6th Edition

ISBN: 9781260664386

Author: PHILLIPS, LIBB

Publisher: MCG

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Textbook Question

Chapter 12, Problem 7PA

(Supplement 12A) Preparing and Interpreting a Statement of Cash Flows with Loss on Disposal (Indirect Method)

Assume the same facts as PA12-4, except for the income statement and additional data item (a). The new income statement is shown on the following page. Instead of item (a) from PA12-4, assume that the company bought new equipment for $1,800 cash and sold existing equipment for $500 cash. The equipment that was sold had cost $1,300 and had Aceumulated Depreciation of $250 at the time of sale.

Income Statement
Service Revenue	$37,500
Salaries and Wages Expense	35,000
Depreciation Expense	500
Loss on Disposal of Equipment	550
Income Tax Expense	200
Net Income	$ 1,250

Required:

1. Prepare the statement of cash flows for the year ended December 31 using the indirect method.
2. Use the statement of cash flows to evaluate the company’s cash flows.

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Chapter 12, Problem 6PA

Chapter 12, Problem 1PB

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Chapter 12 Solutions

FUNDAMENTALS OF FINANCIAL ACCOUNTING

Ch. 12 - Compare the purposes of the income statement, the...Ch. 12 - Prob. 2Q Ch. 12 - Prob. 3Q Ch. 12 - What are the major categories of business...Ch. 12 - Prob. 5Q Ch. 12 - Describe the types of items used to compute cash...Ch. 12 - Under the indirect method, depreciation expense is...Ch. 12 - Prob. 8Q Ch. 12 - Explain why a 50,000 increase in inventory during...Ch. 12 - Prob. 10Q

Ch. 12 - As a junior analyst, you are evaluating the...Ch. 12 - Prob. 12Q Ch. 12 - Prob. 13Q Ch. 12 - Prob. 14Q Ch. 12 - (Supplement 12A) How is the sale of equipment...Ch. 12 - Prob. 1MC Ch. 12 - Prob. 2MC Ch. 12 - Prob. 3MC Ch. 12 - Prob. 4MC Ch. 12 - Which of the following would not appear in the...Ch. 12 - Prob. 6MC Ch. 12 - Prob. 7MC Ch. 12 - Prob. 8MC Ch. 12 - The total change in cash as shown near the bottom...Ch. 12 - Prob. 10MC Ch. 12 - Prob. 1ME Ch. 12 - Matching Items Reported to Cash Flow Statement...Ch. 12 - Determining the Effects of Account Changes on Cash...Ch. 12 - Computing Cash Flows from Operating Activities...Ch. 12 - Prob. 5ME Ch. 12 - Computing Cash Flows from Investing Activities...Ch. 12 - Computing Cash Flows from Financing Activities...Ch. 12 - Computing Cash Flows Under IFRS Using the data...Ch. 12 - Prob. 9ME Ch. 12 - Interpreting Cash Flows from Operating, Investing,...Ch. 12 - Matching Items Reported to Cash Flow Statement...Ch. 12 - Computing Cash Flows from Operating Activities...Ch. 12 - Prob. 13ME Ch. 12 - Matching items Reported to Cash Flow Statement...Ch. 12 - Prob. 2E Ch. 12 - Prob. 3E Ch. 12 - Prob. 4E Ch. 12 - Prob. 5E Ch. 12 - Prob. 6E Ch. 12 - Prob. 7E Ch. 12 - Prob. 8E Ch. 12 - Reporting and Interpreting Cash Flows from...Ch. 12 - Prob. 10E Ch. 12 - Prob. 11E Ch. 12 - Inferring Balance Sheet Changes from the Cash Flow...Ch. 12 - Prob. 13E Ch. 12 - Prob. 14E Ch. 12 - Prob. 15E Ch. 12 - Prob. 16E Ch. 12 - Prob. 17E Ch. 12 - Prob. 18E Ch. 12 - Prob. 19E Ch. 12 - Prob. 20E Ch. 12 - Prob. 21E Ch. 12 - Prob. 22E Ch. 12 - (Supplement 12B) Preparing a Statement of Cash...Ch. 12 - Determining Cash Flow Statement Effects of...Ch. 12 - Prob. 2CP Ch. 12 - Prob. 3CP Ch. 12 - Preparing and Interpreting a Statement of Cash...Ch. 12 - Prob. 5CP Ch. 12 - Prob. 6CP Ch. 12 - (Supplement 12A) Preparing and Interpreting a...Ch. 12 - Prob. 1PA Ch. 12 - Prob. 2PA Ch. 12 - Prob. 3PA Ch. 12 - Preparing and Interpreting a Statement of Cash...Ch. 12 - Computing Cash Flows from Operating Activities...Ch. 12 - Prob. 6PA Ch. 12 - (Supplement 12A) Preparing and Interpreting a...Ch. 12 - Prob. 1PB Ch. 12 - Prob. 2PB Ch. 12 - Prob. 3PB Ch. 12 - Preparing and Interpreting a Statement of Cash...Ch. 12 - Prob. 5PB Ch. 12 - Prob. 6PB Ch. 12 - Prob. 1SDC Ch. 12 - Prob. 2SDC Ch. 12 - Prob. 6SDC Ch. 12 - Prob. 7SDC Ch. 12 - Prob. 8SDC Ch. 12 - Prob. 9SDC Ch. 12 - Prob. 1CC

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Solution Summary: The author explains how to prepare the statement of cash flows of Company HU for the current year ended December 31 using the indirect method.

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