(a) Introduction: Statements of cash flows are the statements that help in determining how the changes in balance sheet and income statement affect the cash and cash equivalents. Operating activities, investing activities and financing activities are the three activities reported on the statement of cash flows. To report: The amount related to inventory that is deducted by each company on the income statement.

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Answer 1

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 12, Problem 14E

To determine

(a)

Introduction:

Statements of cash flows are the statements that help in determining how the changes in balance sheet and income statement affect the cash and cash equivalents. Operating activities, investing activities and financing activities are the three activities reported on the statement of cash flows.

To report:

The amount related to inventory that is deducted by each company on the income statement.

To determine

(b)

Introduction:

Statements of cash flows are the statements that help in determining how the changes in balance sheet and income statement affect the cash and cash equivalents. Operating activities, investing activities and financing activities are the three activities reported on the statement of cash flows.

To report:

The amount spent by the company related to inventory purchased with cash and on account.

To determine

(c)

Introduction:

Statements of cash flows are the statements that help in determining how the changes in balance sheet and income statement affect the cash and cash equivalents. Operating activities, investing activities and financing activities are the three activities reported on the statement of cash flows.

To report:

The difference between cost of goods sold and total cash paid for inventory.

To determine

(d)

Introduction:

Statements of cash flows are the statements that help in determining how the changes in balance sheet and income statement affect the cash and cash equivalents. Operating activities, investing activities and financing activities are the three activities reported on the statement of cash flows.

To report:

The changes in company’s inventory and accounts payable.

To determine

(e)

Introduction:

The indirect method helps the company to convert accrual basis of accounting to cash basis by adjusting the net income. It can be done by adding back non-cash expenses such as depreciation on fixed asset, amortization, bad debts written off and any losses on the sale of a fixed asset and by subtracting net income such as profit from sale of asset, dividend received.

To report:

The amount that needs to be added or deducted from net income under indirect method.

To determine

(f)

Introduction:

Statements of cash flows are the statements that help in determining how the changes in balance sheet and income statement affect the cash and cash equivalents. Operating activities, investing activities and financing activities are the three activities reported on the statement of cash flows.

To state:

If there is any resemblance between requirement 3 and 5 with reason.

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Consolidation after Several Years On January 1, 2016, Adams Corporation acquired all of the stock of Baker Company. The fair value of Adams’ shares used in the exchange was $37,500,000. At the time of acquisition, the book value of Baker’s shareholders’ equity was $5,000,000, and the book value of Baker’s building (25-year life) exceeded its fair value by $1,000,000. From the date of acquisition to December 31, 2021, Baker had cumulative net income of $1,300,000. For 2022, Baker reported net income of $300,000. Adams uses the complete equity method to account for its investment in Baker. There is no goodwill impairment loss for the period 2016 through 2021, but there is impairment loss of $100,000 in 2022. Baker declared no dividends during the period 2016–2022. Required Prepare the working paper eliminating entries necessary to consolidate the financial statements of Adams and Baker at December 31, 2022. Enter numerical answers using all zeros (do not abbreviate in thousands or in…

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Answer 2

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Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 12, Problem 14E

To determine

(a)

Introduction:

Statements of cash flows are the statements that help in determining how the changes in balance sheet and income statement affect the cash and cash equivalents. Operating activities, investing activities and financing activities are the three activities reported on the statement of cash flows.

To report:

The amount related to inventory that is deducted by each company on the income statement.

To determine

(b)

Introduction:

Statements of cash flows are the statements that help in determining how the changes in balance sheet and income statement affect the cash and cash equivalents. Operating activities, investing activities and financing activities are the three activities reported on the statement of cash flows.

To report:

The amount spent by the company related to inventory purchased with cash and on account.

To determine

(c)

Introduction:

Statements of cash flows are the statements that help in determining how the changes in balance sheet and income statement affect the cash and cash equivalents. Operating activities, investing activities and financing activities are the three activities reported on the statement of cash flows.

To report:

The difference between cost of goods sold and total cash paid for inventory.

To determine

(d)

Introduction:

Statements of cash flows are the statements that help in determining how the changes in balance sheet and income statement affect the cash and cash equivalents. Operating activities, investing activities and financing activities are the three activities reported on the statement of cash flows.

To report:

The changes in company’s inventory and accounts payable.

To determine

(e)

Introduction:

The indirect method helps the company to convert accrual basis of accounting to cash basis by adjusting the net income. It can be done by adding back non-cash expenses such as depreciation on fixed asset, amortization, bad debts written off and any losses on the sale of a fixed asset and by subtracting net income such as profit from sale of asset, dividend received.

To report:

The amount that needs to be added or deducted from net income under indirect method.

To determine

(f)

Introduction:

Statements of cash flows are the statements that help in determining how the changes in balance sheet and income statement affect the cash and cash equivalents. Operating activities, investing activities and financing activities are the three activities reported on the statement of cash flows.

To state:

If there is any resemblance between requirement 3 and 5 with reason.

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Answer 3

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 12, Problem 14E

To determine

(a)

Introduction:

Statements of cash flows are the statements that help in determining how the changes in balance sheet and income statement affect the cash and cash equivalents. Operating activities, investing activities and financing activities are the three activities reported on the statement of cash flows.

To report:

The amount related to inventory that is deducted by each company on the income statement.

To determine

(b)

Introduction:

Statements of cash flows are the statements that help in determining how the changes in balance sheet and income statement affect the cash and cash equivalents. Operating activities, investing activities and financing activities are the three activities reported on the statement of cash flows.

To report:

The amount spent by the company related to inventory purchased with cash and on account.

To determine

(c)

Introduction:

Statements of cash flows are the statements that help in determining how the changes in balance sheet and income statement affect the cash and cash equivalents. Operating activities, investing activities and financing activities are the three activities reported on the statement of cash flows.

To report:

The difference between cost of goods sold and total cash paid for inventory.

To determine

(d)

Introduction:

Statements of cash flows are the statements that help in determining how the changes in balance sheet and income statement affect the cash and cash equivalents. Operating activities, investing activities and financing activities are the three activities reported on the statement of cash flows.

To report:

The changes in company’s inventory and accounts payable.

To determine

(e)

Introduction:

The indirect method helps the company to convert accrual basis of accounting to cash basis by adjusting the net income. It can be done by adding back non-cash expenses such as depreciation on fixed asset, amortization, bad debts written off and any losses on the sale of a fixed asset and by subtracting net income such as profit from sale of asset, dividend received.

To report:

The amount that needs to be added or deducted from net income under indirect method.

To determine

(f)

Introduction:

Statements of cash flows are the statements that help in determining how the changes in balance sheet and income statement affect the cash and cash equivalents. Operating activities, investing activities and financing activities are the three activities reported on the statement of cash flows.

To state:

If there is any resemblance between requirement 3 and 5 with reason.

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Answer 4

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 12, Problem 14E

To determine

(a)

Introduction:

Statements of cash flows are the statements that help in determining how the changes in balance sheet and income statement affect the cash and cash equivalents. Operating activities, investing activities and financing activities are the three activities reported on the statement of cash flows.

To report:

The amount related to inventory that is deducted by each company on the income statement.

To determine

(b)

Introduction:

Statements of cash flows are the statements that help in determining how the changes in balance sheet and income statement affect the cash and cash equivalents. Operating activities, investing activities and financing activities are the three activities reported on the statement of cash flows.

To report:

The amount spent by the company related to inventory purchased with cash and on account.

To determine

(c)

Introduction:

Statements of cash flows are the statements that help in determining how the changes in balance sheet and income statement affect the cash and cash equivalents. Operating activities, investing activities and financing activities are the three activities reported on the statement of cash flows.

To report:

The difference between cost of goods sold and total cash paid for inventory.

To determine

(d)

Introduction:

Statements of cash flows are the statements that help in determining how the changes in balance sheet and income statement affect the cash and cash equivalents. Operating activities, investing activities and financing activities are the three activities reported on the statement of cash flows.

To report:

The changes in company’s inventory and accounts payable.

To determine

(e)

Introduction:

The indirect method helps the company to convert accrual basis of accounting to cash basis by adjusting the net income. It can be done by adding back non-cash expenses such as depreciation on fixed asset, amortization, bad debts written off and any losses on the sale of a fixed asset and by subtracting net income such as profit from sale of asset, dividend received.

To report:

The amount that needs to be added or deducted from net income under indirect method.

To determine

(f)

Introduction:

Statements of cash flows are the statements that help in determining how the changes in balance sheet and income statement affect the cash and cash equivalents. Operating activities, investing activities and financing activities are the three activities reported on the statement of cash flows.

To state:

If there is any resemblance between requirement 3 and 5 with reason.

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Answer 5

Chapter 12, Problem 14E

To determine

(a)

Introduction:

Statements of cash flows are the statements that help in determining how the changes in balance sheet and income statement affect the cash and cash equivalents. Operating activities, investing activities and financing activities are the three activities reported on the statement of cash flows.

To report:

The amount related to inventory that is deducted by each company on the income statement.

To determine

(b)

Introduction:

Statements of cash flows are the statements that help in determining how the changes in balance sheet and income statement affect the cash and cash equivalents. Operating activities, investing activities and financing activities are the three activities reported on the statement of cash flows.

To report:

The amount spent by the company related to inventory purchased with cash and on account.

To determine

(c)

Introduction:

Statements of cash flows are the statements that help in determining how the changes in balance sheet and income statement affect the cash and cash equivalents. Operating activities, investing activities and financing activities are the three activities reported on the statement of cash flows.

To report:

The difference between cost of goods sold and total cash paid for inventory.

To determine

(d)

Introduction:

Statements of cash flows are the statements that help in determining how the changes in balance sheet and income statement affect the cash and cash equivalents. Operating activities, investing activities and financing activities are the three activities reported on the statement of cash flows.

To report:

The changes in company’s inventory and accounts payable.

To determine

(e)

Introduction:

The indirect method helps the company to convert accrual basis of accounting to cash basis by adjusting the net income. It can be done by adding back non-cash expenses such as depreciation on fixed asset, amortization, bad debts written off and any losses on the sale of a fixed asset and by subtracting net income such as profit from sale of asset, dividend received.

To report:

The amount that needs to be added or deducted from net income under indirect method.

To determine

(f)

Introduction:

Statements of cash flows are the statements that help in determining how the changes in balance sheet and income statement affect the cash and cash equivalents. Operating activities, investing activities and financing activities are the three activities reported on the statement of cash flows.

To state:

If there is any resemblance between requirement 3 and 5 with reason.

Answer 6

Chapter 12, Problem 14E

To determine

(a)

Introduction:

Statements of cash flows are the statements that help in determining how the changes in balance sheet and income statement affect the cash and cash equivalents. Operating activities, investing activities and financing activities are the three activities reported on the statement of cash flows.

To report:

The amount related to inventory that is deducted by each company on the income statement.

Answer 7

Chapter 12, Problem 14E

To determine

(a)

Introduction:

Statements of cash flows are the statements that help in determining how the changes in balance sheet and income statement affect the cash and cash equivalents. Operating activities, investing activities and financing activities are the three activities reported on the statement of cash flows.

To report:

The amount related to inventory that is deducted by each company on the income statement.

Answer 8

To determine

(b)

Introduction:

Statements of cash flows are the statements that help in determining how the changes in balance sheet and income statement affect the cash and cash equivalents. Operating activities, investing activities and financing activities are the three activities reported on the statement of cash flows.

To report:

The amount spent by the company related to inventory purchased with cash and on account.

Answer 9

To determine

(b)

Introduction:

Statements of cash flows are the statements that help in determining how the changes in balance sheet and income statement affect the cash and cash equivalents. Operating activities, investing activities and financing activities are the three activities reported on the statement of cash flows.

To report:

The amount spent by the company related to inventory purchased with cash and on account.

Answer 10

To determine

(c)

Introduction:

Statements of cash flows are the statements that help in determining how the changes in balance sheet and income statement affect the cash and cash equivalents. Operating activities, investing activities and financing activities are the three activities reported on the statement of cash flows.

To report:

The difference between cost of goods sold and total cash paid for inventory.

Answer 11

To determine

(c)

Introduction:

Statements of cash flows are the statements that help in determining how the changes in balance sheet and income statement affect the cash and cash equivalents. Operating activities, investing activities and financing activities are the three activities reported on the statement of cash flows.

To report:

The difference between cost of goods sold and total cash paid for inventory.

Answer 12

To determine

(d)

Introduction:

Statements of cash flows are the statements that help in determining how the changes in balance sheet and income statement affect the cash and cash equivalents. Operating activities, investing activities and financing activities are the three activities reported on the statement of cash flows.

To report:

The changes in company’s inventory and accounts payable.

Answer 13

To determine

(d)

Introduction:

Statements of cash flows are the statements that help in determining how the changes in balance sheet and income statement affect the cash and cash equivalents. Operating activities, investing activities and financing activities are the three activities reported on the statement of cash flows.

To report:

The changes in company’s inventory and accounts payable.

Answer 14

To determine

(e)

Introduction:

The indirect method helps the company to convert accrual basis of accounting to cash basis by adjusting the net income. It can be done by adding back non-cash expenses such as depreciation on fixed asset, amortization, bad debts written off and any losses on the sale of a fixed asset and by subtracting net income such as profit from sale of asset, dividend received.

To report:

The amount that needs to be added or deducted from net income under indirect method.

Answer 15

To determine

(e)

Introduction:

The indirect method helps the company to convert accrual basis of accounting to cash basis by adjusting the net income. It can be done by adding back non-cash expenses such as depreciation on fixed asset, amortization, bad debts written off and any losses on the sale of a fixed asset and by subtracting net income such as profit from sale of asset, dividend received.

To report:

The amount that needs to be added or deducted from net income under indirect method.

Answer 16

To determine

(f)

Introduction:

Statements of cash flows are the statements that help in determining how the changes in balance sheet and income statement affect the cash and cash equivalents. Operating activities, investing activities and financing activities are the three activities reported on the statement of cash flows.

To state:

If there is any resemblance between requirement 3 and 5 with reason.

Answer 17

To determine

(f)

Introduction:

Statements of cash flows are the statements that help in determining how the changes in balance sheet and income statement affect the cash and cash equivalents. Operating activities, investing activities and financing activities are the three activities reported on the statement of cash flows.

To state:

If there is any resemblance between requirement 3 and 5 with reason.

Answer 18

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Answer 19

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Answer 20

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Answer 21

Ch. 12 - Compare the purposes of the income statement, the...Ch. 12 - What information does the statement of cash flows...Ch. 12 - Prob. 3Q Ch. 12 - What are the major categories of business...Ch. 12 - Prob. 5Q Ch. 12 - Prob. 6Q Ch. 12 - Prob. 7Q Ch. 12 - Prob. 8Q Ch. 12 - Prob. 9Q Ch. 12 - Prob. 10Q

Solution Summary: The author explains that statements of cash flows help in determining how the changes in balance sheet and income statement affect the cash and cash equivalents.

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Chapter 12 Solutions