Question

In: Accounting

Use the following information to answer the next Two questions : 2018 2017 Cash 15,000 14,000...

Use the following information to answer the next Two questions :

2018 2017
Cash 15,000 14,000
A/R 24,000 25,000
Inventory 79,000 78,000
Prepaid Insurance 5,000 4,000
Preoperty plant, & Equipment 35,000 30,000
Accumlated Depreciation (7,000) (5,000)
Total Assets 151,000 146,000
Account Payable 6,000 9,000
Bonds Payable (mature in yr 2022 45,000 60,000
Common Stock 70,000 60,000
Retaind Earnings 30,000 17,000
Total Liabilities & Equity 151,000 146,000


Sunny Company had the following comparative balance sheet information for 2018, 2017:
Sunny reported net income for 2018, of $18,000 Depreciation expense in 2018 was $2,000. Not long-term assets were sold during the year.

refer to the innformation above: Under method calculate Sunny's positive or negative Cash flow statement from changes in Accountss payable for 2018.
a. $200
b. $-2000
c. $3000
d. $-3000

Refer to the information above, Under the indirect method , caluclate Sunny positive or negative Cash Flow statement changes Inventory for 2018:
a. $1000
b. $-1000
c. $-2000
d. $2000

Which of the following true regarding the statement of cash flows?
a. The statement summarizes cash flows for a period of time.
b. THe statement explains the changes in the cash flows for a period of time.
c. Both a,b true.
d. Bothe are wrong.

Which of the following would be reported as financing activity on the statement of cash flows?
a. Changes in Long-term liabilites.
b. Changes in Current liabilites.
b. Net income
d. changes in (Gross) Long-term Assets.

Solutions

Expert Solution

Under method calculate Sunny's positive or negative Cash flow statement from changes in Accountss payable for 2018.
Decraese in Accountss payable = Decrease in cashflow = (6000-9000)         (3,000)
Correct option is D.
Under the indirect method , caluclate Sunny positive or negative Cash Flow statement changes Inventory for 2018.
Increase in Inventory = Decrease in cashflow = (78000-79000)         (1,000)
Correct option is B.
Which of the following true regarding the statement of cash flows?
The statement summarizes cash flows for a period of time and also explains the changes in the cash flows for a period of time.
Correct option is C.
Which of the following would be reported as financing activity on the statement of cash flows?
Changes in Long-term liabilites would be reported as financing activity on the statement of cash flows. Changes in Current liabilites would be reported as Operating activity on the statement of cash flows. Changes in (Gross) Long-term Assets would be reported as Investing activity on the statement of cash flows.
Correct option is A.

ekkarill92 answered 1 year ago
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