ndirect Method— Preparing a Statement of Cash Flows Range Company has the following selected data from its annual period ended December 31, 2020. Selected Data Amount Paid cash dividend $20,000 Purchase of equipment 120,000 Increase in merchandise inventory 28,000 Borrowed on a long-term note 50,000 Acquired land as a future company site; paid in full by issuing 6,000 shares of Range capital stock, $10 par, when the market price per share was $15 ? Increase in prepaid expenses 6,000 Decrease in accounts receivable 14,000 Payment of bonds payable in full 194,000 Increase in accounts payable 10,000 Cash from disposal of equipment (sold at book value) 24,000 Decrease in rent receivable 4,000 Income Statement For the Year Ended December 31, 2020 Sales revenue $800,000 Rent revenue 20,000 Cost of goods sold 380,000 Depreciation expense 40,000 Remaining expenses 194,000 Net income $206,000 Required Prepare a statement of cash flows for the Range Company for the year ended December 31, 2020, using the indirect method. The beginning-year cash balance was $124,000. Statement of Cash Flows For the Year Ended December 31, 2020 Cash flows from operating activities Net income Answer Adjustments: Depreciation expense Answer Decrease in accounts receivable Answer Decrease in rent receivable Answer Increase in merchandise inventory Answer Increase in prepaid expenses Answer Increase in accounts payable Answer Net cash provided by operating activities Answer Cash flows from investing activities Cash paid for acquisition of equipment Answer Cash received from sale of fixed assets Answer Net cash used by investing activities Answer Cash flows from financing activities Cash received from long-term debt issuance Answer Cash paid on bond extinguishment Answer Cash paid for dividends Answer Net cash used by financing activities Answer Net increase in cash during 2020 Answer Cash, January 1, 2020 Answer Cash, December 31, 2020 Answer Noncash disclosure: Purchased a plant site by issuing capital stock

ndirect Method— Preparing a Statement of Cash Flows Range Company has the following selected data from its annual period ended December 31, 2020. Selected Data Amount Paid cash dividend $20,000 Purchase of equipment 120,000 Increase in merchandise inventory 28,000 Borrowed on a long-term note 50,000 Acquired land as a future company site; paid in full by issuing 6,000 shares of Range capital stock, $10 par, when the market price per share was $15 ? Increase in prepaid expenses 6,000 Decrease in accounts receivable 14,000 Payment of bonds payable in full 194,000 Increase in accounts payable 10,000 Cash from disposal of equipment (sold at book value) 24,000 Decrease in rent receivable 4,000 Income Statement For the Year Ended December 31, 2020 Sales revenue $800,000 Rent revenue 20,000 Cost of goods sold 380,000 Depreciation expense 40,000 Remaining expenses 194,000 Net income $206,000 Required Prepare a statement of cash flows for the Range Company for the year ended December 31, 2020, using the indirect method. The beginning-year cash balance was $124,000. Statement of Cash Flows For the Year Ended December 31, 2020 Cash flows from operating activities Net income Answer Adjustments: Depreciation expense Answer Decrease in accounts receivable Answer Decrease in rent receivable Answer Increase in merchandise inventory Answer Increase in prepaid expenses Answer Increase in accounts payable Answer Net cash provided by operating activities Answer Cash flows from investing activities Cash paid for acquisition of equipment Answer Cash received from sale of fixed assets Answer Net cash used by investing activities Answer Cash flows from financing activities Cash received from long-term debt issuance Answer Cash paid on bond extinguishment Answer Cash paid for dividends Answer Net cash used by financing activities Answer Net increase in cash during 2020 Answer Cash, January 1, 2020 Answer Cash, December 31, 2020 Answer Noncash disclosure: Purchased a plant site by issuing capital stock

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

ndirect Method— Preparing a Statement of Cash Flows

Range Company has the following selected data from its annual period ended December 31, 2020.

Selected Data	Amount
Paid cash dividend	$20,000
Purchase of equipment	120,000
Increase in merchandise inventory	28,000
Borrowed on a long-term note	50,000
Acquired land as a future company site; paid in full by issuing 6,000 shares of Range capital stock, $10 par, when the market price per share was $15	?
Increase in prepaid expenses	6,000
Decrease in accounts receivable	14,000
Payment of bonds payable in full	194,000
Increase in accounts payable	10,000
Cash from disposal of equipment (sold at book value)	24,000
Decrease in rent receivable	4,000

Income Statement
For the Year Ended December 31, 2020
Sales revenue	$800,000
Rent revenue	20,000
Cost of goods sold	380,000
Depreciation expense	40,000
Remaining expenses	194,000
Net income	$206,000

Required

Prepare a statement of cash flows for the Range Company for the year ended December 31, 2020, using the indirect method. The beginning-year cash balance was $124,000.

Statement of Cash Flows
For the Year Ended December 31, 2020
Cash flows from operating activities
Net income	Answer
Adjustments:
Depreciation expense	Answer
Decrease in accounts receivable	Answer
Decrease in rent receivable	Answer
Increase in merchandise inventory	Answer
Increase in prepaid expenses	Answer
Increase in accounts payable	Answer
Net cash provided by operating activities	Answer
Cash flows from investing activities
Cash paid for acquisition of equipment	Answer
Cash received from sale of fixed assets	Answer
Net cash used by investing activities	Answer
Cash flows from financing activities
Cash received from long-term debt issuance	Answer
Cash paid on bond extinguishment	Answer
Cash paid for dividends	Answer
Net cash used by financing activities	Answer
Net increase in cash during 2020	Answer
Cash, January 1, 2020	Answer
Cash, December 31, 2020	Answer
Noncash disclosure:
Purchased a plant site by issuing capital stock	Answer

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