Novak Corp's income statement for the year ended December 31, 2020, had the following condensed information: Service revenue $772,500 Operating expenses (excluding depreciation) Depreciation expense Unrealized loss on FV-NI investments Loss on sale of equipment Income before income taxes Income tax expense Net income FV-NI investments Accounts receivable Accounts payable Income tax payable There were no purchases or sales of trading (FV-NI) investments during 2020. Novak's statement of financial position included the following comparative data at December 31: 2020 $21,800 34,700 46,000 6,900 $494,000 61,000 4,500 12,000 2019 $26,300 54,500 32,100 9,200 eTextbook and Media Prepare the operating activities section of the statement of cash flows using the direct method. (Show amounts that decreas cash flow with either a-sign e.g.-15,000 or in parenthesis e.g. (15,000)) Novak Corp. Partial Statement of Cash Flows (Direct Method) For the Year Ended December 31, 2020 Cash Flows from Operating Activities Cash Received from Customers Cash Pald For Income Taxes 571,500 201,000 60,000 $141.000 Assume that Novak Corp's current cash debt coverage ratio in 2019 was 4.5. Calculate the company's current cash debt coverage ratio in 2020. (Round answer to 1 decimal places, eg. 7.5.) Cash Debt Coverage Ratio times
Novak Corp's income statement for the year ended December 31, 2020, had the following condensed information: Service revenue $772,500 Operating expenses (excluding depreciation) Depreciation expense Unrealized loss on FV-NI investments Loss on sale of equipment Income before income taxes Income tax expense Net income FV-NI investments Accounts receivable Accounts payable Income tax payable There were no purchases or sales of trading (FV-NI) investments during 2020. Novak's statement of financial position included the following comparative data at December 31: 2020 $21,800 34,700 46,000 6,900 $494,000 61,000 4,500 12,000 2019 $26,300 54,500 32,100 9,200 eTextbook and Media Prepare the operating activities section of the statement of cash flows using the direct method. (Show amounts that decreas cash flow with either a-sign e.g.-15,000 or in parenthesis e.g. (15,000)) Novak Corp. Partial Statement of Cash Flows (Direct Method) For the Year Ended December 31, 2020 Cash Flows from Operating Activities Cash Received from Customers Cash Pald For Income Taxes 571,500 201,000 60,000 $141.000 Assume that Novak Corp's current cash debt coverage ratio in 2019 was 4.5. Calculate the company's current cash debt coverage ratio in 2020. (Round answer to 1 decimal places, eg. 7.5.) Cash Debt Coverage Ratio times
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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Transcribed Image Text:Novak Corp's income statement for the year ended December 31, 2020, had the following condensed information:
Service revenue
Operating expenses (excluding depreciation)
Depreciation expense
Unrealized loss on FV-NI investments
Loss on sale of equipment
Income before income taxes
Income tax expense
Net income
FV-NI investments
Accounts receivable
Accounts payable
Income tax payable
2020
$21,800
34,700
46,000
6,900
There were no purchases or sales of trading (FV-NI) investments during 2020.
Novak's statement of financial position included the following comparative data at December 31:
Cash Pald For Income Taxes
$494,000
61,000
4,500
12,000
2019
$26,300
54,500
32,100
9,200
Novak Corp.
Partial Statement of Cash Flows (Direct Method)
For the Year Ended December 31, 2020
Cash Flows from Operating Activities
Cash Received from Customers
eTextbook and Media
Prepare the operating activities section of the statement of cash flows using the direct method. (Show amounts that decrease
cash flow with either a-sign e.g.-15,000 or in parenthesis e.g. (15,000).)
Cash Debt Coverage Ratio
$772,500
$
571,500
201,000
60,000
$141,000
times
$
$
Assume that Novak Corp's current cash debt coverage ratio in 2019 was 4.5. Calculate the company's current cash debt
coverage ratio in 2020. (Round answer to 1 decimal places, e.g. 7.5.)
I
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