9th Edition

ISBN: 9781260517125

Author: SPICELAND

Publisher: MCGRAW-HILL CUSTOM PUBLISHING

Concept explainers

The transaction analysis is done with the help of the accounting equation. The basic accounting equation is alternatively known as the balance sheet equation is based on the double-entry system which says that for each transaction happening in a business…

Videos

Textbook Question

Chapter 21, Problem 21.6BYP

Real World Case 21–6

Analyze cash flow activities; Staples, Inc.

• LO21–1 through LO21–8

Real World Financials

Staples, Inc., is the world’s leading office products company. Locate the statement of cash flows of Staples for the fiscal year ended January 30, 2016, on the Internet.

Required:

1. In the three years reported, what was Staples’ primary investing activity? How was this activity financed? Be specific.
2. During the most recent fiscal year, Staples purchased certificates of deposit. How were these purchases reported in the statement of cash flows? (Note: This is not an investing activity.)
3. How are issuances of debt securities and issuances of equity securities classified in a statement of cash flows?
4. How are payments to investors in debt securities (interest) and payments to investors in equity securities (dividends) classified in a statement of cash flows? Is this a conceptual inconsistency? Explain.
5. Staples’ statement of cash flows reports expenditures for acquisition of businesses. It also reports additions to long-term debt. Suppose the businesses had been acquired not with cash, but by exchange for debt securities. Would such a transaction be reported? Explain.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Chapter 21, Problem 21.5BYP

Chapter 21, Problem 21.7BYP

Students have asked these similar questions

Accounting

The following errors took place in journalizing and posting transactions:a. The payment of $3,125 from a customer on account was recorded as a debit to Cash and a credit toAccounts Payable.b. Advertising expense of $1,500 paid for the current month was recorded as a debit to MiscellaneousExpense and a credit to Advertising Expense.c. The purchase of supplies of $2,690 on the account was recorded as a debit to Office Equipment anda credit to Supplies.d. The receipt of $3,750 for services rendered was recorded as a debit to Accounts Receivable and acredit to Fees Earned.Required:Prepare journal entries to correct the errors.Each error correction carries equal marks.

Required:a) Journalize the following transactions using the direct write-off method of accounting foruncollectible receivables:Aug. 7. Received $175 from Roosevelt McLair and wrote off the remainder owed of $400 asuncollectible.Nov. 23. Reinstated the account of Roosevelt McLair and received $400 cash in full payment.b) Journalize the following transactions using the allowance method of accounting for uncollectiblereceivables:Feb. 12. Received $750 from Manning Wingard and wrote off the remainder owed of $2,000 asuncollectible.June 30. Reinstated the account of Manning Wingard and received $2,000 cash in full payment.Each journal carries equal marks

Chapter 21 Solutions

INTERMEDIATE ACTG+CONNECT <LOOSE>

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

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.

Solution Summary: The author explains the accounting procedure followed by Company S to record issuances of debt and equity securities.

Concept explainers

Videos

Want to see the full answer?

Chapter 21 Solutions