Fundamentals of Financial Accounting
5th Edition
ISBN: 9780078025914
Author: Fred Phillips Associate Professor, Robert Libby, Patricia Libby
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Question
Chapter 12, Problem 12.20E
1.
To determine
To prepare: The operating activities section of statement of
2.
To determine
To explain: The primary reasons behind the reporting of positive cash flow from operations despite having a net loss.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
The following are excerpts from Hamburg Company’s statement of cash flows and other financial records.
From Statement of Cash Flows:
Cash flows from operating activities
$220,309
Cash flows from investing activities
-32,336
Cash flows from financing activities
-23,618
From other records:
Capital expenditure costs
12,310
Cash dividend payments
11,146
Sales revenue
559,818
Total assets
337,149
Compute cash flows to sales ratio
Create a cashflow statement with the following
Please prepare a CashFlow Statement
Chapter 12 Solutions
Fundamentals of Financial Accounting
Ch. 12 - Compare the purposes of the income statement, the...Ch. 12 - Prob. 2QCh. 12 - Prob. 3QCh. 12 - What are the major categories of business...Ch. 12 - Prob. 5QCh. 12 - Describe the types of items used to compute cash...Ch. 12 - Under the indirect method, depreciation expense is...Ch. 12 - Prob. 8QCh. 12 - Explain why a 50,000 increase in inventory during...Ch. 12 - Prob. 10Q
Ch. 12 - As a junior analyst, you are evaluating the...Ch. 12 - Prob. 12QCh. 12 - Prob. 13QCh. 12 - Prob. 14QCh. 12 - (Supplement 12A) How is the sale of equipment...Ch. 12 - Prob. 1MCCh. 12 - Prob. 2MCCh. 12 - Prob. 3MCCh. 12 - Prob. 4MCCh. 12 - Which of the following would not appear in the...Ch. 12 - Prob. 6MCCh. 12 - Prob. 7MCCh. 12 - Prob. 8MCCh. 12 - The total change in cash as shown near the bottom...Ch. 12 - Prob. 10MCCh. 12 - Prob. 12.1MECh. 12 - Matching Items Reported to Cash Flow Statement...Ch. 12 - Determining the Effects of Account Changes on Cash...Ch. 12 - Computing Cash Flows from Operating Activities...Ch. 12 - Prob. 12.5MECh. 12 - Computing Cash Flows from Investing Activities...Ch. 12 - Computing Cash Flows from Financing Activities...Ch. 12 - Computing Cash Flows Under IFRS Using the data...Ch. 12 - Prob. 12.9MECh. 12 - Interpreting Cash Flows from Operating, Investing,...Ch. 12 - Matching Items Reported to Cash Flow Statement...Ch. 12 - Computing Cash Flows from Operating Activities...Ch. 12 - Prob. 12.13MECh. 12 - Matching items Reported to Cash Flow Statement...Ch. 12 - Prob. 12.2ECh. 12 - Prob. 12.3ECh. 12 - Prob. 12.4ECh. 12 - Prob. 12.5ECh. 12 - Prob. 12.6ECh. 12 - Prob. 12.7ECh. 12 - Prob. 12.8ECh. 12 - Reporting and Interpreting Cash Flows from...Ch. 12 - Prob. 12.10ECh. 12 - Prob. 12.11ECh. 12 - Inferring Balance Sheet Changes from the Cash Flow...Ch. 12 - Prob. 12.13ECh. 12 - Prob. 12.14ECh. 12 - Prob. 12.15ECh. 12 - Prob. 12.16ECh. 12 - Prob. 12.17ECh. 12 - Prob. 12.18ECh. 12 - Prob. 12.19ECh. 12 - Prob. 12.20ECh. 12 - Prob. 12.21ECh. 12 - Prob. 12.22ECh. 12 - (Supplement 12B) Preparing a Statement of Cash...Ch. 12 - Determining Cash Flow Statement Effects of...Ch. 12 - Prob. 12.2CPCh. 12 - Preparing a Statement of Cash Flows (Indirect...Ch. 12 - Preparing and Interpreting a Statement of Cash...Ch. 12 - Prob. 12.5CPCh. 12 - Prob. 12.6CPCh. 12 - (Supplement 12A) Preparing and Interpreting a...Ch. 12 - Prob. 12.1PACh. 12 - Prob. 12.2PACh. 12 - Prob. 12.3PACh. 12 - Preparing and Interpreting a Statement of Cash...Ch. 12 - Computing Cash Flows from Operating Activities...Ch. 12 - Prob. 12.6PACh. 12 - (Supplement 12A) Preparing and Interpreting a...Ch. 12 - Prob. 12.1PBCh. 12 - Prob. 12.2PBCh. 12 - Prob. 12.3PBCh. 12 - Preparing and Interpreting a Statement of Cash...Ch. 12 - Prob. 12.5PBCh. 12 - Prob. 12.6PBCh. 12 - Prob. 12.1SDCCh. 12 - Prob. 12.2SDCCh. 12 - Prob. 12.6SDCCh. 12 - Prob. 12.7SDCCh. 12 - Prob. 12.8SDCCh. 12 - Prob. 12.9SDCCh. 12 - Prob. 12.1CC
Knowledge Booster
Similar questions
- Use the following information from Birch Companys balance sheets to determine net cash flows from operating activities (indirect method), assuming net income for 2018 of $122,000.arrow_forwardUse the following excerpts from Indigo Companys balance sheets to determine net cash flows from operating activities (indirect method), assuming net income for 2018 of $225,000.arrow_forwardIn the current year, Harrisburg Corporation had net income of 35,000, a 9,000 decrease in accounts receivable, a 7,000 increase in inventory, an 8,000 increase in salaries payable, a 13,000 decrease in accounts payable, and 10,000 in depreciation expense. Using the indirect method, prepare the operating activities section of its statement of cash flows based on this information.arrow_forward
- Statement of Cash Flows The following are Mueller Companys cash flow activities: a. Net income, 68,000 b. Increase in accounts receivable, 4,400 c. Receipt from sale of common stock, 12,300 d. Depreciation expense, 11,300 e. Dividends paid, 24,500 f. Payment for purchase of building, 65,000 g. Bond discount amortization, 2,700 h. Receipt from sale of long-term investments at cost, 10,600 i. Payment for purchase of equipment, 8,000 j. Receipt from sale of preferred stock, 20,000 k. Increase in income taxes payable, 3,500 l. Payment for purchase of land, 9,700 m. Decrease in accounts payable, 2,900 n. Increase in inventories, 10,300 o. Beginning cash balance, 18,000 Required: Prepare Mueller Company's statement of cash flows.arrow_forwardWhich item is added to net income when computing cash flows from operating activities? a. Gain on the disposal of property, plant, and equipment b. Increase in wages payable c. Increase in inventory d. Increase in prepaid rent Use the following information for Multiple-Choice Questions 11-9 and 11-10: Cornett Company reported the following information: cash received from the issuance of common stock, $150,000; cash received from the sale of equipment, $14,800; cash paid to purchase an investment, $20,000; cash paid to retire a note payable, $50,000; and cash collected from sales to customers, $225,000.arrow_forwardUse the following information from Acorn Companys financial statements to determine operating net cash flows (indirect method).arrow_forward
- Financial data for Otto Company follow: a. Compute the ratio of cash to monthly cash expenses. b. Interpret the results computed in (a).arrow_forwardThe following information pertains to Peak Heights Company: Sales Expenses Cost of goods sold Salaries expense Net income Income Statement for Current Year $ 93,000 $ 51,875 Depreciation expense 6,000 12,000 69,875 $ 23,125 Partial Balance Sheet Current year Accounts receivable Inventory Salaries payable $ 10,500 13,000 2,250 Prior year $ 12,000 8,000 800 Required: Present the operating activities section of the statement of cash flows for Peak Heights Company using the indirect met Note: List cash outflows as negative amounts. PEAK HEIGHTS COMPANY Statement of Cash Flows (Partial)arrow_forwardPrepare the statement of operating activities section of the statement of cash flows for richcorp using the indirect methodarrow_forward
- Using the financial statements and additional information below, prepare a cash flow statement for Papa Ltd for the year ended 31st December 2018 using the indirect method of calculating operating cash flow and write a brief comment on the cash flow for the period. Papa Ltd Statement of Profit or Loss Account for the year ended 31st December 2018 GHC Revenue 540,000 Cost of sales (155,000) Gross profit 385,000 Investment income – interest received 15,000 Loss on disposal of equipment (18,000) Depreciation (94,000) Administrative and selling expenses (25,000) Operating profit before interest 263,000 Interest expense (10,000) Profit before taxation 253,000 Taxation (56,000) Profit after tax 197,000 Statement of financial position as at 31st December 2018 2017 GHC GHC Non-current assets Vehicle at cost 180,000 150,000 Accumulated depreciation (137,000)…arrow_forwardHampton Company reports the following Income Statement Data Sales Expenses: Cost of goods sold Salaries expense Depreciation expense Net income information for its recent calendar year. Selected Year-End Balance Sheet Data Accounts receivable increase Inventory decrease $78,000 36,000 Salaries payable increase 8,000 7,000 $27,000 Cash flows from operating activities Required: Prepare the operating activities section of the statement of cash flows using the indirect method. (Amounts to be deducted should be indicated with a minus sign.) Statement of Cash Flows (partial) $6,000 4,000 700 $arrow_forwardRequired:Prepare the cash flows from operating activities section of the statement of cash flows for Myriad Products Company using the direct method. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).)arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Financial AccountingAccountingISBN:9781305088436Author:Carl Warren, Jim Reeve, Jonathan DuchacPublisher:Cengage Learning
Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
Financial AccountingAccountingISBN:9781337272124Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
Financial Accounting
Accounting
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
Financial Accounting
Accounting
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning