Statement of cash flows : This statement reports all the cash transactions which are responsible for inflow and outflow of cash, and result of these transactions is reported as ending balance of cash at the end of reported period. Income statement: Income statement is a financial statement that shows the net income or net loss by deducting the expenses from the revenues and vice versa. To Explain: The differences between cash flows from operating activities and the net income.

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Answer 1

Question

Chapter 21, Problem CCTC

a)

To determine

Statement of cash flows: This statement reports all the cash transactions which are responsible for inflow and outflow of cash, and result of these transactions is reported as ending balance of cash at the end of reported period.

Income statement: Income statement is a financial statement that shows the net income or net loss by deducting the expenses from the revenues and vice versa.

To Explain: The differences between cash flows from operating activities and the net income.

b)

To determine

To Explain: The accounting method followed by Company T, to record depreciation and amortization expense.

c)

To determine

To Explain: The difference in the accounting method if Company T, followed direct method instead of indirect method, to prepare the statement of cash flows.

d)

To determine

To Explain: The difference in the cash inflows and outflows from financing activities and investing activities for the two of the three years.

e)

To determine

To Explain: The transactions which do not impact the statement of cash flow of a company.

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E 13-20 Various transactions involving contingencies LO13-5, LO13-6 The following selected transactions relate to contingencies of Classical Tool Makers, Inc., which began operations in July 2021. Classical's fiscal year ends on December 31. Financial statements are issued in April 2022. Required: Prepare the year-end entries for any amounts that should be recorded as a result of each of these contingencies and indicate whether a disclosure note is indicated. 1. Classical's products carry a one-year warranty against manufacturer's defects. Based on previous experience, warranty costs are expected to approximate 4% of sales. Sales were $2 million (all credit) for 2021. Actual warranty expenditures were $30,800 and were recorded as warranty expense when incurred. 2. Although no customer accounts have been shown to be uncollectible, Classical estimates that 2% of credit sales will eventually prove uncollectible.

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Answer 2

Question

Chapter 21, Problem CCTC

a)

To determine

Statement of cash flows: This statement reports all the cash transactions which are responsible for inflow and outflow of cash, and result of these transactions is reported as ending balance of cash at the end of reported period.

Income statement: Income statement is a financial statement that shows the net income or net loss by deducting the expenses from the revenues and vice versa.

To Explain: The differences between cash flows from operating activities and the net income.

b)

To determine

To Explain: The accounting method followed by Company T, to record depreciation and amortization expense.

c)

To determine

To Explain: The difference in the accounting method if Company T, followed direct method instead of indirect method, to prepare the statement of cash flows.

d)

To determine

To Explain: The difference in the cash inflows and outflows from financing activities and investing activities for the two of the three years.

e)

To determine

To Explain: The transactions which do not impact the statement of cash flow of a company.

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Answer 3

Question

Chapter 21, Problem CCTC

a)

To determine

Statement of cash flows: This statement reports all the cash transactions which are responsible for inflow and outflow of cash, and result of these transactions is reported as ending balance of cash at the end of reported period.

Income statement: Income statement is a financial statement that shows the net income or net loss by deducting the expenses from the revenues and vice versa.

To Explain: The differences between cash flows from operating activities and the net income.

b)

To determine

To Explain: The accounting method followed by Company T, to record depreciation and amortization expense.

c)

To determine

To Explain: The difference in the accounting method if Company T, followed direct method instead of indirect method, to prepare the statement of cash flows.

d)

To determine

To Explain: The difference in the cash inflows and outflows from financing activities and investing activities for the two of the three years.

e)

To determine

To Explain: The transactions which do not impact the statement of cash flow of a company.

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Answer 4

Question

Chapter 21, Problem CCTC

a)

To determine

Statement of cash flows: This statement reports all the cash transactions which are responsible for inflow and outflow of cash, and result of these transactions is reported as ending balance of cash at the end of reported period.

Income statement: Income statement is a financial statement that shows the net income or net loss by deducting the expenses from the revenues and vice versa.

To Explain: The differences between cash flows from operating activities and the net income.

b)

To determine

To Explain: The accounting method followed by Company T, to record depreciation and amortization expense.

c)

To determine

To Explain: The difference in the accounting method if Company T, followed direct method instead of indirect method, to prepare the statement of cash flows.

d)

To determine

To Explain: The difference in the cash inflows and outflows from financing activities and investing activities for the two of the three years.

e)

To determine

To Explain: The transactions which do not impact the statement of cash flow of a company.

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Answer 5

Chapter 21, Problem CCTC

a)

To determine

Statement of cash flows: This statement reports all the cash transactions which are responsible for inflow and outflow of cash, and result of these transactions is reported as ending balance of cash at the end of reported period.

Income statement: Income statement is a financial statement that shows the net income or net loss by deducting the expenses from the revenues and vice versa.

To Explain: The differences between cash flows from operating activities and the net income.

b)

To determine

To Explain: The accounting method followed by Company T, to record depreciation and amortization expense.

c)

To determine

To Explain: The difference in the accounting method if Company T, followed direct method instead of indirect method, to prepare the statement of cash flows.

d)

To determine

To Explain: The difference in the cash inflows and outflows from financing activities and investing activities for the two of the three years.

e)

To determine

To Explain: The transactions which do not impact the statement of cash flow of a company.

Answer 6

Chapter 21, Problem CCTC

a)

To determine

Statement of cash flows: This statement reports all the cash transactions which are responsible for inflow and outflow of cash, and result of these transactions is reported as ending balance of cash at the end of reported period.

Income statement: Income statement is a financial statement that shows the net income or net loss by deducting the expenses from the revenues and vice versa.

To Explain: The differences between cash flows from operating activities and the net income.

Answer 7

Chapter 21, Problem CCTC

a)

To determine

Statement of cash flows: This statement reports all the cash transactions which are responsible for inflow and outflow of cash, and result of these transactions is reported as ending balance of cash at the end of reported period.

Income statement: Income statement is a financial statement that shows the net income or net loss by deducting the expenses from the revenues and vice versa.

To Explain: The differences between cash flows from operating activities and the net income.

Answer 8

b)

To determine

To Explain: The accounting method followed by Company T, to record depreciation and amortization expense.

Answer 9

b)

To determine

To Explain: The accounting method followed by Company T, to record depreciation and amortization expense.

Answer 10

c)

To determine

To Explain: The difference in the accounting method if Company T, followed direct method instead of indirect method, to prepare the statement of cash flows.

Answer 11

c)

To determine

To Explain: The difference in the accounting method if Company T, followed direct method instead of indirect method, to prepare the statement of cash flows.

Answer 12

d)

To determine

To Explain: The difference in the cash inflows and outflows from financing activities and investing activities for the two of the three years.

Answer 13

d)

To determine

To Explain: The difference in the cash inflows and outflows from financing activities and investing activities for the two of the three years.

Answer 14

e)

To determine

To Explain: The transactions which do not impact the statement of cash flow of a company.

Answer 15

e)

To determine

To Explain: The transactions which do not impact the statement of cash flow of a company.

Answer 16

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Answer 17

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Answer 18

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Answer 19

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

Solution Summary: The author explains the difference between cash flows from operating activities and net income.

To Explain: The accounting method followed by Company T, to record depreciation and amortization expense.

To Explain: The difference in the accounting method if Company T, followed direct method instead of indirect method, to prepare the statement of cash flows.

To Explain: The difference in the cash inflows and outflows from financing activities and investing activities for the two of the three years.

To Explain: The transactions which do not impact the statement of cash flow of a company.

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Chapter 21 Solutions