Cash Flows from Operating Activities-Indirect MethodThe net income reported on the income statement for the current year was $277,000. Depreciation recorded on equipment and a building amounted to $82,800 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 YearCash$74,240$78,690Accounts receivable (net)94,14097,100Inventories185,600167,290Prepaid expenses10,32011,100Accounts payable (merchandise creditors)82,93087,820Salaries payable11,95010,940a. 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 activitiesb. If the direct method had been used, would the net cash flow from operating activities have been the same?

End of Year Beginning of Year $74,240 $78,690 punts receivable (net) 94,140 97,100 entories 185,600 167,290 maid expenses 10,320 11,100 punts payable (merchandise creditors) 82,930 87,820 ries payable 11,950 10,940 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) sh flows from operating activities: justments to reconcile net income to net cash flow from operating activities: anges in current operating assets and liabilities: t cash flow from operating activities f the direct method had been used, would the net cash flow from operating activities have been the same?

End of Year Beginning of Year $74,240 $78,690 punts receivable (net) 94,140 97,100 entories 185,600 167,290 maid expenses 10,320 11,100 punts payable (merchandise creditors) 82,930 87,820 ries payable 11,950 10,940 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) sh flows from operating activities: justments to reconcile net income to net cash flow from operating activities: anges in current operating assets and liabilities: t cash flow from operating activities f the direct method had been used, would the net cash flow from operating activities have been the same?

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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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…
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