Question
In: Accounting
Exercise 21-17 Indirect method; reconciliation of net income to net cash flows from operating activities [LO21-4]...
Exercise 21-17 Indirect method; reconciliation of net income to net cash flows from operating activities [LO21-4]
The accounting records of EZ Company provided the data
below.
| Net income | $ | 54,750 | |
| Depreciation expense | 9,250 | ||
| Increase in inventory | 2,625 | ||
| Decrease in salaries payable | 1,725 | ||
| Decrease in accounts receivable | 3,500 | ||
| Amortization of patent | 675 | ||
| Amortization of premium on bonds | 2,975 | ||
| Increase in accounts payable | 6,250 | ||
| Cash dividends | 14,500 | ||
Prepare a reconciliation of net income to net cash flows from
operating activities. (Amounts to be deducted should be
indicated with a minus sign.)
Solutions
Expert Solution
| Net income | $54,750 |
| Adjustments to reconcile Net Income to net cash provided by Operating activities | |
| Depreciation expense | $9,250 |
| Increase in inventory | ($2,625) |
| Decrease in salaries payable | ($1,725) |
| Decrease in accounts receivable | $3,500 |
| Amortization of patent | $675 |
| Amortization of premium on bonds | $2,975 |
| Increase in accounts payable | $6,250 |
| Net Cash Provided by Operating activities | $73,050 |
| No. | Conceptual Notes |
| 1 | Cash Flow Statement reflects the Cash Inflows and Outflows during a period of time. |
| 2 | Effects of Non - Cash Transaction are adjusted from Net Income. |
| 3 | Depreciation Expense, Amortisation expenses are Added back to Net Income in Cash Flow Statement. |
| 4 | Decrease in Current Assets OR Increase in Current Liabilities are ADDED to Net Income |
| 5 | Increase in Current Assets OR Decrease in Current Liabilities are DEDUCTED from Net Income |
ekkarill92 answered 1 month agoRelated Solutions
Cash Flows from Operating Activities—Indirect Method The net income reported on the income statement for the...
Cash Flows from Operating Activities—Indirect Method
The net income reported on the income statement for the current
year was $123,300. Depreciation recorded on store equipment for the
year amounted to $20,300. Balances of the current asset and current
liability accounts at the beginning and end of the year are as
follows:
End of Year
Beginning of Year
Cash
$47,100
$42,860
Accounts receivable (net)
33,770
31,670
Inventories
46,110
48,220
Prepaid expenses
5,180
4,070
Accounts payable (merchandise creditors)
44,130
40,550
Wages payable...
Cash Flows from Operating Activities—Indirect Method The net income reported on the income statement for the...
Cash Flows from Operating Activities—Indirect Method
The net income reported on the income statement for the current
year was $313,300. Depreciation recorded on equipment and a
building amounted to $93,700 for the year. Balances of the current
asset and current liability accounts at the beginning and end of
the year are as follows:
End of Year
Beginning of Year
Cash
$78,330
$81,460
Accounts receivable (net)
99,320
100,520
Inventories
195,830
173,180
Prepaid expenses
10,890
11,490
Accounts payable (merchandise creditors)
87,490
90,910...
Cash Flows from Operating Activities—Indirect Method The net income reported on the income statement for the...
Cash Flows from Operating Activities—Indirect Method
The net income reported on the income statement for the current
year was $126,900. Depreciation recorded on store equipment for the
year amounted to $20,900. Balances of the current asset and current
liability accounts at the beginning and end of the year are as
follows:
End of Year
Beginning of Year
Cash
$48,220
$44,360
Accounts receivable (net)
34,570
32,780
Merchandise inventory
47,210
49,910
Prepaid expenses
5,300
4,210
Accounts payable (merchandise creditors)
45,180
41,960
Wages...
Cash Flows from Operating Activities—Indirect Method The net income reported on the income statement for the...
Cash Flows from Operating Activities—Indirect Method
The net income reported on the income statement for the current
year was $261,800. Depreciation recorded on equipment and a
building amounted to $78,300 for the year. Balances of the current
asset and current liability accounts at the beginning and end of
the year are as follows:
End of Year
Beginning of Year
Cash
$71,730
$74,600
Accounts receivable (net)
90,950
92,060
Inventories
179,330
158,600
Prepaid expenses
9,970
10,520
Accounts payable (merchandise creditors)
80,120
83,250...
Cash Flows from Operating Activities—Indirect Method The net income reported on the income statement for the...
Cash Flows from Operating Activities—Indirect Method
The net income reported on the income statement for the current
year was $235,000. Depreciation recorded on equipment and a
building amounted to $70,300 for the year. Balances of the current
asset and current liability accounts at the beginning and end of
the year are as follows:
End of Year
Beginning of Year
Cash
$63,450
$66,620
Accounts receivable (net)
80,450
82,210
Inventories
158,630
141,630
Prepaid expenses
8,820
9,390
Accounts payable (merchandise creditors)
70,870
74,350...
Cash Flows from Operating Activities—Indirect Method The net income reported on the income statement for the...
Cash Flows from Operating Activities—Indirect Method
The net income reported on the income statement for the current
year was $133,500. Depreciation recorded on store equipment for the
year amounted to $22,000. Balances of the current asset and current
liability accounts at the beginning and end of the year are as
follows:
End of Year
Beginning of Year
Cash
$52,330
$48,140
Accounts receivable (net)
37,520
35,580
Inventories
51,230
54,160
Prepaid expenses
5,760
4,570
Accounts payable (merchandise creditors)
49,030
45,540
Wages payable...
Cash Flows from Operating Activities—Indirect Method The net income reported on the income statement for the...
Cash Flows from Operating Activities—Indirect Method
The net income reported on the income statement for the current
year was $128,700. Depreciation recorded on store equipment for the
year amounted to $21,200. Balances of the current asset and current
liability accounts at the beginning and end of the year are as
follows:
End of Year
Beginning of Year
Cash
$49,160
$44,740
Accounts receivable (net)
35,250
33,060
Merchandise inventory
48,130
50,330
Prepaid expenses
5,410
4,250
Accounts payable (merchandise creditors)
46,060
42,320
Wages...
Cash Flows from Operating Activities—Indirect Method The net income reported on the income statement for the...
Cash Flows from Operating Activities—Indirect Method
The net income reported on the income statement for the current
year was $144,400. Depreciation recorded on store equipment for the
year amounted to $23,800. Balances of the current asset and current
liability accounts at the beginning and end of the year are as
follows:
End of Year
Beginning of Year
Cash
$57,180
$52,030
Accounts receivable (net)
41,000
38,450
Merchandise inventory
55,980
58,530
Prepaid expenses
6,290
4,940
Accounts payable (merchandise creditors)
53,580
49,220
Wages...
Exercise 21-23 Cash flows from operating activities (direct method) [LO21-3] Portions of the financial statements for...
Exercise 21-23 Cash flows from operating activities (direct
method) [LO21-3]
Portions of the financial statements for Myriad Products are
provided below.
MYRIAD PRODUCTS COMPANY
Income Statement
For the Year Ended December 31, 2018
($ in millions)
Sales
$
880
Cost of goods sold
308
Gross margin
572
Salaries expense
$
145
Depreciation expense
96
Patent amortization expense
5
Interest expense
36
Loss on sale of land
4
286
Income before taxes
286
Income tax expense
143
Net Income
$
143...
Exercise 21-23 Cash flows from operating activities (direct method) [LO21-3] Portions of the financial statements for...
Exercise 21-23 Cash flows from operating activities (direct
method) [LO21-3]
Portions of the financial statements for Myriad Products are
provided below.
MYRIAD PRODUCTS COMPANY
Income Statement
For the Year Ended December 31, 2018
($ in millions)
Sales
$
620
Cost of goods sold
217
Gross margin
403
Salaries expense
$
85
Depreciation expense
72
Patent amortization expense
5
Interest expense
12
Loss on sale of land
3
177
Income before taxes
226
Income tax expense
113
Net Income
$
113...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- For Questions 1-3: consider the following code: public class A { private int number; protected String...
- You are tasked with assessing the health department’s intervention program in preventing recurrence of acute alcohol...
- Compare the MOSFET, JFET , and BJT and identify the reasons these devices behave differently. What...
- How would you use SAS Enterprise Miner to create a neural network model of your example?
- Explain the use of neural networking modeling in predictive analytics.
- Current Market Mix of Netflix, as detail as possible, please.
- This is all one question, thank you so much in advance! You must evaluate a proposal...
ADVERTISEMENT