Financial Accounting
4th Edition
ISBN: 9781259307959
Author: J. David Spiceland, Wayne M Thomas, Don Herrmann
Publisher: McGraw-Hill Education
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Chapter 11, Problem 11.3AP
To determine
Statement of
Statement of cash flow is a financial statement that shows the cash and cash equivalents of a company for a particular period of time. It shows the net changes in cash, by reporting the sources and uses of cash as a result of operating, investing, and financing activities of a company.
Cash flows from operating activities:
These refer to the cash received or cash paid in day-to-day operating activities of a company.
Indirect method of cash flow from operating activities: Under this method, the following amounts are to be adjusted from the Net Income to calculate the net cash provided from operating activities.
- Deduct increase in current assets
- Deduct decrease in current liabilities
- Add decrease in current assets
- Add the increase in current liability
- Add
depreciation expense and amortization expense - Add loss on sale of plant assets
- Less gain on sale of plant assets
To prepare: The operating activities section of the statement of cash flow of Technologies A.
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Portions of the financial statements for Alliance Technologies are provided below.
ALLIANCE TECHNOLOGIES
Income Statement
For the year ended December 31, 2021
Net sales
$
298,000
Expenses:
Cost of goods sold
$
178,000
Operating expenses
53,000
Depreciation expense
15,300
Income tax expense
18,500
Total expenses
264,800
Net income
$
33,200
ALLIANCE TECHNOLOGIES
Selected Balance Sheet Data
December 31, 2021, compared to December 31, 2020
Decrease in accounts receivable
$
5,300
Increase in inventory
12,300
Decrease in prepaid rent
8,300
Increase in salaries payable
4,300
Decrease in accounts payable
7,300
Increase in income tax payable
17,200
Prepare the operating activities section of the statement of cash flows for Alliance Technologies using the indirect method. (List cash outflows and any…
Portions of the financial statements for Software Associates are provided below.
SOFTWARE ASSOCIATESIncome StatementFor the year ended December 31, 2021
Net sales
$
609,000
Expenses:
Cost of goods sold
$
369,000
Operating expenses
119,000
Depreciation expense
31,900
Income tax expense
43,500
Total expenses
563,400
Net income
$
45,600
SOFTWARE ASSOCIATES
Selected Balance Sheet Data
December 31, 2021, compared to December 31, 2020
Decrease in accounts receivable
$
8,900
Decrease in inventory
11,900
Increase in prepaid rent
1,900
Decrease in salaries payable
2,900
Increase in accounts payable
5,900
Increase in income tax payable
6,900
Prepare the operating activities section of the statement of cash flows for Software Associates using the indirect method. (List cash outflows and any decrease in cash as…
Portions of the financial statements for Software Associates are provided below.
SOFTWARE ASSOCIATESIncome StatementFor the year ended December 31, 2021
Net sales
$650,000
Expenses:
Cost of goods sold
$390,000
Operating expenses
124,000
Depreciation expense
32,400
Income tax expense
46,000
Total expenses
592,400
Net income
$57,600
SOFTWARE ASSOCIATES
Selected Balance Sheet Data
December 31, 2021, compared to December 31, 2020
Decrease in accounts receivable
$9,400
Decrease in inventory
12,400
Increase in prepaid rent
2,400
Decrease in salaries payable
3,400
Increase in accounts payable
6,400
Increase in income tax payable
7,400
Required:
Prepare the operating activities section of the statement of cash flows for Software Associates using the direct method. (List cash outflows as negative amounts.)
SOFTWARE ASSOCIATES
Statement of Cash Flow (Partial)
For the Year Ended December 31, 2021…
Chapter 11 Solutions
Financial Accounting
Ch. 11 - 1.Identify and briefly describe the three...Ch. 11 - Prob. 2RQCh. 11 - Explain what we mean by noncash activities and...Ch. 11 - Why is it necessary to use an income statement,...Ch. 11 - Prob. 5RQCh. 11 - Prob. 6RQCh. 11 - Distinguish between the indirect method and the...Ch. 11 - Prob. 8RQCh. 11 - Prob. 9RQCh. 11 - 10.Explain how we report depreciation expense in...
Ch. 11 - Describe how we report a gain or loss on the sale...Ch. 11 - Prob. 12RQCh. 11 - Prob. 13RQCh. 11 - Prob. 14RQCh. 11 - Prob. 15RQCh. 11 - Prob. 16RQCh. 11 - Prob. 17RQCh. 11 - Prob. 18RQCh. 11 - Prob. 19RQCh. 11 - 20.Why do we exclude depreciation expense and the...Ch. 11 - Classify each of the following items as an...Ch. 11 - Prob. 11.2BECh. 11 - Prob. 11.3BECh. 11 - Prob. 11.4BECh. 11 - Prob. 11.5BECh. 11 - Prob. 11.6BECh. 11 - Prob. 11.7BECh. 11 - Creative Sound Systems sold investments, land, and...Ch. 11 - Prob. 11.9BECh. 11 - Prob. 11.10BECh. 11 - Prob. 11.11BECh. 11 - Prob. 11.12BECh. 11 - Electronic Superstores inventory increases during...Ch. 11 - Prob. 11.14BECh. 11 - Computer World reports income tax expense of...Ch. 11 - Prob. 11.1ECh. 11 - Prob. 11.2ECh. 11 - Determine proper classification (LO111) Analysis...Ch. 11 - Prob. 11.4ECh. 11 - Prob. 11.5ECh. 11 - Prob. 11.6ECh. 11 - Technology Solutions format for the statement of...Ch. 11 - Prob. 11.8ECh. 11 - Prob. 11.9ECh. 11 - Prob. 11.10ECh. 11 - Prob. 11.11ECh. 11 - Prob. 11.12ECh. 11 - Prob. 11.13ECh. 11 - Prob. 11.14ECh. 11 - The income statement for Electronic Wonders...Ch. 11 - Prob. 11.1APCh. 11 - Prob. 11.2APCh. 11 - Prob. 11.3APCh. 11 - Prob. 11.4APCh. 11 - Cyberdyne Systems and Virtucon are competitors...Ch. 11 - Prob. 11.6APCh. 11 - Prob. 11.7APCh. 11 - Prob. 11.8APCh. 11 - Prob. 11.1BPCh. 11 - Prob. 11.2BPCh. 11 - Prob. 11.3BPCh. 11 - Preparing statement of cash flowsindirect method...Ch. 11 - International Genetic Technologies (InGen) and The...Ch. 11 - Prob. 11.6BPCh. 11 - Prob. 11.7BPCh. 11 - Cash flows from operating activities for both the...Ch. 11 - Great Adventures (This is a continuation of the...Ch. 11 - Prob. 11.2APFACh. 11 - Prob. 11.3APFACh. 11 - American Eagle Outfitters, Inc. vs. The Buckle,...Ch. 11 - Prob. 11.5APECh. 11 - Prob. 11.6APIRCh. 11 - Written Communication Why cant we pay our...Ch. 11 - Prob. 11.8APEM
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