Determine the net cash provided by operating activities.

Question

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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.

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Iguana, Incorporated, manufactures bamboo picture frames that sell for $30 each. Each frame requires 4 linear feet of bamboo, which costs $2.50 per foot. Each frame takes approximately 30 minutes to build, and the labor rate averages $14 per hour. Iguana has the following inventory policies: Ending finished goods inventory should be 40 percent of next month’s sales. Ending direct materials inventory should be 30 percent of next month’s production. Expected unit sales (frames) for the upcoming months follow: March 295 April 290 May 340 June 440 July 415 August 465 Variable manufacturing overhead is incurred at a rate of $0.20 per unit produced. Annual fixed manufacturing overhead is estimated to be $9,000 ($750 per month) for expected production of 5,000 units for the year. Selling and administrative expenses are estimated at $800 per month plus $0.50 per unit sold. Iguana, Incorporated, had $11,800 cash on hand on April 1. Of its sales, 80 percent is in cash. Of the…

I am looking for the correct answer to this general accounting problem using valid accounting standards.

I am trying to find the accurate solution to this general accounting problem with appropriate explanations.

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.

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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.

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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.

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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