9th Edition

ISBN: 9781259722660

Author: J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher: McGraw-Hill Education

Concept explainers

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…

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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…

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Textbook Question

Chapter 21, Problem 21.14P

Statement of cash flows; indirect method; limited information

• LO21–4, LO21–8

The comparative balance sheets for 2018 and 2017 are given below for Surmise Company. Net income for 2018 was $50 million.

Chapter 21, Problem 21.14P, Statement of cash flows; indirect method; limited information LO214, LO218 The comparative balance , example 1

Chapter 21, Problem 21.14P, Statement of cash flows; indirect method; limited information LO214, LO218 The comparative balance , example 2

Required:

Prepare the statement of cash flows of Surmise Company for the year ended December 31, 2018. Use the indirect method to present cash flows from operating activities because you do not have sufficient information to use the direct method. You will need to make reasonable assumptions concerning the reasons for changes in some account balances. A spreadsheet or T-account analysis will be helpful. (Hint: The right to use a building was acquired with a seven-year lease agreement. Annual lease payments of $9 million are paid at January 1 of each year starting in 2018.)

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Chapter 21, Problem 21.13P

Chapter 21, Problem 21.15P

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Chapter 21 Solutions

Intermediate Accounting

Ch. 21 - Effects of all cash flows affect the balances of...Ch. 21 - Prob. 21.2Q Ch. 21 - Prob. 21.3Q Ch. 21 - Prob. 21.4Q Ch. 21 - Prob. 21.5Q Ch. 21 - Prob. 21.6Q Ch. 21 - Prob. 21.7Q Ch. 21 - The sale of stock and the sale of bonds are...Ch. 21 - Does the statement of cash flows report only...Ch. 21 - Prob. 21.10Q

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Solution Summary: The author explains that the Spreadsheet is a supplementary device which helps to prepare the adjusting entries and the statement of cash flows easier.

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