Financial Accounting (12th Edition) (What's New in Accounting)
12th Edition
ISBN: 9780134725987
Author: C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr.
Publisher: PEARSON
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Question
Chapter 11, Problem 11.2S
To determine
To identify: The three things that could cause operating
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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
• .Noncash Transaction
Effect on Cash Flows.using the capital letter only:
• L.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.
What is the purpose of the statement of cash flows? Why would we want to convert accrual basis net income to cash basis when creating the statement of cash flows? Differentiate between these three activities: a) operating, b) financing, and c) investing. Provide at least two unique examples for each category
Net operational cash flow is a metric created by cash-basis accounting. Explain the metric in detail.
Chapter 11 Solutions
Financial Accounting (12th Edition) (What's New in Accounting)
Ch. 11 - Quick Check (Answers are given here) The statement...Ch. 11 - Prob. 2QCCh. 11 - Prob. 3QCCh. 11 - Which of the three types of activities reported on...Ch. 11 - Prob. 5QCCh. 11 - On the statement of cash flows, which of the...Ch. 11 - On the statement of cash flows, which of the...Ch. 11 - Prob. 8QCCh. 11 - Prob. 9QCCh. 11 - Which of the following transactions does not...
Ch. 11 - If the indirect method is used to calculate net...Ch. 11 - In 2018, Jubilee Company repurchased its own stock...Ch. 11 - Prob. 13QCCh. 11 - Prob. 14QCCh. 11 - Prob. 11.1ECCh. 11 - LO 1 (Learning Objective 1: Explain the purposes...Ch. 11 - Prob. 11.2SCh. 11 - Prob. 11.3SCh. 11 - Prob. 11.4SCh. 11 - (Learning Objective 2: Distinguish among...Ch. 11 - Prob. 11.6SCh. 11 - (Learning Objective 3: Prepare a statement of cash...Ch. 11 - Prob. 11.8SCh. 11 - (Learning Objective 3: Calculate financing cash...Ch. 11 - Prob. 11.10SCh. 11 - (Learning Objective 4: Calculate operating cash...Ch. 11 - Prob. 11.12SCh. 11 - Prob. 11.13SCh. 11 - Prob. 11.14SCh. 11 - Prob. 11.15AECh. 11 - (Learning Objectives 2, 3: Distinguish among...Ch. 11 - Prob. 11.17AECh. 11 - Prob. 11.18AECh. 11 - Prob. 11.19AECh. 11 - Prob. 11.20AECh. 11 - Prob. 11.21AECh. 11 - Prob. 11.22AECh. 11 - Prob. 11.23AECh. 11 - (Learning Objective 4: Prepare the statement of...Ch. 11 - Prob. 11.25AECh. 11 - Prob. 11.26BECh. 11 - (Learning Objectives 2, 3: Distinguish among...Ch. 11 - Prob. 11.28BECh. 11 - Prob. 11.29BECh. 11 - Prob. 11.30BECh. 11 - Prob. 11.31BECh. 11 - Prob. 11.32BECh. 11 - Prob. 11.33BECh. 11 - Prob. 11.34BECh. 11 - Prob. 11.35BECh. 11 - Prob. 11.36BECh. 11 - Prob. 11.37QCh. 11 - Prob. 11.38QCh. 11 - Prob. 11.39QCh. 11 - Prob. 11.40QCh. 11 - Prob. 11.41QCh. 11 - Prob. 11.42QCh. 11 - Prob. 11.43QCh. 11 - Prob. 11.44QCh. 11 - Prob. 11.45QCh. 11 - Prob. 11.46QCh. 11 - Prob. 11.47QCh. 11 - Prob. 11.48QCh. 11 - Prob. 11.49QCh. 11 - Prob. 11.50QCh. 11 - The book value of equipment sold during 2018 was...Ch. 11 - Prob. 11.52QCh. 11 - Prob. 11.53QCh. 11 - Prob. 11.54QCh. 11 - Prob. 11.55QCh. 11 - Prob. 11.56QCh. 11 - Prob. 11.57APCh. 11 - Prob. 11.58APCh. 11 - (Learning Objectives 2, 3: Prepare the statement...Ch. 11 - Prob. 11.60APCh. 11 - Prob. 11.61APCh. 11 - Prob. 11.62APCh. 11 - Prob. 11.63APCh. 11 - (Learning Objectives 2, 3, 4: Prepare the...Ch. 11 - Prob. 11.65APCh. 11 - Prob. 11.66BPCh. 11 - (Learning Objectives 2, 4: Prepare an income...Ch. 11 - (Learning Objectives 2, 3: Prepare the statement...Ch. 11 - Prob. 11.69BPCh. 11 - Prob. 11.70BPCh. 11 - Prob. 11.71BPCh. 11 - Prob. 11.72BPCh. 11 - Prob. 11.73BPCh. 11 - Prob. 11.74BPCh. 11 - Prob. 11.75CEPCh. 11 - Prob. 11.76CEPCh. 11 - Prob. 11.77CEPCh. 11 - Prob. 11.78SCCh. 11 - Prob. 11.79DCCh. 11 - Prob. 11.80DCCh. 11 - Ethical Issues Georgetown Motors is having a bad...Ch. 11 - Prob. 1FFCh. 11 - Prob. 1FA
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Similar questions
- Which of the following would be considered a cash outflow for investing activities? a. cash paid to purchase product for inventory b. cash paid to reacquire common stock c. cash paid to repay debt d. cash paid to purchase equipmentarrow_forwardReporting Net Cash Flow from Operating Activities The following information is available for Cornelius Inc: Required: 1. Compute the net cash flows from operating activities using the indirect method. 2. CONCEPTUAL CONNECTION Explain why Cornelius was able to report net cash flow from operating activities that was higher than net income. 3. CONCEPTUAL CONNECTION What could the difference between net income and cash flow from operating activities signal to financial statement users?arrow_forwardSelect the item that matches with the description. Descriptions Terms a. Begins with net income and then lists adjustments to net income in order to arrive at operating cash flows. b. Item included in net income, but excluded from net operating cash flows. C. Net cash flows from operating activities divided by average total assets. d. Cash transactions involving lenders and investors. e. Cash transactions involving net income. f. Cash transactions for the purchase and sale of long-term assets. g. Purchase of long-term assets by issuing stock to seller. h. Shows the cash inflows and outflows from operations such as cash received from customers and cash paid for inventory, salaries, rent, interest, and taxes. < Prev BURGMA 1 of 6 Next Darrow_forward
- Select the item that matches with the description. Descriptions a. Begins with net income and then lists adjustments to net income in order to arrive at operating cash flows. b. Item included in net income, but excluded from net operating cash flows. c. Net cash flows from operating activities divided by average total assets. d. Cash transactions involving lenders and investors. e. Cash transactions involving net income. f. Cash transactions for the purchase and sale of long-term assets. g. Purchase of long-term assets by issuing stock to seller. h. Shows the cash inflows and outflows from operations such as cash received from customers and cash paid for inventory, salaries, rent, interest, and taxes. Termsarrow_forwardUsing 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 .Investing Activity F.Financing Activity Ol.Operating and Investing Activity • .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 Increased accounts payable. Decreased inventory. Increased prepaid insurance. Earned a net income. Issued stock for cash. Retired long-term debt by issuing stock. Purchased a long-term investment with cash. Decreased interest payable. Decreased dividends receivable. Converted bonds to common stock.arrow_forwardRequire: • Cash Flow (should follow the given format)arrow_forward
- Define the 3 sections of the Cash flow Statement without copying straight from the text. - Cash from Operating Activities - Cash from Financing Activities - Cash from Investing Activitiesarrow_forwardPractice Help, please.arrow_forwardThe cash flow statement provides information on the cash that is obtained from operating activities, which are the core objects of an entity...” (Thomas, A. & Ward, A.M. 2019 pp576) You are required to discuss why the net cash from operations is different from the net profit and the impact which the management of working capital has on cash flow. Develop your response through more detailed discussion of the broad range of issues and considerations associated with the management of one element of working capital i.e. inventory, trade receivables or trade payables.arrow_forward
- a. which cash flow method presentation is easier to understand: direct or indirect? b. explain the three sections of the indirect method: operating, investing, & financing.arrow_forwardUsing indirect method, compute for the following: 1. net cash flow from operating activities 2. net cash flow from investing activities 3. net cash flow from financing activitiesarrow_forwardWhich of the following cash flows results from an operating activity? a. Paying dividends to stockholders b. Repaying note payable c. Receiving interest on investment d. Purchasing equipmentarrow_forward
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