Statement of Cash Flows—Indirect Method The following balances are available for Chrisman Company: December 31 2017 2016 Cash $12,200 $15,300 Accounts receivable 30,500 22,900 Inventory 24,200 40,400 Prepaid rent 13,700 9,200 Land 114,400 114,400 Plant and equipment 610,000 457,500 Accumulated depreciation (99,100) (45,800) Totals $705,900 $613,900 Accounts payable $18,300 $15,300 Income taxes payable 4,600 7,600 Short-term notes payable 53,400 38,100 Bonds payable 114,000 153,000 Common stock 305,000 228,800 Retained earnings 210,600 171,100 Totals $705,900 $613,900 Bonds were retired during 2017 at face value, plant and equipment were acquired for cash, and common stock was issued for cash. The depreciation expense for the year was $53,300. Net income was reported at $39,500. Required: 1. Prepare a statement of cash flows for 2017 using the indirect method in the Operating Activities section.
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
Statement of
The following balances are available for Chrisman Company:
|
December 31 |
|||
| 2017 | 2016 | ||
| Cash | $12,200 | $15,300 | |
| 30,500 | 22,900 | ||
| Inventory | 24,200 | 40,400 | |
| Prepaid rent | 13,700 | 9,200 | |
| Land | 114,400 | 114,400 | |
| Plant and equipment | 610,000 | 457,500 | |
| (99,100) | (45,800) | ||
| Totals | $705,900 | $613,900 | |
| Accounts payable | $18,300 | $15,300 | |
| Income taxes payable | 4,600 | 7,600 | |
| Short-term notes payable | 53,400 | 38,100 | |
| Bonds payable | 114,000 | 153,000 | |
| Common stock | 305,000 | 228,800 | |
| 210,600 | 171,100 | ||
| Totals | $705,900 | $613,900 |
Bonds were retired during 2017 at face value, plant and equipment were acquired for cash, and common stock was issued for cash. The depreciation expense for the year was $53,300. Net income was reported at $39,500.
Required:
1. Prepare a statement of cash flows for 2017 using the indirect method in the Operating Activities section. Use the minus sign to indicate cash payments,
| Chrisman Company | |
| Statement of Cash Flows | |
| For the Year Ended December 31, 2017 | |
| Cash Flows from Operating Activities | |
| $fill in the blank bb6c21f5103bfac_2 | |
| Adjustments to reconcile net income to net cash provided by operating activities: | |
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| $fill in the blank bb6c21f5103bfac_16 | |
| Cash Flows from Investing Activities | |
| $fill in the blank bb6c21f5103bfac_18 | |
| Cash Flows from Financing Activities | |
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| Cash balance, December 31, 2016 | fill in the blank bb6c21f5103bfac_29 |
| Cash balance, December 31, 2017 | $fill in the blank bb6c21f5103bfac_30 |
2. Based on its statement of cash flows, Chrisman
In addition to operating activities, Chrisman generated cash
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