PEACH COMPUTER Income Statement For the year ended December 31, 2021 Net sales $2,050,000 Expenses: Cost of goods sold Operating expenses Depreciation expense Income tax expense Total expenses $1,150,000 660,000 60,000 50,000 1,920,000 $ 130,000 Net income PEACH COMPUTER Selected Balance Sheet Data December 31 2021 2020 Increase (I) or Decrease (D) $112,000 $90,000 54,000 60,000 7,000 42,000 15,000 $22,000 (I) 8,000 (D) 25,000 (I) 3,000 (D) 13,000 (1) 9,000 (D) Cash Accounts receivable Inventory Prepaid rent Accounts payable Income tax payable 46,000 85,000 4,000 55,000 6,000

PEACH COMPUTER Income Statement For the year ended December 31, 2021 Net sales $2,050,000 Expenses: Cost of goods sold Operating expenses Depreciation expense Income tax expense Total expenses $1,150,000 660,000 60,000 50,000 1,920,000 $ 130,000 Net income PEACH COMPUTER Selected Balance Sheet Data December 31 2021 2020 Increase (I) or Decrease (D) $112,000 $90,000 54,000 60,000 7,000 42,000 15,000 $22,000 (I) 8,000 (D) 25,000 (I) 3,000 (D) 13,000 (1) 9,000 (D) Cash Accounts receivable Inventory Prepaid rent Accounts payable Income tax payable 46,000 85,000 4,000 55,000 6,000

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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Effects of all cash flows affect the balances of various accounts reported in the balance sheet. Also, the activities that cause some of these cash flows are reported in the income statement. What, then, is the need for an additional financial statement that reports cash flows?
What are the key steps in preparing the Statement of Cash Flows, using the indirect method? What are the advantages of using the indirect method for reporting cash flows from operating activities?
Using the following answer keys, you are to identify in which activity each of the transactions is classified and its effect on cash flows. Cash Flow Classification.using the capital letter only: . .Operating Activity • L.Investing Activity • F..Financing Activity • OL.Operating and Investing Activity • N.Noncash Transaction Effect on Cash Flows.using the capital letter only: • .Increase • D.Decrease N.No Effect Transaction Cash Flow Classification Effect on Cash Flows Paid a cash dividend. Decreased accounts receivable. Increased inventory. Retired long-term debt with cash. Sold long-term securities at a loss. Issued stock for equipment. Decreased prepaid insurance. Purchased treasury stock with cash. Retired a fully depreciated truck (no gain or loss). Transferred cash to money market account.
Select the item that matches with the description. Descriptions a. Begins with net income and then lists adjustments to net income in order to arrive at operating cash flows. b. Item included in net income, but excluded from net operating cash flows. c. Net cash flows from operating activities divided by average total assets. d. Cash transactions involving lenders and investors. e. Cash transactions involving net income. f. Cash transactions for the purchase and sale of long-term assets. g. Purchase of long-term assets by issuing stock to seller. h. Shows the cash inflows and outflows from operations such as cash received from customers and cash paid for inventory, salaries, rent, interest, and taxes. Terms
Use the following excerpts from Grenada Company’s financial records to determine net cash flows from operating activities and net cash flows from investing activities.
The two approaches to reporting cash flows provided by operating activities are the a. the liquidity and profitability methods. b. the basic and standard methods. c. direct and indirect methods. d. the gross margin and contribution margin methods.
abels and Amount Descriptions Instructions Labels Dec. 31, Dec. 31, December 31, 20Y3 20Y3 20Y2 For the Year Ended December 31, 20Y3 Amount Descriptions Assets 3 Cash $625,680.00 $586,230.00 Cash received from sale of investments 228,100.00 208,850.00 4 Accounts receivable (net) 5 Inventories Cash paid for purchase of land Cash paid for purchase of equipment Cash received from issuing common 640,910.00 617,650.00 0.00 240,620.00 6 Investments 7 Land 328,090.00 0,00 stock 704,540.00 553,320.00 8 Equipment 9 Accumulated depreciation-equipment Cash dividends (166,310.00) (147840.00) Decrease in accounts payable Decreașe in accounts receivable Decrease in accrued expenses payable 10 Total assets $2,361,010.00 $2,058,830.00 11 Liabilities and Stockholders' Equity $425,280.00 $404,550.00 52,020.00 12 Accounts payable Decrease in inventories 41,990.00 13 Accrued expenses payable Depreciation 24,190.00 20,170.00 14 Dividends payablie Gain on sale of investments 15 Common stock, $4 par…
On the statement of cash flows prepared by the indirect method, the Cash flows from operating activities section would include a. receipts from the sale of investments b. receipts from the issuance of capital stock c. gains or losses on fixed assets d. payments for cash dividends