INTER. ACCOUNTING - CONNECT+ALEKS ACCESS
10th Edition
ISBN: 9781264770335
Author: SPICELAND
Publisher: MCG
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Discuss arguments supporting the need for improving the Statement of Cash Flows(SCF). What suggestions do Broom and the authors of the text make regarding improvement?
a. Recreate the income statement and balance sheet using formulas wherever possible. Each statement should be on a separate worksheet. Try to duplicate the formatting exactly.
b. On another worksheet, create a statement of cash flows for 2020. Do not enter any numbers directly on this worksheet. All formulas should be linked directly to the source on previous worksheets.
C. Using Excel's outlining feature, create an outline on the statement of cash flows that, when collapsed, shows only the subtotals for each section.
d. Suppose that sales were $425,000 in 2020 rather than $412,500. What is the 2020 net income and retained earnings?
e. Undo the changes from part d, and change the tax rate to 20%. What is the 2020 net income and retained earnings?
Explain the purpose of SFAC No. 7: “Using Cash Flow Information and Present Valuein Accounting Measurements.
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- Using the financial statements and additional information below, construct an indirect cash flow statement in Excel for year 4. As long as you are following general cash flow formatting rules (e.g. operating section, investing section, financing section), you can format it as you see fit. Remember that these reports should be clean, easy to read and understand, and useful for decision-making purposes.arrow_forwardExplain the difference between the two methods used to prepare the operating section of the statement of cash flows. How do the results of these two approaches compare?arrow_forwardUse a spreadsheet and the following financial information from Mineola Companys financial statements to build a template that automatically calculates the net operating cash flow. It should be suitable for use in preparing the operating section of the statement of cash flows (indirect method) for the year 2018.arrow_forward
- Identify the section of the statement of cash flows (a–d) where each of the following items would be reported.a. Operating activitiesb. Financing activitiesc. Investing activitiesd. Schedule of noncash financing and investing Increase in income taxes payable Where does this will be on the cash flow statement ?arrow_forwardIn addition to the three basic financial statements, which of the following is also a required financial statement? (C17L01) Select one a the Statement of Cash Flows Ob. the "Cash Reconciliation" the "Cash Budget" d. the Statement of Cash eflows and Outflowsarrow_forwardRead CA23-5 found in the end of chapter materials of Chapter 23 and answer the related questions. CA23-5. (Purpose and Elements of SCF) GAAP requires the statement of cash flows be presented when financial statements are prepared. Instructions (a) Explain the purposes of the statement of cash flows. (b) List and describe the three categories of activities that must be reported in the statement of cash flows. (c) Identify and describe the two methods that are allowed for reporting cash flows from operations. (d) Describe the financial statement presentation of noncash investing and financing transactions. Include in your description an example of a noncash investing and financing transaction.arrow_forward
- Indicate for each of the following what should be disclosed on a statement of cash flows (indirect method). If not disclosed, select "Not shown." There may be more than one answer for some items. For an item that is added to net income, select "Add," and for an item that is deducted from net income, select "Deduct." Show financing and investing outflows in parentheses. For example, an answer might be: Deduct $4,700 or Investing ($31,000). If the item is a noncash transaction that should be disclosed separately, select "Noncash $40,000."arrow_forwardIndicate for each of the following what should be disclosed on a statement of cash flows (indirect method). If not disclosed, select "Not shown." There may be more than one answer for some items. For an item that is added to net income, select "Add," and for an item that is deducted from net income, select "Deduct." Show financing and investing outflows in parentheses. For example, an answer might be: Deduct $4,700 or Investing ($31,000). If the item is a noncash transaction that should be disclosed separately, select "Noncash $40,000."arrow_forwardWhich of the following best describes the indirect method of preparing the operating activities section of the statement of cash flows? a. Net income reconciled from accrual basis to cash basis.b. A list of cash inflows and cash outflows from transactions involving the purchase and sale of longterm assets and current investments.c. A list of cash inflows and cash outflows from transactions related to revenue and expense activities.d. A list of cash inflows and cash outflows from transactions with lenders and stockholders.arrow_forward
- The cash flows from investment activities portion of the statement of cash flows would comprise the following items:arrow_forwardWhich of the following statements about the statement of cash flows is correct? Question 277 options: The direct method is more consistent with the primary purpose of the statement of cash flows. The indirect method starts with income from continuing operations. The direct method is known as the reconciliation method. All of these answers are correct.arrow_forwardIndicate for each of the following what should be disclosed on a statement of cash flows (SCF) (indirect method). If not disclosed, select "Not shown." If an item is a noncash transaction that should be shown separately, select "noncash." If an item is added to net income, select "Add," and if an item is deducted from net income, select "Deduct." Show financing and investing outflows in parentheses. For example, an answer might be: Deduct $4,700 or Investing ($31,000). There is more than one answer for some items. Statement of Cash Flows (Indirect Method) Disclosure Effect on Net Income Effect on Cash Flows (a) For 2021, income before an extraordinary loss was $402,500. A tornado damaged a building and its contents. The proceeds from insurance companies totaled $118,500, which was $50,500 less than the book values. The tax rate was 30%.…arrow_forward
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