Explanation Operating Activities Section: The activities which accounts for daily operating transactions results in cash inflows as well as outflows are referred to as the operating activities section. The cash flows in the operating activities exists mainly from the production and distribution of commodities produced in an economy. The cash flow statement as per the direct method is given below: L.L. Company Cash Flow Statement – Direct Method For the year ended December 31 Operating Activities Cash collected from customers $53,500 Cash paid for merchandise ($37,000) Cash paid to other suppliers ($11,450) Cash paid for interest ($2,100) Cash investment income received $634 Cash paid for taxes ($2,284) Net cash provided by operating activities $1,300 Table (1) The table given above depicts various components that help to evaluate the total value of net cash by all the operating activity that is calculated as $1,300. Footnote: The calculation of cash received from customers is given below: Cash Collected from Customers During the Year Particulars Amount ($) Sales $56,000 Less: Increase in Accounts Receivable ($2,500) Cash collected from Customers $53,500 Table (2) The calculation of cash paid for merchandise is given below: Cash Paid for Merchandise Particula...

Pearson eText Intermediate Accounting -- Instant Access (Pearson+)

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Author: Elizabeth Gordon, Jana Raedy

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Chapter 22, Problem 22.5BE

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To prepare: The operating activities section of the cash flow statement using the direct method.

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Chapter 22, Problem 22.6BE

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$240 Assume that a company produced 10,000 units and sold 8,000 units during its first year of operations. It has also provided the following information: Particulars Selling price Per unit per year Direct materials $85 Direct labor $57 Variable manufacturing overhead $10 Sales commission $11 Fixed manufacturing overhead P Fixed selling and administrative expense $250,000 If the company's unit product cost under absorption costing is $197, then what is the amount of fixed manufacturing overhead per year?

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Pearson eText Intermediate Accounting -- Instant Access (Pearson+)

Ch. 22 - Prob. 22.1Q Ch. 22 - Prob. 22.2Q Ch. 22 - Prob. 22.3Q Ch. 22 - Prob. 22.4Q Ch. 22 - Prob. 22.5Q Ch. 22 - How do firms reclassify gains and losses on the...Ch. 22 - Prob. 22.7Q Ch. 22 - Prob. 22.8Q Ch. 22 - Prob. 22.9Q Ch. 22 - Prob. 22.10Q

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