Impact of Transactions Involving Operating Assets on Statement of Cash Flows From the following list, identify each item as operating, investing, financing, or not separately reported on the statement of cash flows. (Assume the indirect method is used.) Item Section of Cash Flows Statement Purchase of land Proceeds from sale of land Gain on sale of land Purchase of equipment Depreciation expense Proceeds from sale of equipment Loss on sale of equipment Financing Investing Not separately reported Operating

Impact of Transactions Involving Operating Assets on Statement of Cash Flows From the following list, identify each item as operating, investing, financing, or not separately reported on the statement of cash flows. (Assume the indirect method is used.) Item Section of Cash Flows Statement Purchase of land Proceeds from sale of land Gain on sale of land Purchase of equipment Depreciation expense Proceeds from sale of equipment Loss on sale of equipment Financing Investing Not separately reported Operating

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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In a cash flow statement which one of the following would appear as an inflow of cash? O The profit on sale of a fixed asset. A repayment of debenture loans. An issue of shares at a premium, An increase in stock during the year.
26.A gain on the sale of a plant asset in the ordinary course of business should be presented in a statement of cash flows prepared using the indirect method as an addition to net income Group of answer choices True False
Under the indirect method, depreciation expense is addedto net income to report cash flows from operating activities. Does depreciation cause an inflow of cash?
Which of the following will be reflected in the "Cash flows from operating activities" of a Statement of Cash Flows? A) Adjustment for depreciation B) Purchase of equipment C) Increase or decrease in loans D) Purchase of inventory
The net income reported on an income statement for the current year was $63,000. Depreciation recorded on fixed assets for the year was $24,000. Balances of the current asset and current liability accounts at the end and beginning of the year are listed below. 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. End Beginning Cash $65,000 $70,000 Accounts receivable (net) 70,000 57,000 Inventories 86,000 102,000 Prepaid expenses 4,000 4,500 Accounts payable (merchandise creditors) 51,000 58,000 Cash dividends payable 4,500 6,500 Salaries payable 6,000 7,500
In a statement of cash flows, indicate which of the following does NOT correspond to investment activities: Select one: a. Purchase of property, plant and equipment assets. b. Loan granted to company officials. c. Compensation received from the insurer for warehouse destroyed by fire. d. Sale of investments to negotiate (trading
Which of the following would be reported in the either the operating, investing or financing sections of the statement of cash flows prepared under the indirect method? Group of answer choices Declaration of an unpaid cash dividend Acquisition of a factory warehouse by issuing long term debt Gain on the sale of equipment sold Write-off of a noncollectable account receivable
Use the following income statement and information about selected current assets and current liabilities to calculate the net cash provided or used by operating activities under the indirect method. Income Statement For Year Ended December 31, Year 2 Sales Cost of goods sold Gross profit Operating expenses Wages expense Depreciation expense Rent expense Interest expense Loss on sale of land Net income $ 26,500 8,500 8,700 3,400 Accounts receivable Inventory Prepaid rent Accounts payable Wages payable Interest payable Selected beginning and ending balances of current asset and current liability accounts, all of which relate to operating activities, follow. $ 225,000 111,500 $ 113,500 $ 30,600 25,300 850 47,100 $ 66,400 5,000 $ 61,400 Balance December 31, December 31, Year 2 Year 1 $ 25,500 21,500 550 27,500 10,500 400 30,100 13,400 600
In the operating activities portion of the statement of cash flows when utilizing the indirect method, explain why depreciation expenditure, depletion expense, and amortization expense are added to net income in the operating activities section of the statement of cash flows.