Useulate the cash flow from operating activities using the indirectmethod.AA. Statement of Cash Flows (Indirect Method) Use the following information regarding the SurpaCorporation to (a) prepare a statement of cash flows using the indirect method and (b) computeSurpa's operating-cash-flow -to-current-liabilities ratio.Accounts payable increase. .Accounts receivable increase. . .Accrued liabilities decrease . ..Amortization expense. .Cash balance, January 1.. .Cash balance, December 31..Cash paid as dividends ...Cash paid to purchase land . ..Cash paid to retire bonds payable at par. .Cash received from issuance of common stock...Cash received from sale of equipment . ..Depreciation expense. ..Gain on sale of equipment . . ..Inventory decrease. . .Net income. . ..am. . . $ 13,000..4,0006,0007,00021,00017,00031,00090,00060,00040,00017,00029,0007,00013,00078,0003,000140,000Prepaid expenses increase ...Average current liabilities. ..A. Cash FlowActivities (Indirect Method) The Azuza Company owns no plant as-

(a) Statement of cash flows is prepared as follows:

Answered: Use ulate the cash flow from operating…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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The primary objective of the statement of cash flows is to provide information about a company's: O Cash receipts and disbursements. O Noncash financing and investing activities. O Financial position. O Profitability.
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Which of the following items is deducted from net income to arrive at cash flow from operations when using the indirect method? a) Decrease in accounts payable b) Depreciation expense c) Amortization expense d) Decrease in accounts receivable
Which of the following sections from the statement of cash flows includes activities that affect current assets and current liabilities on the balance sheet? a. Investing b. None-cash investing and financing. c. Operating d. Financing
Which of the following describes the operating activities as shown in the statement of cash flows? a. Includes increases and decreases in long-term assets b. Includes transactions that primarily impact current assets and current liabilities c. Shows the beginning and ending balance of cash d. Includes transactions affecting the capitalization of the business
Classifying Items in the Statement of Cash Flows The following items are commonly reported in a statement of cash flows (indirect method presentation). For each item 1 through 20, determine (a) in which section the item is presented (operating, investing, or financing) and (b) whether the associated dollar amount is added or subtracted in the statement. (a) (b) 1. Payments of short-term debt. Answer Answer 2. Repurchases of common stock. Answer Answer 3. Purchases of property and equipment. Answer Answer 4. Sale of investments classified as long-term. Answer Answer 5. Proceeds from the issuance of common stock. Answer Answer 6. Increase in prepaid expenses and other current assets. Answer Answer 7. Acquisition for cash of a competitor. Answer Answer 8. Increase in current income tax payable. Answer Answer 9. Decrease in accounts payable. Answer Answer 10. Dividends paid to stockholders. Answer Answer 11.…
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What does letter B match with??
When using the indirect method of determining net cash flows from operating activities, how are revenues and expenses reported on the statement of cash flows if their cash effects are identical to the amounts reported in the income statement?
Identify the section of the statement of cash flows (a–d) where each of the following items would be reported. Operating activitiesFinancing activities Investing activities Schedule of noncash financing and investing Amortization of patent Sale of machinery held for use by the company Issuance of bond payable Purchase of the stock of another company as investment
Using the following answer keys, you are to identify in which activity each of the transactions is classified and its effect on cash flows. Cash Flow Classification.using the capital letter only: . .Operating Activity • L.Investing Activity • F..Financing Activity • OL.Operating and Investing Activity • N.Noncash Transaction Effect on Cash Flows.using the capital letter only: • .Increase • D.Decrease N.No Effect Transaction Cash Flow Classification Effect on Cash Flows Paid a cash dividend. Decreased accounts receivable. Increased inventory. Retired long-term debt with cash. Sold long-term securities at a loss. Issued stock for equipment. Decreased prepaid insurance. Purchased treasury stock with cash. Retired a fully depreciated truck (no gain or loss). Transferred cash to money market account.
3. Using the following answer keys, you are to identify in which activity each of the transactions is classified and its effect on cash flows. Cash Flow Classification...using the capital letter only: O...Operating Activity I...Investing Activity F...Financing Activity OI...Operating and Investing Activity N...Noncash Transaction Effect on Cash Flows...using the capital letter only: I...Increase D...Decrease N...No Effect Transaction Cash Flow Classification Effect on Cash Flows Declared and paid a cash dividend. Sold short-term trading securities at a gain. Retired fully depreciated equipment. Sold a machine at a loss. Purchased long-term available-for-sale securities. Decreased accounts receivable. Purchased 90-day Treasury bill. Incurred a net loss. Declared and issued a stock dividend. Sold treasury stock.

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