**Preparing a Cash Flow Statement Using the Direct Method**1. **Introduction** - Use the Direct Method to prepare a Cash Flow Statement. - Avoid using the Indirect Method. - Note: Not all accounts listed may be applicable to this example.2. **Financial Information** - **Net income:** $540,000 - **Cash as of December 31, 2020:** $120,000 - **Cash as of December 31, 2020 (Unknown):** ??????? - **Depreciation Expense:** $55,000 - **Collections from third party:** $411,000 - **Decrease in accounts payable:** $105,000 - **Paid employees:** $87,000 - **Purchased stock:** $22,000 - **Purchased land:** $99,000 - **Paid mortgage:** $60,000 - **Paid car loan:** $43,000 - **Paid for insurance:** $11,000 - **Patient Receivable:** $24,000This information is essential for learners to practice the preparation of cash flow statements using specified methods. Understanding which items to include and their impacts is crucial for accurate financial analysis.

Cash Flow Statement (Direct Method) Cash Flow from Operating Activities Amount (In $) Amount…

Prepare a Cash Flow Statement using the DIRECT Method. DO NOT use the INDIRECT Method Not all accounts listed may be used in this example Net income Cash December 31, 2020 s Cash December 31 2020 O Depreciation Expense o Collections from third party 1 Decrease in accounts payable 12 Paid employees 13 Purchased stock 14 Purchased land 15 Paid mortgage $540,000 $120,000 ??????? $55,000 $411,000 $105,000 $87,000 $22,000 $99,000 $60,000 16 Paid car loan $43,000 17 Paid for insurance $11,000 18 Patient Receivable $24,000.00 10

Prepare a Cash Flow Statement using the DIRECT Method. DO NOT use the INDIRECT Method Not all accounts listed may be used in this example Net income Cash December 31, 2020 s Cash December 31 2020 O Depreciation Expense o Collections from third party 1 Decrease in accounts payable 12 Paid employees 13 Purchased stock 14 Purchased land 15 Paid mortgage $540,000 $120,000 ??????? $55,000 $411,000 $105,000 $87,000 $22,000 $99,000 $60,000 16 Paid car loan $43,000 17 Paid for insurance $11,000 18 Patient Receivable $24,000.00 10

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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↓ The following table shows the projected free cash flows of an acquisition target. The potential acquirer wants to estimate its maximum acquisition price at an 8 percent discount rate and a terminal value in year 5 based on the perpetual growth equation with a 4 percent perpetual growth rate. Year Free cash flow 1 -950 2 3 -475 0 4 290 a. Estimate the target's maximum acquisition price. Note: Do not round intermediate calculations. Round your answer to the nearest whole dollar amount. > Answer is complete but not entirely correct. Maximum acquisition price $ 8,640 x 5 880 b. Estimate the target's maximum acquisition price when the discount rate is 7 percent and the perpetual growth rate is 5 percent. Note: Do not round intermediate calculations. Round your answer to the nearest whole dollar amount. X Answer is complete but not entirely correct. Maximum acquisition price $ 46,921 X
Balance Sheet for Bearcat Hathaway, 2022 2021 2022 Cash Accounts. Receivable $5,268,485 $10,268,485 Inventory $529,062 $696,685 Current Assets $8,371,777 $13,279,842 Less $2,574,230 $2,314,672 Gross Fixed Assets $16,251,665 $20,567,330 Accum.Depreciation Total Assets $7,460,897 $10,117,819 Accounts Payable Notes. Payable Current Liabilities Calculate the net working capital in 2022. Long Termi Debt Total Liabilities, None of these options are correct $10,572,740 $5,664,675 $8,854,338 $3,946,273 Total $17,162,545 $23,729,353 Liabilities and Equity Capital Surplus Retained. Earnings 2021 2022 $1,673,992 $2,438,271 Common Net Fixed Assets $8,790,768 $10,449,511 Stock ($0.50 $1,300,000 $1,600,000 par) $1,033,110 $1,987,233 $2,707,102 $4,425,504 $9,242,830 $11,468,302 $11,949,932 $15,893,806 $1,148,120 $1,800,969 $2,764,493 $4,434,578 $17,162,545 $23,729,353
Use the following excerpts from Brownstone Company's financial statements and complete the worksheet below to determine cash received from customers in 2018. From Balance Sheets Accounts Receivable Dec. 31, 2018 S 25,000 Dec. 31, 2017 $20,000 From Income Statement: Sales 2018 220,000 PLEASE NOTE: You are to follow the format shown in the textbook. Cash Collected from Sales Revenue | Select ) [ Select ] | Select ] [ Select ] [ Select ] [ Select ] [ Select ] [ Select ] [ Select ] [ Select ] > > > > > > > >
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Question 13 Prepare a statement of cash flows in good form assuming that Avatar Company uses the indirect method. Please refer to the following information for the year 2021. Avatar Company Balance Sheet December 31, 2021 2021 2020 Change Cash $21,000 $18,000 $3,000 Accounts receivable 31,000 35,000 (4,000) Inventory 53,000 25,000 28,000 Property, Plant & Equipment (net) 120,000 90,000 30,000 Total assets $225,000 $168,000 $57,000 Accounts payable $4,000 $6,000 $(2,000) Accrued liabilities 2,000 1,000 1,000 Long-term notes payable 84,000 90,000 (6,000) Total liabilities $90,000 $97,000 $(7,000)…
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Cash Flow Data for Interceptors, Incorporated. 2018 2019 2020 2018 Beginning Cash $ 35 $ 40 $ 45 $ 50 Cash from Operations $ 127 $ 125 $ 122 $ 117 Net Capital Spending ($ 140) ($ 130) ($ 140) ($ 145) Cash from Financing $ 18 $ 15 $ 23 Ending Cash $ 40 $ 45 $ 50 $ 55 Based on the cash flow data in the table for Interceptors Incorporated, which of the following statements is (are) correct? 1. This firm appears to be a good investment because of its steady growth in cash. 2. This firm has been able to generate growing cash flows only by borrowing or selling equity to offset declining operating cash flows. 3. Financing activities have been increasingly important for this firm's operations, at least in the short run.
Given this information: 2019 2020 2019 2020 Cash $6,100 $4,800 Accounts payable $2,100 $2,200 Accounts receivable $2,400 $1,50O Utilities payable $800 $1,100 Inventory $6,000 $5,800 Unearned revenue $4,000 $1,000 Prepaid rent $1,200 $400 Note payable $16,000 $13,000 Land $36,000 $40,000 Interest payable $600 $1,000 Equipment $18,000 $18,000 Common stock $12,000 $12,000 Accumulated depreciation ($1,200) ($2,200) Retained earnings $33,000 $38,000 $68,500 $68,300 $68,500 $68,300 How much were cash flows from financing activities if net income was $12,000 during 2020? ($3,000) ($10,000) ($7,000) ($4,000) None of the above
service revenue (all cash) $175 operrating expenses saleries (all cash) $85 Net income $90 2020 2019 current assets cash $1,250 $1,600 short- term investment 100 200 $1,350 $1,800 Liabilities Borrowings 600 1,000 Stockholder's Equity Common Stock 200 300 Retained Earnings 550 500 750 800 $1,350 $1,800 Other information: short-term investments are riskless and will…
STATEMENT OF CASH FLOWS
C O O O Using a perpetual inventory system, how should a company record the sale of inventory costing $540 for $1,100 on account? Inventory Cost of Goods Sold Sales Revenue Accounts Receivable Accounts Receivable. Sales Revenue Accounts Payable Inventory Inventory Gain. Sales Revenue O Accounts Receivable. Sales Revenues. Gain O None of these answer choices are correct. ! 1 F1 Click Save and Submit to save and submit. Click Save All Answers to save all answers. Q A 2 N I F2 W #3 3 80 F3 E X $ 4 S D a F4 R C 1,100 LL 1,100 сторо 540 5 J *540 1,100 F 540 560 F5 T V ^ 6 540 1,100 1,100 540 1,100 MacBook Air G 540 560 F6 Y & 7 B J F7 H * 00 U 8 DII FB J N ( 9 1 F9 K M ) Save All Answers O O F10 <
RITTER CORPORATION Income Statement 2021 Revenue Expenses $ 860 620 Depreciation 101 Net income $ 139 Dividends $ 119 RITTER CORPORATION Balance Sheet December 31 2020 2021 Assets Cash $66 $ 87 Other current assets 176 192 Net fixed assets Total assets Liabilities and Equity Accounts payable 381 401 $ 623 $ 680 Long-term debt Stockholders' equity $ 126 $ 147 151 167 346 366 $ 680 Total liabilities and equity $623 a. What is the change in cash during 2021? b. Determine the change in net working capital in 2021. c. Determine the cash flow generated by the firm's assets during 2021. a. Change in cash b. Change in net working capital c. Cash flow from assets