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. Indirect method: Under this method, the following amounts are to be adjusted from the Net Incometo calculate the net cash provided from operating activities . Cash flows from operating activities: These are the cash produced by the normal business operations. The below table shows the way of calculation of cash flows from operating activities: Cash flows from operating activities (Indirect method) Add: Decrease in current assets Increase in current liability Depreciation expense and amortization expense Loss on sale of plant assets Deduct: Increase in current assets Decrease in current liabilities Gain on sale of plant assets Net cash provided from or used by operating activities Table (1) To Prepare: The cash flows from operating activities sections of the statement of cash flows using indirect method.

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Lui Coffee Company roasts and packs coffee beans. The process begins by placing coffee beans into the Roasting Department. From the Roasting Department, coffee beans are then transferred to the Packing Department. The following is a partial work in process account of the Roasting Department at March 31: ACCOUNT ACCOUNT NO. Date Item Debit Credit BalanceDebit BalanceCredit March 1 Bal., 25,000 units, 10% completed 21,250 31 Direct materials, 600,000 units 450,000 471,250 31 Direct labor 244,600 715,850 31 Factory overhead 415,820 1,131,670 31 Goods transferred, 605,000 units ? 31 Bal., ? units, 45% completed ? Required:1. Prepare a cost of production report, and identify the missing amounts for Work in Process—Roasting Department.

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Chapter 16, Problem 16.4BPE

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.

Indirect method: Under this method, the following amounts are to be adjusted from the Net Incometo calculate the net cash provided from operating activities.

Cash flows from operating activities: These are the cash produced by the normal business operations.

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

Cash flows from operating activities (Indirect method)

Add: Decrease in current assets
         Increase in current liability
         Depreciation expense and amortization expense
         Loss on sale of plant assets

Deduct: Increase in current assets
              Decrease in current liabilities
              Gain on sale of plant assets
Net cash provided from or used by operating activities

Table (1)

To Prepare: The cash flows from operating activities sections of the statement of cash flows using indirect method.

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Lui Coffee Company roasts and packs coffee beans. The process begins by placing coffee beans into the Roasting Department. From the Roasting Department, coffee beans are then transferred to the Packing Department. The following is a partial work in process account of the Roasting Department at March 31: ACCOUNT ACCOUNT NO. Date Item Debit Credit BalanceDebit BalanceCredit March 1 Bal., 25,000 units, 10% completed 21,250 31 Direct materials, 600,000 units 450,000 471,250 31 Direct labor 244,600 715,850 31 Factory overhead 415,820 1,131,670 31 Goods transferred, 605,000 units ? 31 Bal., ? units, 45% completed ? Required:1. Prepare a cost of production report, and identify the missing amounts for Work in Process—Roasting Department.

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