In: Accounting
1.
Classifying Cash Flows
Identify whether each of the following would be reported as an operating, investing, or financing activity on the statement of cash flows:
a. Retirement of bonds payable | Financing |
b. Purchase of inventory for cash | |
c. Cash sales | |
d. Repurchase of common stock | |
e. Payment of accounts payable | |
f. Disposal of equipment |
2.
Adjustments to Net Income—Indirect Method
Omni Corporation's accumulated depreciation—equipment account increased by $9,600, while $6,200 of patent amortization was recognized between balance sheet dates. There were no purchases or sales of depreciable or intangible assets during the year. In addition, the income statement showed a loss of $7,300 from the sale of land.
Reconcile a net income of $109,600 to net cash flow from operating activities.
3.
Changes in Current Operating Assets and Liabilities—Indirect Method
Victor Corporation's comparative balance sheet for current assets and liabilities was as follows:
Dec. 31, Year 2 | Dec. 31, Year 1 | |||
Accounts receivable | $23,900 | $20,100 | ||
Inventory | 60,200 | 67,600 | ||
Accounts payable | 13,500 | 16,700 | ||
Dividends payable | 19,000 | 18,000 |
Adjust net income of $79,700 for changes in operating assets and
liabilities to arrive at net cash flow from operating
activities.
$
1.
a. Retirement of bonds payable | Financing |
b. Purchase of inventory for cash | Operating |
c. Cash sales | Operating |
d. Repurchase of common stock | Financing |
e. Payment of accounts payable | Operating |
f. Disposal of equipment | Investing |
2.
Statement of cash flows (partial)
Net income | 109,600 |
Adjustments to reconcile net income to net cash provided by operating activities | |
Depreciation expense | 9,600 |
Amortization expense | 6,200 |
loss on sale of land | 7,300 |
Net cash provided by Operating Activities | $132,700 |
3.
Statement of cash flows (PARTIAL)
Particulars |
$ |
$ |
Cash flow from Operating Activities |
||
Net income |
79,700 |
|
Changes in current operating assets and liabilities: |
||
Accounts receivable increase |
- 3,800 |
|
Inventory decrease |
7,400 |
|
Accounts payable decrease |
- 3,200 |
|
Net cash provided by Operating Activities |
$80,100 |