Question
In: Accounting
Interest Expense is treated as an operating activity item in the Statement of Cash Flows while...
Interest Expense is treated as an operating activity item in the Statement of Cash Flows while it is listed as a financing activity item in the Income Statement. Prepare a 1-2 page report listing the reasons why interest should be an operating or financing activity item and recommend your position on how interest should be listed (operating or financing).
Solutions
ekkarill92 answered 1 year agoRelated Solutions
While examining a company's cash flow statement, you notice that the section "cash flows from operating...
While examining a company's cash flow statement, you notice that
the section "cash flows from operating activities" includes items
like "cash collected from customer" and "cash paid to suppliers."
From this info, you can conclude that the company used which
specific method of preparing the cash flow statement?
A direct method
B indirect method
C direct/indirect method hybrid
D A conclusion as to the method used cannot be drawn based on the
info provided
Statement of Cash Flows—A method of reporting the cash flows from operating activities as the net...
Statement of Cash Flows—A method of reporting the cash flows
from operating activities as the net income from operations
adjusted for all deferrals of past cash receipts and payments and
all accruals of expected future cash receipts and payments.Indirect
Method
The comparative balance sheet of Yellow Dog Enterprises Inc. at
December 31, 20Y8 and 20Y7, is as follows:
Dec. 31, 20Y8
Dec. 31, 20Y7
Assets
Cash
$74,970
$91,680
Accounts receivable (net)
115,190
123,590
Merchandise inventory
164,570
153,180
Prepaid expenses
6,700...
Statement of Cash Flows—A method of reporting the cash flows from operating activities as the net...
Statement of Cash Flows—A method of reporting the cash flows
from operating activities as the net income from operations
adjusted for all deferrals of past cash receipts and payments and
all accruals of expected future cash receipts and payments.Indirect
Method
List the errors you find in the following statement of cash
flows. The cash balance at the beginning of the year was $240,000.
All other amounts are correct, except the cash balance at the end
of the year.
Shasta Inc....
Statement of Cash Flows—A method of reporting the cash flows from operating activities as the net...
Statement of Cash Flows—A method of reporting the cash flows
from operating activities as the net income from operations
adjusted for all deferrals of past cash receipts and payments and
all accruals of expected future cash receipts and payments.Indirect
Method
The comparative balance sheet of Merrick Equipment Co. for
December 31, 20Y9 and 20Y8, is as follows:
Dec. 31, 20Y9
Dec. 31, 20Y8
Assets
Cash
$244,410
$227,360
Accounts receivable (net)
88,540
81,660
Inventories
249,940
241,760
Investments
0
93,660
Land
128,200...
Statement of Cash Flows The indirect method of preparing Cash Flows from Operating Activities in the...
Statement of Cash Flows
The indirect method of preparing Cash Flows from Operating
Activities in the Statement of Cash Flows starts with accrual
net income, and makes adjustments to convert it to net cash
provided (used) by operating activities.
REQUIRED: Explain how and
why the following three items would be handled in the
conversion of accrual net income to net cash provided (used) by
operating activities.
(1) Depreciation Expense
(2) An increase in Accounts Receivable
(3) An increase in Wages...
Statement of Cash Flows—A method of reporting the cash flows from operating activities as the net...
Statement of Cash Flows—A method of reporting the cash flows
from operating activities as the net income from operations
adjusted for all deferrals of past cash receipts and payments and
all accruals of expected future cash receipts and payments.Indirect
Method
The comparative balance sheet of Merrick Equipment Co. for
December 31, 20Y9 and 20Y8, is as follows:
Dec. 31, 20Y9
Dec. 31, 20Y8
Assets
Cash
$284,360
$265,430
Accounts receivable (net)
103,010
95,330
Inventories
290,800
282,260
Investments
0
109,350
Land
149,150...
The income statement and the cash flows from the operating activities section of the statement of...
The income statement and the cash flows from the operating
activities section of the statement of cash flows are provided
below for Syntric Company. The merchandise inventory account
balance neither increased nor decreased during the reporting
period. Syntric had no liability for insurance, deferred income
taxes, or interest at any time during the period.
SYNTRIC COMPANY
Income Statement
For the Year Ended December 31, 2021
($ in thousands)
Sales
$
283.4
Cost of goods sold
(161.4
)
Gross margin
122.0...
The income statement and the cash flows from the operating activities section of the statement of...
The income statement and the cash flows from the operating
activities section of the statement of cash flows are provided
below for Syntric Company. The merchandise inventory account
balance neither increased nor decreased during the reporting
period. Syntric had no liability for insurance, deferred income
taxes, or interest at any time during the period.
SYNTRIC COMPANY
Income Statement
For the Year Ended December 31, 2018
($ in 000s)
Sales
$
280.2
Cost of goods sold
(175.4
)
Gross margin
104.8...
The income statement and the cash flows from the operating activities section of the statement of...
The income statement and the cash flows from the operating
activities section of the statement of cash flows are provided
below for Syntric Company. The merchandise inventory account
balance neither increased nor decreased during the reporting
period. Syntric had no liability for insurance, deferred income
taxes, or interest at any time during the period.
SYNTRIC COMPANY
Income Statement
For the Year Ended December 31, 2021
($ in thousands)
Sales
$
276.8
Cost of goods sold
(182.0
)
Gross margin
94.8...
The income statement and the cash flows from the operating activities section of the statement of...
The income statement and the cash flows from the operating
activities section of the statement of cash flows are provided
below for Syntric Company. The merchandise inventory account
balance neither increased nor decreased during the reporting
period. Syntric had no liability for insurance, deferred income
taxes, or interest at any time during the period.
SYNTRIC COMPANY
Income Statement
For the Year Ended December 31, 2021
($ in thousands)
Sales
$
283.1
Cost of goods sold
(175.6
)
Gross margin
107.5...
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