# Statement of Cash Flows (partial)## Cash flows from operating activities:- [Dropdown menu]## Adjustments to reconcile net income to net cash flows from (used for) operating activities:- [Dropdown menu]### Changes in current operating assets and liabilities:- [Dropdown menu]- [Dropdown menu]- [Dropdown menu]- [Dropdown menu]- [Dropdown menu]## Net cash flow from operating activities:- [Dollar amount field] ---b. Cash flows from operating activities differ from net income because it does not use the [Dropdown menu] of accounting. For example, revenues are recorded on the income statement when [Dropdown menu]. ## Explanation of Diagrams:There are no specific diagrams or graphs in this section. The content includes structured dropdown menus and input fields intended for educational examples or exercises related to the computation of cash flows and accounting principles. The section aims to teach the difference between operational cash flows and net income, highlighting the accounting methods involved. **Cash Flows from (Used for) Operating Activities**The net income reported on the income statement for the current year was $141,300. Depreciation recorded on store equipment for the year amounted to $23,300. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows:| | End of Year | Beginning of Year ||----------------------|-------------|-------------------|| Cash | $55,390 | $50,400 || Accounts receivable (net) | 39,710 | 37,250 || Merchandise inventory | 54,230 | 56,700 || Prepaid expenses | 6,090 | 4,790 || Accounts payable (merchandise creditors) | 51,900 | 47,680 || Wages payable | 28,360 | 31,150 |**Instructions:**a. Prepare the Cash Flows from (used for) Operating Activities section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments.

Definition: Statement of cash flows: This statement reports all the cash transactions which are responsible for inflow and outflow of cash, and the result of these transactions is reported as the ending balance of cash at the end of the reported period. The statement of cash flows includes the changes in cash balance due to operating, investing, and financing activities. Operating activities include cash inflows and outflows from business operations. Investing activities include cash inflows and cash outflows from the purchase and sale of land or equipment, or investments. Financing activities include cash inflows and outflows from the issuance of common stock and debt, payment of the debt, and dividends.a. Working note: Calculate the increase or decrease in current assets and current liabilities. b. The cash flow from operating activities differs from the net income it does not use the accrual basis of accounting. For example, revenues are recorded on the income statement when the revenues are generated from the goods delivered or service performed to the customer, but cash is not yet received from the customer.

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Accounting

Statement of Cash Flows (partial) Cash flows from operating activities: Adjustments to reconcile net income to net cash flows from (used for) operating activities: Changes in current operating assets and liabilities: Net cash flow from operating activities . Cash flows from operating activities differ from net income because it does not use the of accounting. For e: re recorded on the income statement when

Statement of Cash Flows (partial) Cash flows from operating activities: Adjustments to reconcile net income to net cash flows from (used for) operating activities: Changes in current operating assets and liabilities: Net cash flow from operating activities . Cash flows from operating activities differ from net income because it does not use the of accounting. For e: re recorded on the income statement when

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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If the indirect method is used to calculate net cash provided by operating activities, adecrease in accounts receivable isa. added to net income.b. subtracted from net income.c. ignored since it does not affect net income.d. ignored since it does not affect expenses.
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Concept introduction: Cash flow statement: Cash Flow statement: The Cash flow statement shows the movement of cash during a particular period. The Cash flows are categorized into three categories as follows: * Cash flows from operating activities. * cash flows from investing activities. * Cash flows from financing activities. To choose: The false statement regarding the statement of cash flows.
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Cash Flows from (Used for) Operating Activities The net income reported on the income statement for the current year was $73,600. Depreciation recorded on store equipment for the year amounted to $27,400. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: Cash Accounts receivable (net) Merchandise inventory Prepaid expenses Accounts payable (merchandise creditors) Wages payable End of Year $23,500 56,000 35,500 4,750 21,800 4,900 Beginning of Year $18,700 48,000 40,000 7,000 16,800 5,800 a. Prepare the Cash Flows from (used for) Operating Activities section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash outflows, cash
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Which of the following would be subtracted from net income when using the indirect method to derive net cash from operating activities? a. Decrease in accounts payable b. Loss on sale of investments c. Decrease in accounts receivable d. Depreciation expense
In a statement of cash flows using indirect method, an increase ininventory is A. deducted from Net IncomeB. reported as an outflow of cashC. added to net incomeD. no effect on cash flows