Question
In: Accounting
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 | ||
| Salaries payable | 10,220 | 9,260 | ||
a. Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.
| Statement of Cash Flows (partial) | ||
| Cash flows from operating activities: | ||
| $ | ||
| Adjustments to reconcile net income to net cash flow from operating activities: | ||
| Changes in current operating assets and liabilities: | ||
| Net cash flow from operating activities | $ | |
b. If the direct method had been used, would
the net cash flow from operating activities have been the
same?
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Solutions
ekkarill92 answered 1 year 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 $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...
1. Cash Flows from Operating Activities—Indirect Method The net income reported on the income statement for...
1.
Cash Flows from Operating Activities—Indirect Method
The net income reported on the income statement for the current
year was $118,900. Depreciation recorded on store equipment for the
year amounted to $19,600. 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
$45,900
$42,230
Accounts receivable (net)
32,910
31,210
Merchandise inventory
44,940
47,510
Prepaid expenses
5,050
4,010
Accounts payable (merchandise creditors)
43,010
39,950...
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...
Cash Flows from Operating Activities—Indirect Method Staley Inc. reported the following data: Net income $417,900 Depreciation...
Cash Flows from Operating Activities—Indirect Method
Staley Inc. reported the following data:
Net income
$417,900
Depreciation expense
64,500
Loss on disposal of equipment
28,300
Increase in accounts receivable
24,400
Increase in accounts payable
11,400
Prepare the Cash Flows from Operating Activities section of the
statement of cash flows, using the indirect method. Use the minus
sign to indicate cash outflows, cash payments, decreases in cash,
or any negative adjustments.
Statement of Cash Flows (partial)Cash flows from operating
activities: $Adjustments to...
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