Question
In: Accounting
Exercise 13A-2 Net Cash Provided by Operating Activities [LO13-4] Wiley Company’s income statement for Year 2...
Exercise 13A-2 Net Cash Provided by Operating Activities [LO13-4] Wiley Company’s income statement for Year 2 follows: Sales $ 150,000 Cost of goods sold 90,000 Gross margin 60,000 Selling and administrative expenses 40,000 Income before taxes 20,000 Income taxes 8,000 Net income $ 12,000 The company’s selling and administrative expense for Year 2 includes $7,500 of depreciation expense. Selected balance sheet accounts for Wiley at the end of Years 1 and 2 are as follows: Year 2 Year 1 Current Assets Accounts receivable $ 40,000 $ 30,000 Inventory $ 54,000 $ 45,000 Prepaid expenses $ 8,000 $ 6,000 Current Liabilities Accounts payable $ 35,000 $ 28,000 Accrued liabilities $ 5,000 $ 8,000 Income taxes payable $ 2,000 $ 2,500 Required: 1. Using the direct method, convert the company’s income statement to a cash basis. 2. Assume that during Year 2 Wiley had a $9,000 gain on sale of investments and a $3,000 loss on the sale of equipment. Would these transactions affect the computation in (1) above?
Solutions
ekkarill92 answered 2 years agoRelated Solutions
Exercise 13-2 Net Cash Provided by Operating Activities [LO13-2] For the just completed year, Hanna Company...
Exercise 13-2 Net Cash Provided by Operating Activities
[LO13-2]
For the just completed year, Hanna Company had net income of
$35,000. Balances in the company’s current asset and current
liability accounts at the beginning and end of the year were as
follows:
December 31
End of Year
Beginning of Year
Current assets:
Cash and cash equivalents
$
30,000
$
40,000
Accounts receivable
$
125,000
$
106,000
Inventory
$
213,000
$
180,000
Prepaid expenses
$
6,000
$
7,000
Current liabilities:
Accounts...
Net cash provided by Operating activities
Please calculate the Net cash provided by Operating activities:
Carter Company’s income statement and cash flow from operating activities (indirect method) are provided as follows ($ thousands):
Interpreting Cash Flow from Operating ActivitiesCarter Company’s income statement and cash flow from operating
activities (indirect method) are provided as follows ($
thousands):Income statementRevenue$400Cost of goods sold215Gross profit185Operating expenses110Operating income75Interest expense25Income before taxes50Income tax expense15Net income$35Cash flow from operating
activitiesNet income$35Plus depreciation expense70Operating asset adjustmentsLess increase in accounts receivable(25)Less increase in inventories(50)Less increase in prepaid rent(5)Plus increase in accounts payable65Plus increase in income tax payable5Cash flow from operating activities$95For each of the four statements below, determine whether the
statement is...
Exercise 12-5 Net Cash Provided by Operating Activities [LO12-2] Changes in various accounts and gains and...
Exercise 12-5 Net Cash Provided by Operating Activities
[LO12-2]
Changes in various accounts and gains and losses on the sale of
assets during the year for Argon Company are given below:
Item
Amount
Accounts
receivable
$
79,000
decrease
Inventory
$
118,000
increase
Prepaid
expenses
$
3,600
decrease
Accounts
payable
$
42,000
decrease
Accrued
liabilities
$
9,300
increase
Income taxes
payable
$
15,700
increase
Sale of
equipment
$
8,300
gain
Sale of long-term
investments
$
12,000
loss
Required:
For each...
The income statement and a schedule reconciling cash flows from operating activities to net income are...
The income statement and a schedule reconciling cash flows from
operating activities to net income are provided below for Macrosoft
Corporation.
MACROSOFT CORPORATION
Income Statement
For the Year Ended December 31, 2021
($ in millions)
Revenues and gains:
Sales
$
320.00
Gain on sale of cash equivalents
2.50
Gain on sale of investments
24.50
$
347.00
Expenses and loss:
Cost of goods sold
$
125.00
Salaries
40.50
Interest expense
12.50
Insurance
20.50
Depreciation
10.50
Patent amortization
4.50
Loss on sale...
The income statement and a schedule reconciling cash flows from operating activities to net income are...
The income statement and a schedule reconciling cash flows from
operating activities to net income are provided below ($ in
thousands) for Peach Computers.
PEACH COMPUTERS
Income Statement
For the Year Ended December 31, 2021
Sales
$
320.0
Cost of goods sold
(160.0
)
Gross margin
160.0
Salaries expense
$
35.0
Insurance expense
12.0
Depreciation expense
5.0
Loss on sale of land
3.0
55.0
Income before tax
105.0
Income tax expense
(52.5
)
Net income
$
52.5
Reconciliation of Net...
The income statement and a schedule reconciling cash flows from operating activities to net income are...
The income statement
and a schedule reconciling cash flows from operating activities to
net income are provided below for Mike Roe Computers.
MIKE ROE COMPUTERS
Income Statement
For the Year Ended December 31, 2021
($ in millions)
Sales
$
150.20
Cost of goods
sold
(90.00
)
Gross
margin
60.20
Salaries
expense
$
18.20
Insurance
expense
12.00
Depreciation
expense
4.50
Interest
expense
5.50
(40.20
)
Gains and
losses:
Gain on sale of
equipment
11.00
Loss on sale of
land
(2.00
)...
The income statement and a schedule reconciling cash flows from operating activities to net income are...
The income statement and a schedule reconciling cash flows from
operating activities to net income are provided below ($ in
thousands) for Peach Computers.
PEACH COMPUTERS
Income Statement
For the Year Ended December 31, 2021
Sales
$
500.0
Cost of goods sold
(250.0
)
Gross margin
250.0
Salaries expense
$
59.0
Insurance expense
36.0
Depreciation expense
17.0
Loss on sale of land
15.0
127.0
Income before tax
123.0
Income tax expense
(61.5
)
Net income
$
61.5
Reconciliation of Net...
The income statement and a schedule reconciling cash flows from operating activities to net income are...
The income statement and a schedule reconciling cash flows from
operating activities to net income are provided below for Mike Roe
Computers.
MIKE ROE COMPUTERS
Income Statement
For the Year Ended December 31, 2021
($ in millions)
Sales
$
148.00
Cost of goods sold
(89.00
)
Gross margin
59.00
Salaries expense
$
18.00
Insurance expense
11.00
Depreciation expense
4.00
Interest expense
5.30
(38.30
)
Gains and losses:
Gain on sale of equipment
10.00
Loss on sale of land
(1.00
)...
The income statement and a schedule reconciling cash flows from operating activities to net income are...
The income statement and a schedule reconciling cash flows from
operating activities to net income are provided below ($ in
millions) for Mike Roe Computers.
MIKE ROE COMPUTERS
Income Statement
For the Year Ended December 31, 2018
Sales
$
148.20
Cost of goods sold
(89.10
)
Gross margin
59.10
Salaries expense
$
18.20
Insurance expense
11.20
Depreciation expense
4.10
Interest expense
5.10
(38.60
)
Gains and losses:
Gain on sale of equipment
10.20
Loss on sale of land
(1.20
)...
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