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Question:  What is the net cash provided by operating activities? Assets Cash                           &nbsp

Question:  What is the net cash provided by operating activities?

Assets

Cash                                                                                          $500,000

Accounts Receivable                                                                  700,000                             

Inventory                                                                                     300,000

Property, Plant & Equipment                                                       900,000

Accumulated Depreciation                                                    (100,000)            

Total Assets                                                                           $2,300,000

Liabilities & Equity

Accounts Payable                                                                       $300,000

Notes Payable                                                                            1,000,000

Common Stock                                                                             500,000

Retained Earnings                                                                        500,000

Total Liabilities & Equity                                                      $2,300,000

Journal Entries for January 2013

Transaction 1: Sales Return

The buyer returns merchandise to the seller.

Journal Entry:                                                                                   Dr.                              Cr.

Sales Returns & Allowances                                                      22,000

Accounts Receivable                                                                                           22,000

Transaction 2: Sales Discounts

Description: Recorded collection within 2/10, n/30 period.

Journal Entry:                                                                                    Dr.                              Cr.

Cash                                                                                                24,500

  Sales Discounts                                                                                    500

                  Accounts Receivable                                                                                           25,000

Journal Entry:                                                                                       Dr.                             Cr.

Cash                                                                                                 155,000

Sales Revenue                                                                                                      155,000

Transaction 4: Cost Flow Assumption

Recorded cost of goods sold under one of the cost flow assumptions.

Journal Entry:                                                                                     Dr.                             Cr.

Cost of Goods Sold                                                                           45,000

                Inventory                                                                                                              45,000                                                                                              

Transaction 5: Recording Estimated Uncollectible

Description: The credit manager estimates that $16,000 of sales will be uncollectible.

Journal Entry:                                                                                      Dr.                             Cr.

Bad Debts Expense                                                                         16,000

                Allowance for Doubtful Accounts                                                                        16,000

Transaction 6: Write-off of an uncollectible account

Description: The credit manager authorizes a write-off of a $5,500 balance owed by a customer.

Journal Entry:                                                                                      Dr.                             Cr.

Allowance for Doubtful Accounts                                                   5,500

                Accounts Receivable                                                                                             5,500

Transaction 7: Depreciation Expense

Recorded depreciation expense under one of the depreciation methods.

Journal Entry:                                                                                    Dr.                               Cr.

Depreciation Expense                                                                    12,000

Accumulated Depreciation                                                                                  12,000

                  Transaction 8: Investment by Stockholders
                  Description: Invested $55,000 cash in the business in exchange for common stock.
                  Journal Entry:                                                                                      Dr.                               Cr.

                  Cash                                                                                                  55,000

                                    Common Stock                                                                                                     55,000

                  Transaction 9: Dividends

                  Description: The corporation pays a dividend of $4,700 in cash to the stockholders.

                  Journal Entry:                                                                                      Dr.                              Cr.

                  Dividends                                                                                            4,700

                                    Cash                                                                                                                      4,700

                  Transaction 10: Purchase of Equipment

                  Description: Purchases computer equipment for $7,800 cash.

                  Journal Entry:                                                                                     Dr.                             Cr.

                  Equipment                                                                                           7,800

                                    Cash                                                                                                                      7,800

                Transaction 11: Purchase of Supplies on Credit

                Description: Purchases $4,800 of inventory on credit.

                Journal Entry:                                                                                       Dr.                              Cr.

                Inventory                                                                                              4,800

                                     Accounts Payable                                                                                                 4,800

Solutions

Expert Solution

Cash flow from operations = $179,500

Working:

Net Income (54,800 + 4,700) 59500
Depreciation 12000
Decrease in Accounts Receivable 52500
Increase in allowance for doubtful accounts 10500
Decrease in Inventory 40200
Increase in Accounts Payable 4800
Cash flow from operating activities 179500
Cash flow from investing activities
Purchase of equipment -7800
Cash flow from financing activities
Issue of common stock 55000
Payment of dividend -4700
Cash flow from financing activities 50300
Net Cash Flow 222000
ASSETS LIABILITIES STOCKHOLDERS' EQUITY
Transaction Cash + A/R + Inventory + Other assets = All.for + A/P + Notes Payable + Paid in capital + Earned Capital
D.Ac/s
Beg.Balance 500000 + 700000 + 300000 + 800000 = + 300000 + 1000000 + 500000 + 500000
Transaction 1 + -22000 + + = + + + + -22000 Returns from A/R
Transaction 2 24500 + -25000 + + = + + + + -500 Collection from A/R
Transaction 3 155000 + + + = + + + + 155000 Sales
Transaction 4 + + -45000 + = + + + + -45000 Cost of goods
Transaction 5 + + + = 16000 + + + + -16000 Bad Debts
Transaction 6 + -5500 + + = -5500 + + + + A/R   w/off
Transaction 7 + + + -12000 = + + + + -12000 Depreciation
Transaction 8 55000 + + + = + + + 55000 + Issue of common stock
Transaction 9 -4700 + + + = + + + + -4700 Dividends
Transaction 10 -7800 + + + 7800 = + + + + Equipment
Transaction 11 + + 4800 + = + 4800 + + + Purchase of inventory
Ending Balance 722000 + 647500 + 259800 + 795800 = 10500 + 304800 + 1000000 + 555000 + 554800
Transactions 222000 + -52500 + -40200 + -4200 = 10500 + 4800 + 0 + 55000 + 54800

ekkarill92 answered 1 year ago
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