The following information pertains to Peak Heights Company: Income Statement for Current Year Sales $ 85,200 Expenses Cost of goods sold Depreciation expense Salaries expense $51,875 7,400 11,800 71,075 $ 14,125 Net income Prior Partial Balance Sheet Accounts receivable Inventory Salaries payable Current year $10,900 S 14,200 13,800 1,580 year 8,600 970 Required: Present the operating activities section of the statement of cash fl outflows as negative amounts.)

The following information pertains to Peak Heights Company: Income Statement for Current Year Sales $ 85,200 Expenses Cost of goods sold Depreciation expense Salaries expense $51,875 7,400 11,800 71,075 $ 14,125 Net income Prior Partial Balance Sheet Accounts receivable Inventory Salaries payable Current year $10,900 S 14,200 13,800 1,580 year 8,600 970 Required: Present the operating activities section of the statement of cash fl outflows as negative amounts.)

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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Ravenna Company is a merchandiser using the indirect method to prepare the operating activities section of its statement of cash flows. Its balance sheet for this year is as follows: Ending Balance Beginning Balance Cash and cash equivalents $ 89,000 $ 106,750 Accounts receivable 71,500 77,000 Inventory 96,000 87,500 Total current assets 256,500 271,250 Property, plant, and equipment 255,000 245,000 Less accumulated depreciation 85,000 61,250 Net property, plant, and equipment 170,000 183,750 Total assets $ 426,500 $ 455,000 Accounts payable $ 56,000 $ 99,500 Income taxes payable 43,500 57,000 Bonds payable 105,000 87,500 Common stock 122,500 105,000 Retained earnings 99,500 106,000 Total liabilities and stockholders’ equity $ 426,500 $ 455,000 During the year, Ravenna paid a $10,500 cash dividend and sold a piece of equipment for $5,250 that originally cost $12,000 and had accumulated depreciation of $8,000. The company did not retire any bonds or…
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