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
Concept explainers
Videos
Textbook Question
Chapter 12, Problem 12.2ME
Matching Items Reported to Cash Flow Statement Categories (Indirect Method)
The Buckle, Inc., included the following in its statement of
______ 1. Purchase of investments.
______ 2. Proceeds from issuance of stock.
______ 3. Purchase of equipment.
______ 4.
______ 5. Accounts payable (decrease).
______ 6. Inventory (increase).
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
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.
AnswerOperatingInvestingFinancing
AnswerAddSubtract
2. Repurchases of common stock.
AnswerOperatingInvestingFinancing
AnswerAddSubtract
3. Purchases of property and equipment.
AnswerOperatingInvestingFinancing
AnswerAddSubtract
4. Sale of investments classified as long-term.
AnswerOperatingInvestingFinancing
AnswerAddSubtract
5. Proceeds from the issuance of common stock.
AnswerOperatingInvestingFinancing
AnswerAddSubtract
6. Increase in prepaid expenses and other current assets.
AnswerOperatingInvestingFinancing
AnswerAddSubtract
7. Acquisition for cash of a competitor.…
Which of the following is included in the cash flows from financing activities
section of the statement of cash flows?
Multiple Choice
Purchase of investments.
Interest expense.
Purchase of treasury stock.
Sale of equipment.
Interest revenue.
Identify the section of the statement of cash flows (a–d) where each of the following items would be reported.a. Operating activitiesb. Financing activitiesc. Investing activitiesd. Schedule of noncash financing and investing
Increase in income taxes payable
Where does this will be on the cash flow 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
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- When preparing the operating section of the statement of cash flows, using the indirect method, how must gains and losses be handled? Why?arrow_forwardUse the following information from Jumper Companys financial statements to determine operating net cash flows (indirect method).arrow_forwardWhat categories of activities are reported on the statement of cash flows? Does it matter in what order these sections are presented?arrow_forward
- What adjustment(s) should be made to reconcile net income to net cash flows from operating activities (indirect method) considering the following balances in current assets?arrow_forwardClassification of Cash Flows A company's statement of cash flows and the accompanying schedule of investing and financing activities not affecting cash may contain the following major sections: a. Operating Activities b. Investing Activities c. Financing Activities d. Investing and Financing Activities not Affecting Cash The following is a list of items that might appear on a company's statement of cash flows or in the accompanying schedule. Required: Using the letters A through D, indicate in which section of the statement of cash flows (or the accompanying schedule) the preceding item would most likely be classified. After each letter, indicate with a plus (+) or a minus () whether the item would be reported on the statement (or the accompanying schedule).arrow_forwardUse the following information from Albuquerque Companys financial statements to determine operating net cash flows (indirect method).arrow_forward
- Explain the difference between the two methods used to prepare the operating section of the statement of cash flows. How do the results of these two approaches compare?arrow_forwardUse the following excerpts from Eagle Companys financial records to determine net cash flows from financing activities.arrow_forwardPreparing Net Cash Flows from Operating Activities-Direct Method Colassard Industries has the following data available for preparation of its statement of cash flows: Required: Prepare the cash flows from operating activities section of the statement of cash flows using the direct method.arrow_forward
- Classification of Cash Flows Patel Company reported the following items in its statement of cash flows presented using the indirect method. a. Issuance of common stock b. Cash paid for interest c. Sold equipment for cash d. Receipt of cash dividend on investment e. Repayment of principal on long-term debt f. Loss on disposal of equipment. Required: Indicate whether each item should be classified as a cash flow from operating activities, a cash flow from investing activities, a cash flow from financing activities. Use the following information for Cornerstone Exercises 11-16 and 11-17: A review of the balance sheet of Peterson Inc. revealed the following changes in the account balances: a. Increase in long-term investment b Increase in accounts receivable c. Increase in common stock d. Increase in long-term debt e. Decrease in accounts payable f. Decrease in supplies inventory g. Increase in prepaid insurance h. Decrease in retained earningsarrow_forwardClassification of Cash Flows The following are several items that might be disclosed on a companys statement of cash flows presented using the indirect method. a. Net income b. Depreciation expense c. Issuance of common stock d. Loss on disposal of equipment e. Purchase of a building f. Decrease in accounts payable g. Converted bonds into common stock h. Sale of long-term investment i. Payment of interest j. Increase in inventory Required: 1. Indicate whether each item should be classified as a cash flow from operating activities, cash flow from investing activities, cash flow from financing activities, or noncash investing and financing activity. 2. CONCEPTUAL CONNECTION Why is the proper classification of cash flows important?arrow_forwardIndicate for each of the following what should be disclosed on a statement of cash flows (SCF) (indirect method). If not disclosed, select "Not shown." If an item is a noncash transaction that should be shown separately, select "noncash." If an item is added to net income, select "Add," and if an item is deducted from net income, select "Deduct." Show financing and investing outflows in parentheses. For example, an answer might be: Deduct $4,700 or Investing ($31,000). There is more than one answer for some items. Statement of Cash Flows (Indirect Method) Disclosure Effect on Net Income Effect on Cash Flows (a) For 2021, income before an extraordinary loss was $402,500. A tornado damaged a building and its contents. The proceeds from insurance companies totaled $118,500, which was $50,500 less than the book values. The tax rate was 30%.…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage Learning
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
Financial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Financial Accounting: The Impact on Decision Make...
Accounting
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
Financial And Managerial Accounting
Accounting
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:Cengage Learning,
The KEY to Understanding Financial Statements; Author: Accounting Stuff;https://www.youtube.com/watch?v=_F6a0ddbjtI;License: Standard Youtube License