The cash flows from (used for) operating activities are reported by the direct method on the statement of cash flows. Determine the following: a. If sales for the current year were $617,100 and accounts receivable decreased by $44,400 during the year, what was the amount of cash received from customers? b. If income tax expense for the current year was $37,100 and income tax payable decreased by $4,200 during the year, what was the amount of cash paid for income taxes? c. Briefly explain why the cash received from customers in part (a) is different from sales. Because the customers paid v than the amount of sales for the period, cash received from customers v sales made on account by $44,400 during the current year.
The cash flows from (used for) operating activities are reported by the direct method on the statement of cash flows. Determine the following: a. If sales for the current year were $617,100 and accounts receivable decreased by $44,400 during the year, what was the amount of cash received from customers? b. If income tax expense for the current year was $37,100 and income tax payable decreased by $4,200 during the year, what was the amount of cash paid for income taxes? c. Briefly explain why the cash received from customers in part (a) is different from sales. Because the customers paid v than the amount of sales for the period, cash received from customers v sales made on account by $44,400 during the current year.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Cash Flows from (Used for) Operating Activities-Direct Method
The cash flows from (used for) operating activities are reported by the direct method on the statement of cash flows. Determine the following:
a. If sales for the current year were $617,100 and accounts receivable decreased by $44,400 during the year, what was the amount of cash received from customers?
b. If income tax expense for the current year was $37,100 and income tax payable decreased by $4,200 during the year, what was the amount of cash paid for income taxes?
c. Briefly explain why the cash received from customers in part (a) is different from sales.
Because the customers paid
than the amount of sales for the period, cash received from customers
v sales made on account by $44,400 during the current year.
Transcribed Image Text:Financing Activities on the Statement of Cash Flows
Cosmat Inc. reported net income of $128,000 for 20Y9. The liability and equity accounts from the company's comparative balance sheet are as follows:
Dec. 31, 20Y9
Dec. 31, 20Y8
Accounts payable
$57,920
$53,810
Dividends payable
20,000
16,000
Bonds payable
290,000
450,000
Common stock, $10 par value
180.000
120,000
Paid-in capital in excess of par-common stock
328,000
232,000
Retained earnings
488,000
375,000
During the year, the company retired bonds payable at their face amount, declared dividends of $15,000, and issued 6,000 shares of common stock for $26 per share.
Prepare the Cash Flows from (used for) Financing Activities section of the statement of cash flows. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments.
Cosmat Inc.
Statement of Cash Flows (partial)
Cash flows from (used for) financing activities:
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