Financial Accounting
9th Edition
ISBN: 9781259738692
Author: Libby
Publisher: MCG
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Chapter 12, Problem 12.3ME
To determine
Indicate whether each transaction of Company A is disclosed as operating (O), investing (I) or financing (F) activity section of the statement of
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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.…
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.
Answer
Answer
2. Repurchases of common stock.
Answer
Answer
3. Purchases of property and equipment.
Answer
Answer
4. Sale of investments classified as long-term.
Answer
Answer
5. Proceeds from the issuance of common stock.
Answer
Answer
6. Increase in prepaid expenses and other current assets.
Answer
Answer
7. Acquisition for cash of a competitor.
Answer
Answer
8. Increase in current income tax payable.
Answer
Answer
9. Decrease in accounts payable.
Answer
Answer
10. Dividends paid to stockholders.
Answer
Answer
11.…
Prepare the statement of cash flows in good form usingINDIRECT METHOD. Be sure to provide a proper heading for thestatement. Thank you.
Chapter 12 Solutions
Financial Accounting
Ch. 12 - Prob. 1QCh. 12 - Prob. 2QCh. 12 - Prob. 3QCh. 12 - What are the major categories of business...Ch. 12 - Prob. 5QCh. 12 - Prob. 6QCh. 12 - Prob. 7QCh. 12 - Prob. 8QCh. 12 - Compare the two methods of reporting cash flows...Ch. 12 - Prob. 10Q
Ch. 12 - Prob. 11QCh. 12 - What are noncash investing and financing...Ch. 12 - Prob. 13QCh. 12 - Prob. 1MCQCh. 12 - Prob. 2MCQCh. 12 - Prob. 3MCQCh. 12 - Prob. 4MCQCh. 12 - Prob. 5MCQCh. 12 - Prob. 6MCQCh. 12 - Prob. 7MCQCh. 12 - Prob. 8MCQCh. 12 - Prob. 9MCQCh. 12 - Prob. 10MCQCh. 12 - Prob. 12.1MECh. 12 - Determining the Effects of Account Changes on Cash...Ch. 12 - Prob. 12.3MECh. 12 - Prob. 12.4MECh. 12 - Prob. 12.5MECh. 12 - Prob. 12.6MECh. 12 - Prob. 12.7MECh. 12 - Prob. 12.1ECh. 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 - Reporting and Interpreting Cash Flows from...Ch. 12 - Prob. 12.9ECh. 12 - Prob. 12.10ECh. 12 - Prob. 12.11ECh. 12 - Inferring Balance Sheet Changes from the Cash Flow...Ch. 12 - (Chapter Supplement B) Computing and Reporting...Ch. 12 - During the period, Sanchez Company sold some...Ch. 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 - (Chapter Supplement A) Reporting and Interpreting...Ch. 12 - Prob. 12.23ECh. 12 - Prob. 12.24ECh. 12 - Prob. 12.1PCh. 12 - Prob. 12.2PCh. 12 - Prob. 12.3PCh. 12 - Prob. 12.4PCh. 12 - Prob. 12.5PCh. 12 - (Chapter Supplement C) Preparing a Statement of...Ch. 12 - Prob. 12.1APCh. 12 - Prob. 12.2APCh. 12 - Prob. 12.3APCh. 12 - Prob. 12.1CONCh. 12 - Prob. 12.1CPCh. 12 - Prob. 12.2CPCh. 12 - Prob. 12.3CPCh. 12 - Prob. 12.4CPCh. 12 - Prob. 12.5CPCh. 12 - Prob. 12.6CP
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- Use the following information from Honolulu Companys financial statements to prepare the operating activities section of the statement of cash flows (indirect method) for the year 2018.arrow_forwardUse the following information from Dubuque Companys financial statements to prepare the operating activities section of the statement of cash flows (indirect method) for the year 2018.arrow_forwardUse the following information from Denmark Companys financial statements to determine operating net cash flows (indirect method).arrow_forward
- Use the following information from Isthmus Companys financial statements to prepare the operating activities section of the statement of cash flows (indirect method) for the year 2018.arrow_forwardPrepare the statement of cash flows using the indirect method of presenting cash flows from operating activitiesarrow_forwardQuestion Content Area A corporation uses the indirect method of preparing the statement of cash flows. A fixed asset has been sold for $26,330, representing a gain of $3,087. The value of this transaction appearing in the operating activities section of the statement of cash flows isarrow_forward
- STATEMENT OF CASH FLOWS An entity presented the following comparative financial information: 2018 2017 Property, plant and equipment 2,190,000 1,440,000 Accumulated depreciation 450,000 270,000 Long-term investments 225,000 - Prepaid expenses 351,000 315,000 Merchandise inventory 1,950,000 1,260,000 Accounts receivable, net of allowance 1,560,000 1,080,000 Cash 690,000 640,000 Share capital-ordinary 3,000,000 2,400,000 Retained earnings 906,000 688,000 Long-term note payable 1,275,000 1,095,000 Accounts payable 309,000 282,000 Dividend payable 201,000 - Accrued expenses 825,000 - 2018 2017 Net credit sales 7,020,000 3,753,000…arrow_forwardCalculate the operating cash index for the below quarter.arrow_forwardMadison Makeup reported the following on its most recent financial statements (in $ millions). Fill in the highlighted cells.arrow_forward
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