Horngren's Financial & Managerial Accounting (5th Edition)
5th Edition
ISBN: 9780133866292
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Question
Chapter 14, Problem 14.43BP
Requirement 1:
To determine
Statement of
Direct method: This method uses the basis of cash for preparing the cash flows statement.
Cash flows from operating activities: In this direct method, cash flow from operating activities is computed by using all cash receipts and cash payments during the year.
Cash Receipts: It encompasses all the cash receipts from sale of goods and on account receivable.
Cash Payments: It encompasses all the cash payments that are made to suppliers of goods and all expenses that are paid.
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 |
Cash flows from investing activities: Cash provided by or used in investing activities is a section of statement of cash flows. It includes the purchase or sale of equipment or land, or marketable securities, which is used for business operations.
| Cash flows from investing activities |
| Add: Proceeds from sale of fixed assets |
| Sale of marketable securities / investments |
| Interest received |
| Dividend received |
| Deduct: Purchase of fixed assets/long-lived assets |
| Purchase of marketable securities |
| Net cash provided from or used by investing activities |
Cash flows from financing activities: Cash provided by or used in financing activities is a section of statement of cash flows. It includes raising cash from long-term debt or payment of long-term debt, which is used for business operations.
| Cash flows from financing activities |
| Add: Issuance of common stock |
| Proceeds from borrowings |
| Proceeds from issuance of debt |
| Deduct: Payment of dividend |
| Repayment of debt |
| Interest paid |
| Redemption of debt |
| Net cash provided from or used by financing activities |
To Prepare: Single step income statement of ORRC for the year ended December 31, 2016 (using single-step format).
Requirement 2:
To determine
To Prepare: The
Requirement 3:
To determine
To Prepare: Statement of cash flows under direct method.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Data concerning the cash records of Tamang Panahon Company for the months of November and December 2020 follow:
a. Unadjusted book balance on November 30 amounted to P2,258,000.
b. Total receipts per book in December, P1,400,000.
c. Total disbursements per book in December, P2,400,00.
d. Unadjusted bank balance on November amounted to P2,100,000.
e. Total credits per bank in December amounted to P1,200,000.
f. Total debits per bank in December amounted to P2,500,000.
g. Deposit in Transit
November 30 - 130,000
December 31 - 369,000
h. Outstanding Checks
November 30 - 95,000
December 31 - 30,000
i. NSF checks
November 30 - 60,000
December 31 - 40,000
j. Credit Memo
November 30 - 30,000
December 31 - 50,000
k. Other Debit Memo
November 30 - 90,000…
In reconciling the Cash in Bank of Cake Company with the bank statement balance for the month of November 2023, the following data are summarized:
Book debits for November, including October CM for note collected, P75,000-P850,000
Book credits for November, including NSF of P20,000 and service charge of P600 for October- P620,000
Bank credits for November including CM for November for bank loan of P100,000 and October deposit in transit for P80,000-P700,000
Bank Debits for November including October outstanding checks of P200,720 and November service charge of P180- P650,000
What is the amount of outstanding checks for November?*
In reconciling the Cash in Bank of Inner Company with the bank statement balance for the month of November 2018, thefollowing data were summarized:
Book debits for November, including October CM for note collected, P60,000 P800,000
Book credits for November, including NSF of P20,000 and service charge of P800 for October P620,000
Bank credits for November, including CM for November for bank loan of P100,000 andOctober deposit in transit for P80,000. P700,000
Bank debits for November including October outstanding checks of P170,800 and Novemberservice charge of P200 P600,000what is the amount for outstanding checks for november?
Chapter 14 Solutions
Horngren's Financial & Managerial Accounting (5th Edition)
Ch. 14 - The purposes of the statement of cash flows are to...Ch. 14 - The main categories of cash flow activities are a....Ch. 14 - Operating activities are most closely related to...Ch. 14 - Which item does not appear on a statement of cash...Ch. 14 - Leather Shop earned net income of 57,000 after...Ch. 14 - The Plant Assets account and Accumulated...Ch. 14 - Mountain Water Corp. issued common stock of 28,000...Ch. 14 - Prob. 8QCCh. 14 - Prob. 9AQCCh. 14 - If accrued liabilities increased during the year,...
Ch. 14 - Prob. 1RQCh. 14 - How does the statement of cash flows help users of...Ch. 14 - Describe the three basic types of cash flow...Ch. 14 - What types of transactions are reported in the...Ch. 14 - Prob. 5RQCh. 14 - Prob. 6RQCh. 14 - Explain why depreciation expense, depletion...Ch. 14 - Prob. 8RQCh. 14 - If current assets other than cash increase, what...Ch. 14 - If current liabilities increase, what is the...Ch. 14 - Prob. 11RQCh. 14 - Prob. 12RQCh. 14 - Prob. 13RQCh. 14 - Prob. 14RQCh. 14 - Prob. 15ARQCh. 14 - Prob. 16BRQCh. 14 - Describing the purposes of the statement of cash...Ch. 14 - Prob. 14.2SECh. 14 - Classifying items on the indirect statement of...Ch. 14 - Computing cash flows from operating...Ch. 14 - Prob. 14.5SECh. 14 - Prob. 14.6SECh. 14 - Prob. 14.7SECh. 14 - Prob. 14.8SECh. 14 - Prob. 14.9SECh. 14 - Prob. 14.10SECh. 14 - Preparing a statement of cash flows using the...Ch. 14 - Prob. 14.12SECh. 14 - Preparing the direct method statement of cash...Ch. 14 - Prob. 14.14SECh. 14 - Prob. 14.15SECh. 14 - Classifying cash flow items Consider the following...Ch. 14 - Prob. 14.17ECh. 14 - Prob. 14.18ECh. 14 - Prob. 14.19ECh. 14 - Prob. 14.20ECh. 14 - Prob. 14.21ECh. 14 - Prob. 14.22ECh. 14 - Prob. 14.23ECh. 14 - Prob. 14.24ECh. 14 - Prob. 14.25ECh. 14 - Prob. 14.26ECh. 14 - Prob. 14.27ECh. 14 - Prob. 14.28ECh. 14 - Prob. 14.29ECh. 14 - Prob. 14.30ECh. 14 - Using a spreadsheet to prepare the statement of...Ch. 14 - Prob. 14.32APCh. 14 - Prob. 14.33APCh. 14 - Prob. 14.34APCh. 14 - Prob. 14.35APCh. 14 - Preparing the statement of cash flows----direct...Ch. 14 - Prob. 14.37APCh. 14 - Prob. 14.38APCh. 14 - Prob. 14.39BPCh. 14 - Prob. 14.40BPCh. 14 - Prob. 14.41BPCh. 14 - Prob. 14.42BPCh. 14 - Prob. 14.43BPCh. 14 - Prob. 14.44BPCh. 14 - Using a spreadsheet to prepare the statement of...Ch. 14 - Prob. 14.46CPCh. 14 - Prob. 14.1CTDCCh. 14 - Moss Exports is having a bad year. Net income is...Ch. 14 - Details about a company's cash flows appear in a...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Smoltz Company reported the following information for the current year: cost of goods sold, $252,500; increase in inventory, $21,700; and increase in accounts payable, $12,200. What is the amount of cash paid to suppliers that Smoltz would report on its statement of cash flows under the direct method? a. $218,600 c. $262,000 b. $243,000 d. $286,400arrow_forwardAn analysis of incomplete records of MAYA INCORPORATED produced the following information applicable to 2013: Summary of cash transactions were as follows: CASH RECEIPTS: Collection on accounts receivable 27,600,000 Collection on notes receivable 2,400,000 Purchase returns and allowances (note a) 500,000 Recovery of previously written off accounts (not included in the collections on accounts receivable above, note b) 70.000 CASH DISBURSEMENT: Payments on accounts payable 13,200,000 Payments of notes payable, trade 2,300,000 Sales returns and allowances (note c) 400,000 Insurance 700,000 Salaries. 10,000,000 Other expenses 1,500,000 Dividends. 1,000,000 Additional information : a) Total purchase returns and allowances amounted to P800,000. Purchase discounts taken was at P350.000. b) Write-off of accounts receivable during the year amounted to P310,000. c) Total sales returns and allowances amounted to P1,200,000. Sales discounts taken by customers was at P1,800,000. d) The following…arrow_forwardArvin Company had the following account balances on December 31, 2013: 2,250,000 125,000 Cash in bank Cash on hand Cash restricted for addition to plant expected to be disbursed in 2014 1,600,000 Cash in bank included P600,000 of compensating balance against short-term borrowing arrangement. The compensating balance, is not legally restricted as to withdrawal. What total cash should be reported under current assets on December 31, 2013? O 1,775,000 O 2,250,000 O 2,375,000 O 3,975,000arrow_forward
- As of December 31, 2017 Cash $ 17,900 Accounts payable $ 29,500 Accounts receivable $ 39,600 Notes payable 15,400 Less: Allowance for doubtful accounts 3,200 36,400 Unearned revenue 3,800 Inventory 61,100 Total current liabilities $ 48,700 Prepaid expenses 7,400 Total current assets $ 122,800 The following errors in the corporation's accounting have been discovered: Keane collected $ 5,200 on December 20, 2017 as a down payment for services to be performed in January, 2018. The company's controller recorded the amount as revenue. 1. The inventory amount reported included $ 2,300 of merchandise that had been received on December 31, 2017 but for which no purchase invoices had been received or entered. Of this amount, $ 1,600 had been received on consignment; the remainder was purchased f.o.b. destination, terms 2/10, n/30. 2. Sales for the first day in January 2018 in the amount of $ 11,100 were entered in the sales journal as of December 31, 2017. Of these, $ 7,000 were sales on…arrow_forwardUsing the following information: Accounts receivable Allowance Cash realizable value 12/31/20 $47500 increase. $44180 increase. $39620 increase. $43520 increase. $538000 (36300 ) $501700 During 2021, sales on account were $146400 and collections on account were $98900. Also during 2021, the company wrote off $3980 in uncollectible accounts. An analysis of outstanding receivable accounts at year end indicated that uncollectible accounts should be estimated at $40200. The change in the cash realizable value from the balance at 12/31/20 to 12/31/21 was aarrow_forwardBelow is information about Adam Ltd’s cash position for the month of May 2020.1. The general ledger Cash at Bank account had a balance of $42,400 on 30 April.2. The cash receipts journal showed total cash receipts of $585,408 for May.3. The cash payments journal showed total cash payments of $530,148 for May.4. The June bank statement reported a bank balance of $82,368 on 30 May.5. Outstanding cheques at the end of May were: no. 221, $2896; no. 225, $308; and no. 230, $820.6. Cash receipts of $20,180 for 31 May were not included in the May bank statement.7. A dishonoured cheque written by a client Jim Ltd, $2728. A credit for an electronic transfer from a customer of $1,2889. Interest earned, $8810. Account and transaction fees, $240.Required:a) Update the cash receipts and cash payments journals by adding the necessary adjustments and calculate the total cash receipts and cash payments for May.b) Post from cash receipts and cash payments journals to the Cash at Bank ledger account and…arrow_forward
- The bookkeeper for Coronado Company has prepared the following balance sheet as of July 31, 2020. CORONADO COMPANY BALANCE SHEET AS OF JULY 31, 2020 Cash $ 73,290 Notes and accounts payable $ 48,290 Accounts receivable (net) 44,790 Long-term liabilities 79,290 Inventory 64,290 Stockholders' equity 159,790 Equipment (net) 84,000 $287,370 Patents 21,000 $287,370 The following additional information is provided. 1. Cash includes $1,200 in a petty cash fund and $11,230 in a bond sinking fund. The net accounts receivable balance is comprised of the following two items: (a) accounts receivable $48,290 and (b) allowance for doubtful accounts $3,500. 2.arrow_forwardCash and accounts receivable for Adams Company are as follows: Prior Current Year Year Cash $41,208 $30,300 Accounts receivable (net) 26,313 53,700 What are the amounts and percentages of increase or decrease that would be shown with horizontal analysis? Account Dollar Change Percent Change Cash Accounts Receivable ems (Previous Next to search a. 53°F Sunny 3:28 PM (中岁 12/14/2021arrow_forwardFor the purpose of starting the working capital of Jhon Company on Dec. 31, 2021, the following data are submitted: Cash on hand and in bank, net of bank overdraft of P50,000 Petty cash (unreplenished petty cash expenses, P4,000) a. b. Notes receivable Accounts receivable, net of accounts with credit balances of P100,000. Merchandise inventory, excluding unrecorded purchase of P200,000 on account in transit on Dec. 31, 2021 and shipped FOB shipping point on Dec. 31, 2021 ܫ ܘ ܩ ܘ Prepaid expenses Accounts payable, net of accounts with debit balances of P150,000 Note payable, with annual installment of P500,000 payable every May 31 Accrued expenses P3,950,000 P4,100,000 P4,300,000 d. P5,800,000 The total current liabilities of Jhon Company on Dec. 31, 2021 should be. } 1 P 550,000 } 10,000 750,000 1,100,000 2,000,000 90,000 3,000,000 2,000,000 300,000arrow_forward
- Considering the financial statement information below for the The C’mon Cam! Co., how long is the cash cycle? Item Beginning EndingInventory $9,338 $11,550Accounts Receivable 5,670 6,947Accounts Payable 7,689 9,625 Net Sales $82,544Cost of Goods Sold $58,638 a. 28 daysb. 39 daysc. 65 daysd. 93 daysarrow_forwardWhat is the december 31, 2021 net realizable value?arrow_forwardThe statement of financial position of the Money Company on December 31, 2020 shows cash of P330,820. Thefollowing items were found to comprise this total amount: Checking account in Metrobank, (outstanding check As of year-end totaled P15,200) P105,200 Savings account at Far East Bank 30,800 Petty cash fund (including expense receipts for 250) 1,500 Cash on Hand (undeposited sales receipts) 4,200 Sinking fund cash 35,000 Cash in foreign bank (in equivalent pesos) 65,000 Customers' check on hand: Traveler's check 14,000 Manager's check 23,120 Short-term treasury bills 52,000 Money Company also has on hand a check payable to supplier amounting to P62,000, which has been recorded in the cash disbursement journal in December. REQUIRED: What is the correct amount of cash?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage Learning
Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
Financial Accounting: The Impact on Decision Make...
Accounting
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
The management of receivables Introduction - ACCA Financial Management (FM); Author: OpenTuition;https://www.youtube.com/watch?v=tLmePnbC3ZQ;License: Standard YouTube License, CC-BY