Question
In: Accounting
Which of the following is shown on the indirect method statement of cash flows but not...
Which of the following is shown on the indirect method statement of cash flows but not the direct method statement of cash flows?
Select one:
a. 10% Stock Dividend
b. Dividends Paid
c. Amortization of Premium on Bonds Payable
d. Proceeds from Sale of Fixed Asset
e. Purchase of Treasury Stock
Solutions
Expert Solution
Answer - Option C i.e. Amortisation of premium on bonds payable.
Explanation:
Under the indirect method statement of cash flows, net income is taken as base and then adjusted for various non cash items like depreciation and amortisation etc., wheras under direct method of statement of cash flows only the cash transactions i.e. cash receipts and cash expenses are considered.
Hence Since option C is only the non cash item in this question is shown on the indirect method and all the other options i.e. a,b,d and e being cash items are shown under both the methods of cash flows.
ekkarill92 answered 2 years agoRelated Solutions
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For the Year Ended December 31,
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Cash flows from operating activities:
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Operating Section of Statement of Cash Flows (Indirect Method) Assume following are the income statement and...
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Method)
Assume following are the income statement and balance sheet for
Nike for the year ended May 31, 2012, and a forecasted income
statement and balance sheet for 2013.
Income
Statement
($
millions)
2012 actual
2013 Est.
Revenues
$ 18,627.0
$ 21,253.0
Cost of sales
10,239.6
11,689.0
Gross margin
8,387.4
9,564.0
Selling and administrative expense
5,953.7
6,801.0
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2,433.7
2,763.0
Interest income, net
77.1
77.1
Other (expense) income, net
(7.9)
(7.9)...
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The indirect method of preparing Cash Flows from Operating
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REQUIRED: Explain how and
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Accounts payble increaded by 20,400
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2018
Change
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$131,500
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102,000
71,000
31,000
Inventory
101,000
70,000
31,000
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4,000
28,000
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Prepaid
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20,000
26,000
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Long-term assets
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296,000
175,000
121,000
Land
52,000
91,000
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53,000
53,000
0
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645,500
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41,000
69,000
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Based on the following information, prepare the statement of cash flows using the indirect method.  
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Balance Sheet
2019
2018
Change
Current assets:
Cash
$108,000
$131,500
($23,500)
Accounts
receivable
102,000
71,000
31,000
Inventory
101,000
70,000
31,000
Marketable
securities
4,000
28,000
(24,000)
Prepaid
expenses
20,000
26,000
(6,000)
Long-term assets
Plant & equipment
(net)
296,000
175,000
121,000
Land
52,000
91,000
(39,000)
Patent
53,000
53,000
0
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736,000
645,500
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Balance Sheet
2019
2018
Change
Current assets:
Cash
$108,000
$121,500
($13,500)
Accounts
receivable
102,000
141,000
(39,000)
Inventory
101,000
60,000
41,000
Marketable
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18,000
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Prepaid
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185,000
111,000
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