Determine the net cash provided by operating activities.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 12, Problem 1MCQ

To determine

Determine the net cash provided by operating activities.

Expert Solution & Answer

Answer to Problem 1MCQ

The correct answer is Option (b) $23,550 provided by operating activities.

Explanation of Solution

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.

Indirect method: Under indirect method, net income is reported first, and then non-cash expenses, losses from fixed assets, and changes in opening balances and ending balances of current assets are adjusted to reconcile the net income balance.

Prepare the statement of cash flows of a Company for the year under indirect method.

Company
Statement of cash flows (Partial)
For the year ended
Particulars	Amount	Amount
Cash flow from operating activities:
Net Income		$15,200
Adjustment to reconcile net income to net cash flow from operating activities:
Income statement items not affecting cash:
Add: Depreciation expense	$10,000
Less: Gain on sale of plant assets	($3,000)
Changes in current assets and liabilities
Add: Increase in accounts payable	$2,850
Less: Increase in inventory	($1,500)	$8,350
Net cash flows from operating activities		$23,550

Table (1)

From the above explanation, Option (a), (c), (d) and (e) are incorrect answers. So, the correct answer is Option (b).

Conclusion

Hence, the correct answer is Option (b) $23,550 provided by operating activities.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

Theron Interiors manufactures handcrafted cabinetry and uses a process costing system. During the month of October, the company started Production on 720 units and completed 590 units. The remaining 120 units were 60% complete in terms of materials and 40% complete in terms of labor and overhead. The total cost incurred during the month was $45,000 for materials and $31,200 for labor and overhead. Using the weighted-average method, what is the equivalent unit cost for materials and conversion costs (labor and overhead)?

General Accounting

Kamala Khan has to decide between the following two options: Take out a student loan of $70,000 and study accounting full time for the next three years. The interest on the loan is 4% per year payable annually. The principle is to be paid in full after ten years. Study part time and work part time to earn $15,000 per year for the following six years. Once Kamala graduates, she estimates that she will earn $30,000 for the first three years and $40,000 the next four years. Kamala's banker says the market interest for a ten-year horizon is 6%. Required Calculate NPV of the ten-year cash flows of the two options. For simplification assume that all cash flows happen at year-end. Based on the NPV which of the two options is better for Kamala?

Answer 2

Question

Chapter 12, Problem 1MCQ

To determine

Determine the net cash provided by operating activities.

Expert Solution & Answer

Answer to Problem 1MCQ

The correct answer is Option (b) $23,550 provided by operating activities.

Explanation of Solution

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.

Indirect method: Under indirect method, net income is reported first, and then non-cash expenses, losses from fixed assets, and changes in opening balances and ending balances of current assets are adjusted to reconcile the net income balance.

Prepare the statement of cash flows of a Company for the year under indirect method.

Company
Statement of cash flows (Partial)
For the year ended
Particulars	Amount	Amount
Cash flow from operating activities:
Net Income		$15,200
Adjustment to reconcile net income to net cash flow from operating activities:
Income statement items not affecting cash:
Add: Depreciation expense	$10,000
Less: Gain on sale of plant assets	($3,000)
Changes in current assets and liabilities
Add: Increase in accounts payable	$2,850
Less: Increase in inventory	($1,500)	$8,350
Net cash flows from operating activities		$23,550

Table (1)

From the above explanation, Option (a), (c), (d) and (e) are incorrect answers. So, the correct answer is Option (b).

Conclusion

Hence, the correct answer is Option (b) $23,550 provided by operating activities.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 12, Problem 1MCQ

To determine

Determine the net cash provided by operating activities.

Expert Solution & Answer

Answer to Problem 1MCQ

The correct answer is Option (b) $23,550 provided by operating activities.

Explanation of Solution

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.

Indirect method: Under indirect method, net income is reported first, and then non-cash expenses, losses from fixed assets, and changes in opening balances and ending balances of current assets are adjusted to reconcile the net income balance.

Prepare the statement of cash flows of a Company for the year under indirect method.

Company
Statement of cash flows (Partial)
For the year ended
Particulars	Amount	Amount
Cash flow from operating activities:
Net Income		$15,200
Adjustment to reconcile net income to net cash flow from operating activities:
Income statement items not affecting cash:
Add: Depreciation expense	$10,000
Less: Gain on sale of plant assets	($3,000)
Changes in current assets and liabilities
Add: Increase in accounts payable	$2,850
Less: Increase in inventory	($1,500)	$8,350
Net cash flows from operating activities		$23,550

Table (1)

From the above explanation, Option (a), (c), (d) and (e) are incorrect answers. So, the correct answer is Option (b).

Conclusion

Hence, the correct answer is Option (b) $23,550 provided by operating activities.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 12, Problem 1MCQ

To determine

Determine the net cash provided by operating activities.

Expert Solution & Answer

Answer to Problem 1MCQ

The correct answer is Option (b) $23,550 provided by operating activities.

Explanation of Solution

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.

Indirect method: Under indirect method, net income is reported first, and then non-cash expenses, losses from fixed assets, and changes in opening balances and ending balances of current assets are adjusted to reconcile the net income balance.

Prepare the statement of cash flows of a Company for the year under indirect method.

Company
Statement of cash flows (Partial)
For the year ended
Particulars	Amount	Amount
Cash flow from operating activities:
Net Income		$15,200
Adjustment to reconcile net income to net cash flow from operating activities:
Income statement items not affecting cash:
Add: Depreciation expense	$10,000
Less: Gain on sale of plant assets	($3,000)
Changes in current assets and liabilities
Add: Increase in accounts payable	$2,850
Less: Increase in inventory	($1,500)	$8,350
Net cash flows from operating activities		$23,550

Table (1)

From the above explanation, Option (a), (c), (d) and (e) are incorrect answers. So, the correct answer is Option (b).

Conclusion

Hence, the correct answer is Option (b) $23,550 provided by operating activities.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 12, Problem 1MCQ

To determine

Determine the net cash provided by operating activities.

Expert Solution & Answer

Answer to Problem 1MCQ

The correct answer is Option (b) $23,550 provided by operating activities.

Explanation of Solution

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.

Indirect method: Under indirect method, net income is reported first, and then non-cash expenses, losses from fixed assets, and changes in opening balances and ending balances of current assets are adjusted to reconcile the net income balance.

Prepare the statement of cash flows of a Company for the year under indirect method.

Company
Statement of cash flows (Partial)
For the year ended
Particulars	Amount	Amount
Cash flow from operating activities:
Net Income		$15,200
Adjustment to reconcile net income to net cash flow from operating activities:
Income statement items not affecting cash:
Add: Depreciation expense	$10,000
Less: Gain on sale of plant assets	($3,000)
Changes in current assets and liabilities
Add: Increase in accounts payable	$2,850
Less: Increase in inventory	($1,500)	$8,350
Net cash flows from operating activities		$23,550

Table (1)

From the above explanation, Option (a), (c), (d) and (e) are incorrect answers. So, the correct answer is Option (b).

Conclusion

Hence, the correct answer is Option (b) $23,550 provided by operating activities.

Answer 6

Chapter 12, Problem 1MCQ

To determine

Determine the net cash provided by operating activities.

Expert Solution & Answer

Answer to Problem 1MCQ

The correct answer is Option (b) $23,550 provided by operating activities.

Explanation of Solution

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.

Indirect method: Under indirect method, net income is reported first, and then non-cash expenses, losses from fixed assets, and changes in opening balances and ending balances of current assets are adjusted to reconcile the net income balance.

Prepare the statement of cash flows of a Company for the year under indirect method.

Company
Statement of cash flows (Partial)
For the year ended
Particulars	Amount	Amount
Cash flow from operating activities:
Net Income		$15,200
Adjustment to reconcile net income to net cash flow from operating activities:
Income statement items not affecting cash:
Add: Depreciation expense	$10,000
Less: Gain on sale of plant assets	($3,000)
Changes in current assets and liabilities
Add: Increase in accounts payable	$2,850
Less: Increase in inventory	($1,500)	$8,350
Net cash flows from operating activities		$23,550

Table (1)

From the above explanation, Option (a), (c), (d) and (e) are incorrect answers. So, the correct answer is Option (b).

Conclusion

Hence, the correct answer is Option (b) $23,550 provided by operating activities.

Answer 7

Chapter 12, Problem 1MCQ

To determine

Determine the net cash provided by operating activities.

Answer 8

Expert Solution & Answer

Answer to Problem 1MCQ

The correct answer is Option (b) $23,550 provided by operating activities.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Explanation of Solution

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.

Indirect method: Under indirect method, net income is reported first, and then non-cash expenses, losses from fixed assets, and changes in opening balances and ending balances of current assets are adjusted to reconcile the net income balance.

Prepare the statement of cash flows of a Company for the year under indirect method.

Company
Statement of cash flows (Partial)
For the year ended
Particulars	Amount	Amount
Cash flow from operating activities:
Net Income		$15,200
Adjustment to reconcile net income to net cash flow from operating activities:
Income statement items not affecting cash:
Add: Depreciation expense	$10,000
Less: Gain on sale of plant assets	($3,000)
Changes in current assets and liabilities
Add: Increase in accounts payable	$2,850
Less: Increase in inventory	($1,500)	$8,350
Net cash flows from operating activities		$23,550