Statement of cash flows : It is one of the financial statement that shows the cash and cash equivalents of a company for a particular period. It determines the net changes in cash through reporting the sources and uses of cash due to the operating, investing, and financing activities of a company. Direct method: The direct method uses the cash basis of accounting for the preparation of the statement of cash flows. It takes into account those revenues and expenses for which cash is either received or paid. Cash flows from operating activities: Cash flows from operating activity represent the net cash flows from the general operation of the business by comparing the cash receipt and cash payments. The below table shows the way of calculation of cash flows from operating activities: Cash flows from operating activities (Direct method) Add: Cash receipts. Cash receipt from customer Less : Cash payments: To supplier For operating expenses Income tax expenses Net cash provided from or used by operating activities To Compute : The collections from customers during 2016 for WT Company.

Question

Want to see the full answer?

Answer 1

Question

Chapter 14, Problem 14.14SE

To determine

Statement of cash flows: It is one of the financial statement that shows the cash and cash equivalents of a company for a particular period. It determines the net changes in cash through reporting the sources and uses of cash due to the operating, investing, and financing activities of a company.

Direct method: The direct method uses the cash basis of accounting for the preparation of the statement of cash flows. It takes into account those revenues and expenses for which cash is either received or paid.

Cash flows from operating activities: Cash flows from operating activity represent the net cash flows from the general operation of the business by comparing the cash receipt and cash payments.

The below table shows the way of calculation of cash flows from operating activities:

Cash flows from operating activities (Direct method)

Add: Cash receipts.
Cash receipt from customer

Less: Cash payments:
To supplier
For operating expenses
Income tax expenses
Net cash provided from or used by operating activities

To Compute: The collections from customers during 2016 for WT Company.

To determine

To Compute: The payment for inventory during 2016.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Need answer the financial accounting question

What is the direct materials quantity variance on these general accounting question?

Cullumber Company uses a job-order cost system in each of its three manufacturing departments. Manufacturing overhead is applied to jobs on the basis of direct labour cost in Department D, direct labour hours in Department E, and machine hours in Department K. In establishing the predetermined overhead rates for 2022, the following estimates were made for the year. Department D E K Manufacturing overhead $1,280,000 $1,500,000 $840,000 Direct labour costs $1,600,000 $1,312,500 $472,500 Direct labour hours 105,000 125,000 42,000 Machine hours 420,000 525,000 120,000 The following information pertains to January 2022 for each manufacturing department. Department D E K Direct materials used Direct labour costs $147,000 $132,300 $81,900 $126,000 $115,500 $39,375 Manufacturing overhead incurred $103,950 $128,600 $73,950 Direct labour hours 8,400 11,550 3,675 Machine hours 35,700 47,250 10,380 Your answer is partially correct. Calculate the predetermined overhead rate for each department.…