Intermediate Accounting
9th Edition
ISBN: 9781259722660
Author: J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 21, Problem 21.9P
• LO21–3, LO21–4
Portions of the financial statements for Hawkeye Company are provided below.
Required:
- 1. Prepare the cash flows from operating activities section of the statement of cash flows for Hawkeye Company using the direct method.
- 2. Prepare the cash flows from operating activities section of the statement of cash flows for Hawkeye Company using the indirect method.
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Exercise 12-6A (Algo) Direct versus indirect method of determining cash flows from operating activities
LO 12-1, 12-2
Expert Electronics, Incorporated (EEI) recognized $8,000 of sales revenue on account and collected $4,900 of cash from accounts
receivable. Further, EEl recognized $3,700 of operating expenses on account and paid $2,100 cash as partial settlement of accounts
payable.
Required
Based on this information alone:
a. Prepare the operating activities section of the statement of cash flows under the direct method.
Note: Amounts to be deducted should be indicated with a minus sign.
Operating Activities - Direct Method
Cash flows from operating activities:
Net cash flow from operating activities
b. Prepare the operating activities section of the statement of cash flows under the indirect method.
Note: Amounts to be deducted should be indicated with a minus sign.
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A list of items that may affect an IFRS-based statement of cash flows prepared using the direct method follows. Assume
that the transactions are for cash unless stated otherwise. Select the letter that is associated with the categorization on
the statement of cash flows for each transaction. Item Transaction
Categorization on the
statement of cash flows
Sale of land at a loss
Gain on the sale of equipment
Repurchasing own shares
Receipt of interest
Purchase of an investment that meets the criteria of
a cash equivalent held to meet short-term cash
commitments
Depreciation expense
Leased right-of-use equipment
Payment of dividends
Other comprehensive income
Impairment loss on a patent. A-a cash receipt in the cash flows from operations section
B-a cash outflow in the cash flows from operations section
C-a cash receipt in the cash flows from investments section
D-a cash outflow in the cash flows from investments section
E-a cash receipt in…
Chapter 21 Solutions
Intermediate Accounting
Ch. 21 - Effects of all cash flows affect the balances of...Ch. 21 - Prob. 21.2QCh. 21 - Prob. 21.3QCh. 21 - Prob. 21.4QCh. 21 - Prob. 21.5QCh. 21 - Prob. 21.6QCh. 21 - Prob. 21.7QCh. 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
Ch. 21 - Perhaps the most noteworthy item reported on an...Ch. 21 - Prob. 21.12QCh. 21 - Given sales revenue of 200,000, how can it be...Ch. 21 - Prob. 21.14QCh. 21 - When determining the amount of cash paid for...Ch. 21 - Prob. 21.16QCh. 21 - When using the indirect method of determining net...Ch. 21 - Prob. 21.18QCh. 21 - Prob. 21.19QCh. 21 - Where can we find authoritative guidance for the...Ch. 21 - U.S. GAAP designates cash outflows for interest...Ch. 21 - Prob. 21.1BECh. 21 - Prob. 21.2BECh. 21 - Prob. 21.3BECh. 21 - Prob. 21.4BECh. 21 - Prob. 21.5BECh. 21 - Prob. 21.6BECh. 21 - Prob. 21.7BECh. 21 - Prob. 21.8BECh. 21 - Investing activities LO215 Carter Containers sold...Ch. 21 - Financing activities LO216 Refer to the situation...Ch. 21 - Prob. 21.11BECh. 21 - Prob. 21.12BECh. 21 - Classification of cash flows LO213 through LO216...Ch. 21 - Determine cash paid to suppliers of merchandise ...Ch. 21 - Determine cash received from customers LO213...Ch. 21 - Prob. 21.4ECh. 21 - Prob. 21.5ECh. 21 - Prob. 21.6ECh. 21 - Determine cash paid for bond interest LO213...Ch. 21 - Determine cash paid for bond interest LO213 For...Ch. 21 - Determine cash paid for income taxes LO213...Ch. 21 - Prob. 21.10ECh. 21 - Prob. 21.11ECh. 21 - Installment note; statement of cash flow effects ...Ch. 21 - Prob. 21.13ECh. 21 - Identifying cash flows from investing activities...Ch. 21 - Prob. 21.15ECh. 21 - Prob. 21.16ECh. 21 - Indirect method; reconciliation of net income to...Ch. 21 - Spreadsheet entries from statement of retained...Ch. 21 - Prob. 21.19ECh. 21 - Prob. 21.20ECh. 21 - Cash flow s from operating activities (direct...Ch. 21 - Indirect method; reconciliation of net income to...Ch. 21 - Prob. 21.23ECh. 21 - Cash flows from operating activities (indirect...Ch. 21 - Prob. 21.25ECh. 21 - Cash flow s from operating activities (indirect...Ch. 21 - Prob. 21.27ECh. 21 - Prob. 21.28ECh. 21 - Prob. 21.29ECh. 21 - Prob. 21.30ECh. 21 - Prob. 21.31ECh. 21 - Prob. 21.32ECh. 21 - Prob. 21.1PCh. 21 - Statement of cash flows; direct method LO213,...Ch. 21 - Prob. 21.3PCh. 21 - Statement of cash flows; direct method LO213,...Ch. 21 - Statement of cash flows; direct method LO213,...Ch. 21 - Cash flows from operating activities (direct...Ch. 21 - Prob. 21.7PCh. 21 - Cash flows from operating activities (direct...Ch. 21 - Cash flows from operating activities (direct...Ch. 21 - Prob. 21.10PCh. 21 - Prepare a statement of cash flows; direct method ...Ch. 21 - Prob. 21.12PCh. 21 - Prob. 21.13PCh. 21 - Statement of cash flows; indirect method; limited...Ch. 21 - Integrating problem; bonds; lease transactions;...Ch. 21 - Statement of cash flows; indirect method LO214,...Ch. 21 - Prob. 21.17PCh. 21 - Statement of cash flows; indirect method LO214,...Ch. 21 - Prob. 21.19PCh. 21 - Prob. 21.20PCh. 21 - Prob. 21.21PCh. 21 - Prob. 21.1BYPCh. 21 - Prob. 21.2BYPCh. 21 - Research Case 213 Information from cash flow...Ch. 21 - Analysis Case 215 Smudged ink; find missing...Ch. 21 - Real World Case 216 Analyze cash flow activities;...Ch. 21 - Prob. 21.7BYPCh. 21 - Prob. 21.8BYPCh. 21 - Research Case 219 FASB codification; locate and...Ch. 21 - IFRS Case 2110 Statement of cash flows...Ch. 21 - Prob. CCTC
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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
- (Appendix 21.1) Operating Cash Flows Refer to the information for Lamberson Company in P21-6. Required: 1. Using the direct method, prepare the operating activities section of the 2019 statement of cash flows for Lamberson. 2. (Optional). If you completed P21-6 earlier, prepare the remaining portion of the statement of cash flows. (A separate schedule reconciling net income to cash provided by operating activities is not necessary.)arrow_forwardPreparing Net Cash Flows from Operating Activities-Direct Method Colassard Industries has the following data available for preparation of its statement of cash flows: Required: Prepare the cash flows from operating activities section of the statement of cash flows using the direct method.arrow_forwardNonearrow_forward
- In an statement of cash flows what is included in the operating activities section? In the investment section? In the financial activities section? One or two paragraph minimum per section CH 15arrow_forwardQUESTION 30 Statement of Cash flows requires that cash receipts and payments should be analysed into three main categories. Under which category would you expect to find the cash proceeds from a share issue? a. Financing activities •b. Operating activities c. Investing activities d.Cash and cash equivalentsarrow_forwardQuestion 8 of 20 View Policies Current Attempt in Progress O O When preparing a statement of cash flows, the following are used for which method in determining cash flows from operating activities? Direct Indirect Net Accounts Receivable Direct Indirect Indirect -/1 Direct !!!arrow_forward
- 18arrow_forwardv Qu B IUS Paragraph Arial 14px A v QUESTION 13 The indirect method for the preparation of the operating activities section of the statement of cash flows: A. Separately lists each major item of operating cash receipts. B. Must not be used in all circumstances. O C. Separately lists each major item of operating cash payments. O D. Reports net income and then adjusts it for items necessary to determine net cash provided or used by operating activities. QUESTION 14 Which section of the statement of cash flows is used to report the purchase of a building by issuing a 9-month note payable? OA. Operating activities. O B. Financing activities. C. Investing activities. Click Save and Submit to save and submit. Click Save All Answers to save all answers. II !!! >arrow_forwardCash Flows from (Used for) Operating Activities The net income reported on the income statement for the current year was $73,600. Depreciation recorded on store equipment for the year amounted to $27,400. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: Cash Accounts receivable (net) Merchandise inventory Prepaid expenses Accounts payable (merchandise creditors) Wages payable End of Year $23,500 56,000 35,500 4,750 21,800 4,900 Beginning of Year $18,700 48,000 40,000 7,000 16,800 5,800 a. Prepare the Cash Flows from (used for) Operating Activities section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash outflows, casharrow_forward
- 7arrow_forwardHelp Save & Exit Which of the following items do we report in the statement of cash flows using the direct method? Multiple Choice 39 19 Depreciation expense. Cash paid to suppliers. Gain on sale of an asset. Loss on sale of an asset. C raw hparrow_forward#203 How should significant noncash transactions be reported in the statement of cash flows according to FASB Statement No. 95? Question 203 options: a These noncash transactions are not to be incorporated in the statement of cash flows. They may be summarized in a separate schedule at the bottom of the statement or appear in a separate supplementary schedule to the financials. b They should be handled in a manner consistent with the transactions that affect cash flows. c They should be incorporated in the statement of cash flows in a section labeled, "Significant Noncash Transactions." d Such transactions should be incorporated in the section (operating, financing, or investing) that is most representative of the major component of the transaction.arrow_forward
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