Explanation Cash Flow Statement: Cash flow statement refers to the financial statement that shows the summary of increase or decrease in cash in a company for a particular period of time. Cash can be increased or decreased through three activities that are operating, investing and financing activities. Calculation of net cash flow is: H Company Partial statement of cash flows For the current year ended Operating Activities Amount ($) Cash collected from customers (working note) 2,481,000 Less: Cash paid to suppliers (working note) (567,000) Less: Cash paid to merchandise (1,242,000) Less: Cash paid for taxes (working note) (11,300) Net cash provided by operating activities 559,000 Table (1) Working Note: Calculation of cash collected from customers is: Particulars Amount ($) Sales 2,452,000 Add: Decrease in accounts receivable 29,000

2nd Edition

ISBN: 9780134730370

Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella

Publisher: PEARSON

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Chapter 6, Problem 6.16E

To determine

The net cash flow from operating activities under the direct reporting format.

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Chapter 6, Problem 6.15E

Chapter 6, Problem 6.17E

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Selected data derived from the income and balance sheet of National Beverage Co. for a recent year are as follows: required: A. Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method for National Beverage Co. B. Interpret your results in part (a).

Use the following income statement and balance sheet to determine the net cash provided by operating activities under the indirect method. Sales Cost of goods sold Depreciation expense Operating expenses (excluding depreciation) Other gains (losses) Gain on sale of equipment Income before taxes Income tax expense Net income At December 31 Assets Cash Income Statement For Year Ended December 31, Year 2 Total assets Accounts receivable Inventory Equipment Accumulated depreciation - Equipment Liabilities Accounts payable Income taxes payable Total liabilities Equity Balance Sheets Common stock Paid-in Capital in excess of par value Retained earnings Total equity Total liabilities and equity $ 334,400 41,500 134,000 $ 529,500 (509,900) 6,900 $ 26,500 (6,500) $ 20,000 Year 2 $ 65,200 24,400 61,400 274,000 (114,000) $ 311,000 $ 31,800 3,600 $ 35,400 $ 123,000 19,700 132,900 $ 275,600 $ 311,000 Year 1 $ 57,500 30,700 53,800 239,000 (104,500) $ 276,500 $ 25,400 4,600 $ 30,000 $ 123,000 19,700…

A statement of cash flows prepared in accordance with IAS7 Statements of cash flows opens with the calculation of cash flows from operating activities from the net profit before taxation. Which of the following lists of items consists only of items that would be ADDED to net profit before taxation in that calculation? A. Decrease in inventories, depreciation, profit on sale of non-current assets. В. Increase in trade payables, decrease in trade receivables, profit on sale of non-current assets. C. Loss on sale of non-current assets, depreciation, increase in trade receivables. D. Decrease in trade receivables, increase in trade payables, loss on sale of non-current assets.

Chapter 6 Solutions

Intermediate Accounting (2nd Edition)

Ch. 6 - What are the limitations of the balance sheet?Ch. 6 - What does a firms liquidity measure?Ch. 6 - Prob. 6.3Q Ch. 6 - What are the four major components of stockholders...Ch. 6 - Prob. 6.5Q Ch. 6 - Prob. 6.6Q Ch. 6 - Where is accumulated other comprehensive income...Ch. 6 - Prob. 6.8Q Ch. 6 - Prob. 6.9Q Ch. 6 - What are the two main balance sheet formats?...

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The net cash flow from operating activities under the direct reporting format.

Solution Summary: The author explains that the net cash flow from operating activities under the direct reporting format is 559,000.

The net cash flow from operating activities under the direct reporting format.

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