Exercise 11 -9 (Algo) Calculate operating activities-indirect method (LO11-3) Portions ofthe financial statements for Peach Computer are provided below. PEACH COMPUTER IncomeStatement For the year ended December 31, 2024 Net sales $2,025, 000 Expenses: Cost ofgoods sold $1,140,000 Operating expenses 650,000 Depreciation expense 59,000 Incometax expense 49,000 Total expenses 1,898,000 Net income $127,000 PEACH COMPUTERSelected Balance Sheet Data December 31 2024 2023 Increase (1) or Decrease (D) Cash $111,000 $89,500 $21,500 (1) Accounts receivable 45, 900 53, 500 7,600 (D) Inventory84,000 59,500 24,500 (1) Prepaid rent 3, 900 6,800 2,900 (D) Accounts payable54,000 41, 500 12,500 (1) Income tax payable 5, 900 14, 500 8,600 (D) Required: Prepare theoperating activities section of the statement of cash flows for Peach Computer using theindirect method. (Amounts to be deducted should be indicated with a minus sign.)

The cash flow statement is a financial statement which shows the inflow and outflow of cash of the…

Answered: operating activities section of the…

Business

Accounting

operating activities section of the statement of cash flows

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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Dela Rosa Company Company The income statement for the year ended December 31, 2020, for Dela Rosa Company Comnany contains the following condensed information. Dela Rosa Company Company Income Statement For the Year Ended December 31, 2X20 Sales revenue P6,583,000 Cost of goods sold Operating expenses (excluding depreciation) Depreciation expense Loss on disposal of plant assets Income before income taxes Income tax expense Net income P2,810,000 2,086,000 880,000 24,000 5,800.000 783,000 353,000 P430,000 The P24,000 loss resulted from selling equipment for P270,000 cash. The equipment was purchased at a cost of P750,000. The following balances are reported on Dela Rosa's comparative balance sheets at December 31, Dela Rosa Company Company Comparative Balance Sheets Cash Accounts receivable Inventory Accounts payable 2X20 P672,000 775,000 834,000 521,000 2X19 P130,000 610,000 867,000 501,000 Income tax expense of P353,000 represents the amount paid in 2020. Dividends declared and paid…
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Mesflo Enterprise, Income Statement For the Year Ended 31st December, 2020 Sales $442 500 Cost of goods sold Operating expenses Interest expense Income tax expense Depreciation expense $225 000 162 000 5 250 11 250 18 000 (421 500) (4 500) Loss on sale of a plant asset Gain on retirement of debt Net Income 12 000 28 500 Additional Information 1. All sales were on credit 2. All purchases were on credit 3. Plant assets that cost $52 500 were purchased for $7 500 and issuing $45 000 of bonds payable to the seller 4. Plant assets with an original cost of $22 500 and accumulated depreciation of $9 000 were sold for $9 000 cash. The result was a loss of $4 500. 5. The proceeds from issuing 2 250 ordinary shares were $11 250. 6. The $12 000 gain on retirement of bonds resulted from paying $13 500 to retire bonds that had a book value of $25 500. 7. Cash dividends of $10 500 were declared and paid. Required: 1. Prepare a statement of cash flows that reports the cash inflows and outflows from…
Selected information about income statement accounts for the Reed Company is presented below (the company's fiscal year ends on December 31): Sales revenue Cost of goods sold Administrative expense Selling expense Interest revenue Interest expense Loss on sale of assets of discontinued component 2024 2023 $5,250,000 $4,350,000 2,170,000 3,030,000 970,000 845,000 530,000 472,000 167,000 157,000 234,000 Sales revenue Cost of goods sold Administrative expense Selling expense Operating income before taxes On July 1, 2024, the company adopted a plan to discontinue a division that qualifies as a component of an entity as defined by GAAP. The assets of the component were sold on September 30, 2024, for $116,000 less than their book value. Results of operations for the component (included in the above account balances) were as follows: 234,000 116,000 1/1/2024-9/30/2024 $ 570,000 (375,000) (67,000) (37,000) $ 91,000 2023 $ 670,000 (422,000) (57,000) (37,000) $ 154,000 In addition to the…
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Portions of the financial statements for Peach Computer are provided below. PEACH COMPUTER Income Statement For the year ended December 31, 2024 Net sales $1,750,000 Expenses: Cost of goods sold Operating expenses Depreciation expense Income tax expense Total expenses $1,030,000 540,000 48,000 38,000 1,656,000 $94,000 Net income PEACH COMPUTER Selected Balance Sheet Data December 31 Increase (I) or Decrease (D) $16,000 3,800 19,000 1,800 7,000 4,200 2024 2023 Cash Accounts receivable Inventory Prepaid rent Accounts payable Income tax payable $100,000 46,200 73,000 2,800 43,000 4,800 $84,000 50,000 54,000 4,600 36,000 9,000 (I) (D) (I) (D) (I) (D) Required: Prepare the operating activities section of the statement of cash flows for Peach Computer using the direct method. (Amounts to be deducted should be indicated with a minus sign.)
Below is financial information ($ values are in millions) in a model. Net income during the year for this company would be: Revenues SG&A Expenses Interest Expense Select one: OA. $4.5 million OB. $3.6 million O C. $16.6 million OD. $0.9 million $67.30 $4.70 $8.10 Cost of Goods Sold Depreciation Tax Rate $43.20 $6.80 20%
Dela Rosa Company Company The income statement for the year ended December 31, 2020, for Dela Rosa Company Company contains the following condensed information. Dela Rosa Company Company Income Statement For the Year Ended December 31, 2X20 Sales revenue P6,583,000 Cost of goods sold P2,810,000 Operating expenses (excluding depreciation) 2,086,000 Depreciation expense 880,000 Loss on disposal of plant assets 24,000 5,800,000 Income before income taxes 783,000 Income tax expense 353,000 Net income P430,000 The P24,000 loss resulted from selling equipment for P270,000 cash. The equipment was purchased at a cost of P750,000. The following balances are reported on Delar Rosa’s comparative balance sheets at December 31. Dela Rosa Company Company Comparative Balance Sheets 2X20 2X19 Cash P672,000 P130,000 Accounts receivable 775,000 610,000…
Statement of Profit and Loss and Other Comprehensive Income for the years ended 31 December 2024 2023 R'000 R'000 Turnover 1287052 934052 Operating Profit 137342 81768 Net Finance Cost 39264 20862 Operating Profit before taxation 98078 60906 Income tax expense 7027 3048 Profit for the Year 91051 57858 3502 2237 Operating profit includes Depreciation and loss on sale of fixed asset 5/12 Required: a) Prepare the cash flows from operating activities for the company for 2024 using the available information (10 Marks) b) Perform a financial review of the company based on calculating the following financial ratios and explain how it may be interpreted. Debt equity ratio Times interest earned Current ratio Debtors average collection period Inventory turnover Your answer should include an overall assessment of the company (25 Marks) c) List the audit steps to verify the existence of inventory (10 Marks)
KM Manufacturing Company The income statement for the year ended December 31, 2020, for KM Manufacturing Company contains the following condensed information. KM Manufacturing Company Income Statement For the Year Ended December 31, 2X20 Sales revenue Cost of goods sold Operating expenses (excluding depreciation) Depreciation expense Loss on disposal of plant assets Income before income taxes P6,583,000 P2,810,000 2,086,000 880,000 24,000 5,800,000 783,000 353,000 P430,000 Income tax expense Net income The P24,000 loss resulted from selling equipment for P270,000 cash. The equipment was purchased at a cost of P750,000. The following balances are reported on KM's comparative balance sheets at December 31. KM Manufacturing Company Comparative Balance Sheets 2X20 2X19 Cash Accounts receivable Inventory Accounts payable P672,000 775,000 834,000 521,000 P130,000 610,000 867,000 501,000 Income tax expense of P353,000 represents the amount paid in 2020. Dividends declared and paid in 2020…
KM Manufacturing Company The income statement for the year ended December 31, 2020, for KM Manufacturing Company contains the following condensed information. KM Manufacturing Company Income Statement For the Year Ended December 31, 2X20 Sales revenue Cost of goods sold Operating expenses (excluding depreciation) Depreciation expense Loss on disposal of plant assets Income before income taxes P6,583,000 P2,810,000 2,086,000 880,000 5,800,000 783,000 353,000 P430,000 24,000 Income tax expense Net income The P24,000 loss resulted from selling equipment for P270,000 cash. The equipment was purchased at a cost of P750,000. The following balances are reported on KM's comparative balance sheets at December 31. KM Manufacturing Company Comparative Balance Sheets Cash Accounts receivable Inventory | Accounts payable 2X20 P672,000 775,000 834,000 521,000 2X19 P130,000 610,000 867,000 501,000 Income tax expense of P353,000 represents the amount paid in 2020. Dividends declared and paid in 2020…