Statement of cash flows : It represents net cash flow available after taking into consideration operating, financing, and investing expenses for a given financial year. Direct method: It reports cash receipts and disbursements arising out of operating activities. Difference between these amounts helps us arrive at the net cash flows from operating activities. Indirect method: Indirect method is the most widely used method to compute cash (used) provided by operating activities. Under this method net cash flow is determined by adding back noncash expense and losses to net income and deducting all noncash income and gains from net income. (a) To prepare: To prepare cash flow statements for operating activities (Use direct method).

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Answer 1

Question

Chapter 23, Problem 6P

To determine

Statement of cash flows: It represents net cash flow available after taking into consideration operating, financing, and investing expenses for a given financial year.

Direct method: It reports cash receipts and disbursements arising out of operating activities. Difference between these amounts helps us arrive at the net cash flows from operating activities.

Indirect method: Indirect method is the most widely used method to compute cash (used) provided by operating activities. Under this method net cash flow is determined by adding back noncash expense and losses to net income and deducting all noncash income and gains from net income.

(a) To prepare: To prepare cash flow statements for operating activities (Use direct method).

To determine

(b) To determine: To determine the statement of cash flows using the indirect method.

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Ocean Corp. has a single class of shares. As its year ended December 31, 2025, the company had 5,000,000 shares issued and outstanding. On the stock exchange, these shares were trading at around $7. In the company's accounts, these shares had a value of $50,000,000. The equity accounts also show $650,000 of contributed surplus from previous repurchases of shares. On January 15, 2026, Ocean repurchased and cancelled 250,000 shares at a cost of $7 per share. Later in the year, on August 20, the company repurchased and cancelled a further 475,000 shares at a cost of $14 per share. Required Record the journal entries for the two share transactions in 2026.

Financial Accounting

Answer 2

Question

Chapter 23, Problem 6P

To determine

Statement of cash flows: It represents net cash flow available after taking into consideration operating, financing, and investing expenses for a given financial year.

Direct method: It reports cash receipts and disbursements arising out of operating activities. Difference between these amounts helps us arrive at the net cash flows from operating activities.

Indirect method: Indirect method is the most widely used method to compute cash (used) provided by operating activities. Under this method net cash flow is determined by adding back noncash expense and losses to net income and deducting all noncash income and gains from net income.

(a) To prepare: To prepare cash flow statements for operating activities (Use direct method).

To determine

(b) To determine: To determine the statement of cash flows using the indirect method.

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Answer 3

Question

Chapter 23, Problem 6P

To determine

Statement of cash flows: It represents net cash flow available after taking into consideration operating, financing, and investing expenses for a given financial year.

Direct method: It reports cash receipts and disbursements arising out of operating activities. Difference between these amounts helps us arrive at the net cash flows from operating activities.

Indirect method: Indirect method is the most widely used method to compute cash (used) provided by operating activities. Under this method net cash flow is determined by adding back noncash expense and losses to net income and deducting all noncash income and gains from net income.

(a) To prepare: To prepare cash flow statements for operating activities (Use direct method).

To determine

(b) To determine: To determine the statement of cash flows using the indirect method.

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Answer 4

Question

Chapter 23, Problem 6P

To determine

Statement of cash flows: It represents net cash flow available after taking into consideration operating, financing, and investing expenses for a given financial year.

Direct method: It reports cash receipts and disbursements arising out of operating activities. Difference between these amounts helps us arrive at the net cash flows from operating activities.

Indirect method: Indirect method is the most widely used method to compute cash (used) provided by operating activities. Under this method net cash flow is determined by adding back noncash expense and losses to net income and deducting all noncash income and gains from net income.

(a) To prepare: To prepare cash flow statements for operating activities (Use direct method).

To determine

(b) To determine: To determine the statement of cash flows using the indirect method.

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Answer 5

Chapter 23, Problem 6P

To determine

Statement of cash flows: It represents net cash flow available after taking into consideration operating, financing, and investing expenses for a given financial year.

Direct method: It reports cash receipts and disbursements arising out of operating activities. Difference between these amounts helps us arrive at the net cash flows from operating activities.

Indirect method: Indirect method is the most widely used method to compute cash (used) provided by operating activities. Under this method net cash flow is determined by adding back noncash expense and losses to net income and deducting all noncash income and gains from net income.

(a) To prepare: To prepare cash flow statements for operating activities (Use direct method).

To determine

(b) To determine: To determine the statement of cash flows using the indirect method.

Answer 6

Chapter 23, Problem 6P

To determine

Statement of cash flows: It represents net cash flow available after taking into consideration operating, financing, and investing expenses for a given financial year.

Direct method: It reports cash receipts and disbursements arising out of operating activities. Difference between these amounts helps us arrive at the net cash flows from operating activities.

Indirect method: Indirect method is the most widely used method to compute cash (used) provided by operating activities. Under this method net cash flow is determined by adding back noncash expense and losses to net income and deducting all noncash income and gains from net income.

(a) To prepare: To prepare cash flow statements for operating activities (Use direct method).

Answer 7

Chapter 23, Problem 6P

To determine

Statement of cash flows: It represents net cash flow available after taking into consideration operating, financing, and investing expenses for a given financial year.

Direct method: It reports cash receipts and disbursements arising out of operating activities. Difference between these amounts helps us arrive at the net cash flows from operating activities.

Indirect method: Indirect method is the most widely used method to compute cash (used) provided by operating activities. Under this method net cash flow is determined by adding back noncash expense and losses to net income and deducting all noncash income and gains from net income.

(a) To prepare: To prepare cash flow statements for operating activities (Use direct method).

Answer 8

To determine

(b) To determine: To determine the statement of cash flows using the indirect method.

Answer 9

To determine

(b) To determine: To determine the statement of cash flows using the indirect method.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. 23 - Prob. 1Q Ch. 23 - Prob. 2Q Ch. 23 - Prob. 3Q Ch. 23 - Prob. 4Q Ch. 23 - Prob. 5Q Ch. 23 - Prob. 6Q Ch. 23 - Prob. 7Q Ch. 23 - Prob. 8Q Ch. 23 - Prob. 9Q Ch. 23 - Prob. 10Q

(b) To determine: To determine the statement of cash flows using the indirect method.

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Chapter 23 Solutions