or financing activities section of a statement of cash flows. Assume Gibson Company uses the direct method for showing net cash flow from operating activities. b. Prepare a statement of cash flows using the direct method. Complete this question by entering your answers in the tabs below. Required A Required B Determine the amount of cash flow for each item and indicate whether the item should appear in the operating, investing, or financing activities section of a statement of cash flows. Assume Gibson Company uses the direct method for showing net cash flow from operating activities. Note: Any cash outflow should be indicated by a minus sign. Select "No effect" if there is no effect. If there is both an inflow and an outflow of cash for the same item, enter the net difference in the Amount column. Show less A
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