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 compare: To compare the direct method and the indirect method for reporting cash flows from operating activities.

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Answer 1

Question

Chapter 23, Problem 7P

To determine

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 compare: To compare the direct method and the indirect method for reporting cash flows from operating activities.

To determine

(b) To determine: To determine the statement of cash flow using direct method as below.

To determine

(c) To determine: To determine net cash flow from operating activities using indirect method.

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For the year ended December 31, 2020, Malek Inc. earned an ROI of 12.5%. Sales for the year were $25 million, and the average asset turnover was 4.0. Average stockholders' equity was $3.5 million. Required: a. Calculate Malek Inc.'s margin and net income. b. Calculate Malek Inc.'s return on equity.

White Co. incurs a cost of $17 per pound to produce Product X, which it sells for $25 per pound. The company can further process Product X to produce Product Y. Product Y would sell for $31 per pound and would require an additional cost of $15 per pound to be produced. The differential cost of producing Product Y is: a. $15 per pound b. $26 per pound c. $13 per pound d. $10 per pound correct answer

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Answer 2

Question

Chapter 23, Problem 7P

To determine

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 compare: To compare the direct method and the indirect method for reporting cash flows from operating activities.

To determine

(b) To determine: To determine the statement of cash flow using direct method as below.

To determine

(c) To determine: To determine net cash flow from operating activities using indirect method.

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Answer 3

Question

Chapter 23, Problem 7P

To determine

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 compare: To compare the direct method and the indirect method for reporting cash flows from operating activities.

To determine

(b) To determine: To determine the statement of cash flow using direct method as below.

To determine

(c) To determine: To determine net cash flow from operating activities using indirect method.

Expert Solution & Answer

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Answer 4

Question

Chapter 23, Problem 7P

To determine

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 compare: To compare the direct method and the indirect method for reporting cash flows from operating activities.

To determine

(b) To determine: To determine the statement of cash flow using direct method as below.

To determine

(c) To determine: To determine net cash flow from operating activities using indirect method.

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Answer 5

Chapter 23, Problem 7P

To determine

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 compare: To compare the direct method and the indirect method for reporting cash flows from operating activities.

To determine

(b) To determine: To determine the statement of cash flow using direct method as below.

To determine

(c) To determine: To determine net cash flow from operating activities using indirect method.

Answer 6

Chapter 23, Problem 7P

To determine

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 compare: To compare the direct method and the indirect method for reporting cash flows from operating activities.

Answer 7

Chapter 23, Problem 7P

To determine

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 compare: To compare the direct method and the indirect method for reporting cash flows from operating activities.

Answer 8

To determine

(b) To determine: To determine the statement of cash flow using direct method as below.

Answer 9

To determine

(b) To determine: To determine the statement of cash flow using direct method as below.

Answer 10

To determine

(c) To determine: To determine net cash flow from operating activities using indirect method.

Answer 11

To determine

(c) To determine: To determine net cash flow from operating activities using indirect method.

Answer 12

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Answer 13

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Answer 14

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Answer 15

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 flow using direct method as below.

(c) To determine: To determine net cash flow from operating activities using indirect method.

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Chapter 23 Solutions