Introduction:
Operating expense is the expense the business causes in selling merchandise or giving administration and dealing with the organization. These are generally isolated into selling and regulatory expense and incorporates a thing, for example, promoting expense, pay rates, and wages, protection expense, utility expense, property charge expense, and devaluation. These are perceived when products and administration are utilized, not when money is paid. In this manner, the expense sums provided details regarding the announcement will most likely not equivalent the measure of money really paid amid the present time frame.
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Compute the amount of cash payment for operating expense using the direct method.
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Cornerstones of Financial Accounting
- Determining Cash Flows from Financing Activities Solomon Construction Company reported the following amount on its balance sheet at the end of 2019 and 2018 for notes payable: Required: 1. If Solomon did not repay any notes payable during 2019, determine how much cash Solomon received from the issuance of notes payable. 2. If Solomon repaid $40,000 of notes payable during 2019, determine what amounts Solomon would report in the financing activities section of the statement of cash flows.arrow_forwardCash Receipts from Customers Singleton Inc. had accounts receivable of $22,150 at January 1, 2019, and $26,850 at December 31, 2019. Net income for 2019 was $125,300 and sales revenue was $1,240,000. Required: Compute the amount of cash collected from customers using the direct method.arrow_forwardInterest and Income Taxes Staggs Company has prepared its 2019 statement of cash flows. In conjunction with this statement, it plans to disclose the interest and income taxes it paid during 2019. The following information is available from its 2019 income statement and beginning and ending balance sheet: Required: 1. Compute the amounts of interest paid and income taxes paid by Staggs for 2019. 2. Next Level Under IFRS, how would interest paid and income taxes paid be reported?arrow_forward
- Preparing a Statement of Cash Flows Volusia Company reported the following comparative balance sheets for 2019: Required: Prepare a statement of cash flows for Volusia using the indirect method to compute net cash flow from operating activities.arrow_forwardDetermining Cash Flows from Investing Activities Burns Companys 2019 and 2018 balance sheets presented the following data for equipment: During 2019, equipment costing $41,000 with accumulated depreciation of $36,700 was sold for cash, producing a $3,200 gain. Required: 1. Calculate the amount of depreciation expense for 2019. 2. Calculate the amount of cash spent for equipment during 2019. 3. Calculate the amount that should be included as a cash inflow from the disposal of equipment.arrow_forwardSelected information from Brook Corporations accounting records and financial statements for 2019 follows: On the statement of cash flows for the year ended December 31, 2019, Brook should disclose a net increase in cash in the amount of: a. 1,700,000 b. 2,400,000 c. 3,700,000 d. 4,200,000arrow_forward
- Mahoney Company has the following financial statements for 2017 and 2018. Assume that the purchase of equipment and the withdrawals were in the form of cash. Required Prepare a statement of cash flows for the year ended December 31, 2018. Check Figure Net cash flows from operating activities, 76,800arrow_forwardThe following information is available for Bernard Corporation for 2019: Net income $185,200 Decrease in accounts receivable 8,300 Increase in inventory 19,900 Decrease in prepaid rent 4,410 Increase in salaries payable 7,100 Decrease in income taxes payable 3,870 Increase in notes payable (due 2023) 50,000 Depreciation expense 52,700 Loss on disposal of equipment 6,450 Required: Compute the net cash flows from operating activities using the indirect method.arrow_forwardReporting Net Cash Flow from Operating Activities The following information is available for Bernard Corporation for 2019: Net income $199,000 Decrease in accounts receivable 6,400 Increase in inventory 18,300 Decrease in prepaid rent 2,100 Increase in salaries payable 4,410 Decrease in income taxes payable 4,270 Increase in notes payable (due 2023) 50,000 Depreciation expense 44,700 Loss on disposal of equipment 11,000 Required: Compute the net cash flows from operating activities using the indirect method.arrow_forward
- Using the financial statements and notes provided below, prepare a cash flow analysis for the Penelope Company for 2019. Penelope Company Income Statement For the Year Ended December 31, 2019 $2,467,000 1,285,000 1,182,000 Revenues Cost of Goods Sold Gross Margin Operating Expenses: Selling Expenses Administrative Expenses Depreciation Total Operating Expenses Operating Income 230,000 94,000 15,000 339,000 843,000 Other Items: Loss on Sale of Patent (11,000) (42,000) (53,000) 790,000 316,000 $474,000 Interest Expense Other Items Net Income Before Taxes Тахes Net Income After Taxes A review of the notes to the financial statements revealed the following information: 1. Dividends of $210,000 were declared and paid during the year. 2. Selling Expenses include charges of $10,000 for the amortization of trademarks. 3. During 2019 the company sold the only patent that had been reflected on its balance sheet at the beginning of the year. Hint: Consider the beginning balance in the Patent…arrow_forwardKaila Company's financial statements show a net income of $567,000 in 2019. The following items also appear on Kaila's balance sheet: Depreciation expense $120,000 Accounts receivable decrease 36,000 Inventory increase 84,000 Accounts payable increase 24,000 Using the indirect method, what is Tu's net cash flow from operating activities in 2019?arrow_forwardPresented below is selected information pertaining to the Cone Company:§ Cash balance, January 1, 2021- P13,000§ Accounts receivable, January 1, 2021- P19,000§ Collections from customers in 2021- P210,000§ Capital account balance, January 1, 2021- P38,000§ Total assets, January 1, 2021- P75,000§ Cash investment added, July 1, 2021-P5,000§ Total asset, December 31, 2021- P101,000§ Cash balance, December 31, 2021- P20,000§ Accounts receivable, December 31, 2021- P36,000§ Merchandise taken for personal use during 2021- P11,000§ Total liabilities, December 31, 2021- P41,000How much is the net income for 2021? A. 28,000 B. 26,000 C. 30,000 D. 22,000arrow_forward
- Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage LearningIntermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage LearningCollege Accounting (Book Only): A Career ApproachAccountingISBN:9781337280570Author:Scott, Cathy J.Publisher:South-Western College Pub