Financial And Managerial Accounting
15th Edition
ISBN: 9781337902663
Author: WARREN, Carl S.
Publisher: Cengage Learning,
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Chapter 13, Problem 5DQ
To determine
Determine the
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wages payable was $100.000 at the beginning of the year and $ 75,000 at the end of the year, should the $25,000 decrease be added or deducted from income to determine the amount of cash flows from operating activities by the indirect method? Explain in your own word why.
Which of the following adjustments is made to calculate cash flow from operating activities?
Question 6 options:
depreciation is deducted from net profit for the year
income tax expense is added back to net profit for the year
depreciation is added back to net profit for the year
dividends are deducted from retained earnings
Fill in the blanks:
For calculating cash flow from operating activities, provision for doubtful debts is ________________ the profit made during the year (added to/deducted from).
Chapter 13 Solutions
Financial And Managerial Accounting
Ch. 13 - What is the principal disadvantage of the direct...Ch. 13 - Prob. 2DQCh. 13 - A corporation issued 2,000,000 of common stock in...Ch. 13 - A retail business, using the accrual method of...Ch. 13 - Prob. 5DQCh. 13 - A long-term investment in bonds with a cost of...Ch. 13 - A corporation issued 2,000,000 of 20-year bonds...Ch. 13 - Fully depreciated equipment costing 50,000 was...Ch. 13 - Prob. 9DQCh. 13 - Name five common major classes of operating cash...
Ch. 13 - Classifying cash flows Identify whether each of...Ch. 13 - Prob. 2BECh. 13 - Prob. 3BECh. 13 - Cash flows from operating activitiesindirect...Ch. 13 - Land transactions on the statement of cash flows...Ch. 13 - Common stock transactions on the statement of cash...Ch. 13 - Prob. 7BECh. 13 - Appendix 2 Cash received from customersdirect...Ch. 13 - Appendix 2 Cash payments for merchandisedirect...Ch. 13 - Prob. 1ECh. 13 - Effect of transactions on cash flows State the...Ch. 13 - Classifying cash flows Identify the type of cash...Ch. 13 - Prob. 4ECh. 13 - Cash flows from operating activitiesindirect...Ch. 13 - Cash flows from operating activitiesindirect...Ch. 13 - Prob. 7ECh. 13 - Reporting changes in equipment on statement of...Ch. 13 - Reporting changes in equipment on statement of...Ch. 13 - Reporting land transactions on statement of cash...Ch. 13 - Determining cash payments to stockholders The...Ch. 13 - Prob. 12ECh. 13 - Reporting land acquisition for cash and mortgage...Ch. 13 - Reporting issuance and retirement of long-term...Ch. 13 - Prob. 15ECh. 13 - Prob. 16ECh. 13 - Statement of cash flowsindirect method The...Ch. 13 - Statement of cash flowsindirect method List the...Ch. 13 - Prob. 19ECh. 13 - Prob. 20ECh. 13 - Prob. 21ECh. 13 - Prob. 22ECh. 13 - Prob. 1PACh. 13 - Prob. 2PACh. 13 - Statement of cash flowsindirect method The...Ch. 13 - Statement of cash flowsdirect method The...Ch. 13 - Statement of cash flowsdirect method applied to PR...Ch. 13 - Prob. 1PBCh. 13 - Statement of cash flowsindirect method The...Ch. 13 - Statement of cash flowsindirect method The...Ch. 13 - Statement of cash flowsdirect method The...Ch. 13 - Statement of cash flowsdirect method applied to PR...Ch. 13 - Analyze and compare Amazon.com, Best Buy, and...Ch. 13 - Analyze and compare Apple, Coca-Cola, and Verizon...Ch. 13 - Prob. 3MADCh. 13 - Prob. 4MADCh. 13 - Prob. 5MADCh. 13 - Ethics in Action Head Donuts Inc. is a retailer of...Ch. 13 - Prob. 3TIFCh. 13 - Using the statement of cash flows You are...
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- Using the Exhibit below, assume that the balance of Accounts Payable was $60,000 at the beginning of the current year. Furthermore, assume that the balance of Accounts Payable is $65,000 at the end of the current year. When preparing the Statement of Cash Flow using the indirect method for the current year, which of the following statements would describe the proper presentation of accounts payable on the Cash flow from operating activities section? EXHIBIT Increase (Decrease) Net Income (loss) $XXX Adjustments to reconcile net income to net cash flow from operating activities: Depreciation of fixed assets XXX Losses on disposal of assets XXX Gains on disposal of…arrow_forwardIf Accounts receivable increase by R.O.100,000. Income reported on the income statement for the year was R.O.2,800,000. Excluding of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows isarrow_forwardThe cash flows from (used for) operating activities are reported by the direct method on the statement of cash flows. Determine the following: a. If sales for the current year were $558,800 and accounts receivable decreased by $39,700 during the year, what was the amount of cash received from customers?$fill in the blank 1 b. If income tax expense for the current year was $38,900 and income tax payable decreased by $4,500 during the year, what was the amount of cash paid for income taxes?$fill in the blank 2 c. Briefly explain why the cash received from customers in part (a) is different from sales.Because the customers paid than the amount of sales for the period, cash received from customers sales made on account by $39,700 during the current year.arrow_forward
- The cash flows from operating activities are reported by the direct method on the statement of cash flows. Determine the following: a. If sales for the current year were $375,000 and accounts receivable increased by $29,000 during the year, what was the amount of cash received from customers?$fill in the blank 1 b. If income tax expense for the current year was $39,000 and income tax payable decreased by $21,000 during the year, what was the amount of cash payments for income tax?$fill in the blank 2arrow_forwardA contributor to the difference in Target’s net income and cash flows from operatingactivities and net income in each of the three years presented is a sizable increasein the amount Target owes its suppliers. If Target had used the direct rather thanthe indirect method of reporting operating activities, how would this reduction inaccounts payable have affected cash from operating activities?arrow_forwardThe change in cash for the year can be calculated by comparing the balance of cash reported in this year’s and last year’s balance sheet. Why is the statement of cash flows needed?arrow_forward
- How do I calculate the Free Cash Flow from the following? What would it be?arrow_forward• It is correct to say that Cold Goose's net inflows and outflows of cash at the end of Years 1 and 2 are equal to the company's annual contribution to retained earnings, $869,437 and $1,133,180, respectively. This is because of the items reported in the income statement involve payments and receipts of cash.arrow_forwardWhat is the relationship between cash flows from operations and net income for the year of the statement?arrow_forward
- Which of the following is the adjustment that is added during the reconciliation of net income to operating cash flows in indirect method? Select one: a. An increase in Prepaid Expenses b. Amortization Expense c. An increase in Accounts Receivable d. Gain on sale of capital assetsarrow_forwardEach of the following is added to net income in computing net cash provided by operating activities except Select one: a. Amortization expense. b. An increase in accrued expenses payable. c. A decrease in inventory. d. A gain on sale of equipmentarrow_forwardUsing the Exhibit below, assume that the amount of Net Income on the Income Statement for the year was $100,000. When preparing the Statement of Cash Flow using the indirect method for the current year, which of the following statements would describe the proper presentation of net income on the Cash flow from operating activities section? EXHIBIT Increase (Decrease) Net Income (loss) $XXX Adjustments to reconcile net income to net cash flow from operating activities: Depreciation of fixed assets XXX Losses on disposal of assets XXX Gains on disposal of assets (XXX) Changes in current operating assets and liabilities:…arrow_forward
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