Explanation The Cash Flow statement using the indirect method and Analysis of changes is explained as follows: FORTEN COMPANY Cash Flow Statements Indirect Method for the year ended Dec. 31, 2015 Cash flows from operating activities: Net income $ 114,975 Add: Depreciation Expense $ 20,750 Add: Loss on Sale of Equipment $ 5,125 Less: Increase in Accounts receivables $ (15,185) Less: Increase in Inventory $ (23,856) Add: Decrease in Prepaid Expense $ 625 Less: Decrease in Accounts Payable $ (61,534) Cash provided by operating activities $ 40,900

25th Edition

ISBN: 9781265661212

Author: Wild

Publisher: MCG CUSTOM

See similar textbooks

Concept explainers

Reporting Cash Flows

Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows fro…

Balance Sheet

A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the …

Financial Statements

Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It…

Owner's Capital

Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expect…

Videos

Question

Chapter 16, Problem 4PSA

To determine

Concept Introduction:

Cash Flow statement:

The Cash flow statement shows the movement of cash during a particular period. The Cash flows are categorized into three categories as follows:

Cash flows from operating activities

Cash Flows from investing activities

Cash flows from financing activities

(Note: Cash flows from operating activities can be prepared using direct or indirect method)

To Prepare:

The Cash Flow statement using the indirect method and Analysis of changes

Expert Solution & Answer

Chapter 16 Solutions

FUND.ACCT.PRIN.(LL)-W/ACCESS >CUSTOM<

Ch. 16 - Transaction classification by activity C1 Classify...Ch. 16 - Prob. 2QS Ch. 16 - QS 16-3 Indirect: Computing cash flows from...Ch. 16 - QS 16-4 Indirect: Computing cash flows from...Ch. 16 - QS 16-5 Indirect: Computing cash flows from...Ch. 16 - QS 16-6 Indirect: Computing cash from operations...Ch. 16 - QS 16-7 Indirect: Computing cash from operations...Ch. 16 - QS 16-8 Computing cash from asset sales P3 The...Ch. 16 - Prob. 9QS Ch. 16 - QS 16-10 Computing investing cash flows P3 The...

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.

Recommended textbooks for you

FINANCIAL ACCOUNTING
Accounting
ISBN:9781259964947
Author:Libby
Publisher:MCG
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education