Chapter 12, Problem 5E

To determine

(a)

Introduction:

Journal entries is recording the of the transaction in the accounting journal in a chronological order. The entries are recorded as the Debit balances and Credit balances.

To record:

The journal entries.

To determine

(b)

Introduction:

Cash flow from operations measure cash flows related to day-to-day activities. Operating income and operating expenses for the year forms the part of operating activities. It includes cash flows related to buying and selling of goods and services.

To identify:

The amount of net cash flow from operating activities.

To determine

(c)

Introduction:

Net income is the income that is calculated after the deduction of expenses such as selling and administration expenses, cost of goods sold, operating expenses, depreciation, etc. from the revenue earned.

To calculate:

The amount of net income.

To determine

(d)

Introduction:

Cash flow from operations measure cash flows related to day-to-day activities. Operating income and operating expenses for the year forms the part of operating activities. It includes cash flows related to buying and selling of goods and services.

To calculate:

The cash flow from operating activities under the indirect method.

To determine

(e)

Introduction:

Cash flow from operations measure cash flows related to day-to-day activities. Operating income and operating expenses for the year forms the part of operating activities. It includes cash flows related to buying and selling of goods and services.

To state:

The general rule that is applied to convert net income to operating cash flows in requirement 4.