Statement of cash flows 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: 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 determine: the amount of net cash provided by operating activities of Incorporation A.

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Answer 1

Question

Chapter 12, Problem 12.1EYCT

(a)

To determine

Statement of cash flows

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: 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 determine: the amount of net cash provided by operating activities of Incorporation A.

(b)

To determine

the amount of amount of increase or decrease in cash and cash equivalents of Incorporation A.

(c)

To determine

the method of computing net cash provided by operating activities of Incorporation A.

(d)

To determine

the amount of increase or decrease in Accounts receivable, inventory and accounts payable.

(e)

To determine

the amount of net cash used by investing activities of Incorporation A.

(f)

To determine

the amount of interest paid and amount of income taxes paid of Incorporation A.

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Grass Reed Bayou is a bottling company in The Netherlands. The company uses a normal costing system in which factory overhead is applied on the basis of direct labor costs. Budgeted factory overhead for the year was $680,000, and management budgeted $320,000 of direct labor costs. During the year, the company incurred the following actual costs. Direct materials used $ 382,000 Direct labor 313,000 Factory overhead 650,700 The January 1 balances of inventory accounts are shown below. Materials-all direct $ 64,000 Work-in-process 41,400 Finished goods 25,600 The December 31 balances of these inventory accounts were ten percent lower than the balances at the beginning of the year. The cost of goods manufactured during the year is:

Magna Carta Interiors is a job-order manufacturer. The company uses a predetermined overhead rate based on direct labor hours to apply overhead to individual jobs. For the current year, estimated direct labor hours are 150,000 and estimated factory overhead is $1,140,000. The following information is for September. Job X was completed during September, while Job Y was started but not finished. September 1, inventories: Materials $ 25,700 Work-in-process (All Job X) 55,100 Finished goods 107,300 Materials purchases $ 174,000 Direct materials requisitioned: Job X $ 75,700 Job Y 69,700 Direct labor hours: Job X 8,700 Job Y 7,200 Labor costs incurred: Direct labor ($7.70 per hour) $ 122,430 Indirect labor 50,100 Factory supervisory salaries 12,800 Rental costs: Factory $ 11,000 Administrative offices 4,900 Total equipment depreciation costs: Factory $ 12,100 Administrative offices 4,500 Indirect materials used $ 30,400 The total…

Grass Reed Bayou is a bottling company in The Netherlands. The company uses a normal costing system in which factory overhead is applied on the basis of direct labor costs. Budgeted factory overhead for the year was $680,000, and management budgeted $320,000 of direct labor costs. During the year, the company incurred the following actual costs. Direct materials used $ 382,000Direct labor 313,000Factory overhead 650,700The January 1 balances of inventory accounts are shown below. Materials-all direct $ 64,000Work-in-process 41,400Finished goods 25,600The December 31 balances of these inventory accounts were ten percent lower than the balances at the beginning of the year. The cost of goods manufactured during the year is:

Answer 2

Question

Chapter 12, Problem 12.1EYCT

(a)

To determine

Statement of cash flows

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: 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 determine: the amount of net cash provided by operating activities of Incorporation A.

(b)

To determine

the amount of amount of increase or decrease in cash and cash equivalents of Incorporation A.

(c)

To determine

the method of computing net cash provided by operating activities of Incorporation A.

(d)

To determine

the amount of increase or decrease in Accounts receivable, inventory and accounts payable.

(e)

To determine

the amount of net cash used by investing activities of Incorporation A.

(f)

To determine

the amount of interest paid and amount of income taxes paid of Incorporation A.

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Answer 3

Question

Chapter 12, Problem 12.1EYCT

(a)

To determine

Statement of cash flows

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: 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 determine: the amount of net cash provided by operating activities of Incorporation A.

(b)

To determine

the amount of amount of increase or decrease in cash and cash equivalents of Incorporation A.

(c)

To determine

the method of computing net cash provided by operating activities of Incorporation A.

(d)

To determine

the amount of increase or decrease in Accounts receivable, inventory and accounts payable.

(e)

To determine

the amount of net cash used by investing activities of Incorporation A.

(f)

To determine

the amount of interest paid and amount of income taxes paid of Incorporation A.

Expert Solution & Answer

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Answer 4

Question

Chapter 12, Problem 12.1EYCT

(a)

To determine

Statement of cash flows

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: 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 determine: the amount of net cash provided by operating activities of Incorporation A.

(b)

To determine

the amount of amount of increase or decrease in cash and cash equivalents of Incorporation A.

(c)

To determine

the method of computing net cash provided by operating activities of Incorporation A.

(d)

To determine

the amount of increase or decrease in Accounts receivable, inventory and accounts payable.

(e)

To determine

the amount of net cash used by investing activities of Incorporation A.

(f)

To determine

the amount of interest paid and amount of income taxes paid of Incorporation A.

Expert Solution & Answer

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Answer 5

Chapter 12, Problem 12.1EYCT

(a)

To determine

Statement of cash flows

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: 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 determine: the amount of net cash provided by operating activities of Incorporation A.

(b)

To determine

the amount of amount of increase or decrease in cash and cash equivalents of Incorporation A.

(c)

To determine

the method of computing net cash provided by operating activities of Incorporation A.

(d)

To determine

the amount of increase or decrease in Accounts receivable, inventory and accounts payable.

(e)

To determine

the amount of net cash used by investing activities of Incorporation A.

(f)

To determine

the amount of interest paid and amount of income taxes paid of Incorporation A.

Answer 6

Chapter 12, Problem 12.1EYCT

(a)

To determine

Statement of cash flows

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: 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 determine: the amount of net cash provided by operating activities of Incorporation A.

Answer 7

Chapter 12, Problem 12.1EYCT

(a)

To determine

Statement of cash flows

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: 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 determine: the amount of net cash provided by operating activities of Incorporation A.

Answer 8

(b)

To determine

the amount of amount of increase or decrease in cash and cash equivalents of Incorporation A.

Answer 9

(b)

To determine

the amount of amount of increase or decrease in cash and cash equivalents of Incorporation A.

Answer 10

(c)

To determine

the method of computing net cash provided by operating activities of Incorporation A.

Answer 11

(c)

To determine

the method of computing net cash provided by operating activities of Incorporation A.

Answer 12

(d)

To determine

the amount of increase or decrease in Accounts receivable, inventory and accounts payable.

Answer 13

(d)

To determine

the amount of increase or decrease in Accounts receivable, inventory and accounts payable.

Answer 14

(e)

To determine

the amount of net cash used by investing activities of Incorporation A.

Answer 15

(e)

To determine

the amount of net cash used by investing activities of Incorporation A.

Answer 16

(f)

To determine

the amount of interest paid and amount of income taxes paid of Incorporation A.

Answer 17

(f)

To determine

the amount of interest paid and amount of income taxes paid of Incorporation A.

Answer 18

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Answer 19

Expert Solution & Answer

Answer 20

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Answer 21

Ch. 12 - Prob. 1Q Ch. 12 - Prob. 2Q Ch. 12 - Prob. 3Q Ch. 12 - Prob. 4Q Ch. 12 - Prob. 5Q Ch. 12 - Prob. 6Q Ch. 12 - Why is it necessary to use comparative balance...Ch. 12 - Prob. 8Q Ch. 12 - Prob. 9Q Ch. 12 - Prob. 10Q

Solution Summary: The author explains how Incorporation A uses the "Indirect method" for computing the net cash provided by operating activities.

the amount of amount of increase or decrease in cash and cash equivalents of Incorporation A.

the method of computing net cash provided by operating activities of Incorporation A.

the amount of increase or decrease in Accounts receivable, inventory and accounts payable.

the amount of net cash used by investing activities of Incorporation A.

the amount of interest paid and amount of income taxes paid of Incorporation A.

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Chapter 12 Solutions