Answered: Curwen Inc. reported net cash flow from… | bartleby

Curwen Inc. reported net cash flow from operating activities of $199,100 on its statement of cash flows for a recent year ended December 31. The following information was reported in the Cash flows from operating activities section of the statement of cash flows, using the indirect method: Decrease in income taxes payable $3,800 Decrease in inventories 9,400 Depreciation 14,500 Gain on sale of investments 6,500 Increase in accounts payable 2,600 Increase in prepaid expenses 1,600 Increase in accounts receivable 7,100 a. Determine the net income reported by Curwen Inc., for the year ended December 31. b. Curwen’s net income differed from cash flows from operations because of the following

Managerial Accounting

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter15: Statement Of Cash Flows

Section: Chapter Questions

Problem 15E

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Determining Net Income from Net Cash Flow from Operating Activities

Curwen Inc. reported net cash flow from operating activities of $199,100 on its statement of cash flows for a recent year ended December 31. The following information was reported in the Cash flows from operating activities section of the statement of cash flows, using the indirect method:

Decrease in income taxes payable	$3,800
Decrease in inventories	9,400
Depreciation	14,500
Gain on sale of investments	6,500
Increase in accounts payable	2,600
Increase in prepaid expenses	1,600
Increase in accounts receivable	7,100

a. Determine the net income reported by Curwen Inc., for the year ended December 31.

b. Curwen’s net income differed from cash flows from operations because of the following:

Depreciation expense, which has no effect on cash flows from operating activities.
Gain on the sale of investments is reported in investing activities section of the cash flow statement.
Changes in current operating assets and liabilities that are added or deducted, depending on their effect on cash flow but not in the income statement.
Operating expenses are deducted from income but are added in the cash flow statement.
Dividends are deducted from the investing activities in cash flow statement but are a charge against income in the income statement.

question B is multiple choice. The options are:

-1,2, and 3

-1,4, and 5

-1,3, and 5

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Statement of Cash Flows The following are Mueller Companys cash flow activities: a. Net income, 68,000 b. Increase in accounts receivable, 4,400 c. Receipt from sale of common stock, 12,300 d. Depreciation expense, 11,300 e. Dividends paid, 24,500 f. Payment for purchase of building, 65,000 g. Bond discount amortization, 2,700 h. Receipt from sale of long-term investments at cost, 10,600 i. Payment for purchase of equipment, 8,000 j. Receipt from sale of preferred stock, 20,000 k. Increase in income taxes payable, 3,500 l. Payment for purchase of land, 9,700 m. Decrease in accounts payable, 2,900 n. Increase in inventories, 10,300 o. Beginning cash balance, 18,000 Required: Prepare Mueller Company's statement of cash flows.
Reporting changes in equipment on statement of cash flows An analysis of the general ledger accounts indicates that delivery equipment, which cost 75,000 and on which accumulated depreciation totaled 58,000 on the date of sale, was sold for 20,200 during the year. Using this information, indicate the items to be reported on the statement of cash flows.
Partial Statement of Cash Flows Service Company had net income during the current year of $65,800. The following information was obtained from Services balance sheet: Accounts receivable $26,540 increase Inventory 32,180 increase Accounts payable 9,300 decrease Interest payable 2,120 increase Accumulated depreciation (Building) 14,590 increase Accumulated depreciation (Equipment) 32,350 increase Additional Information: 1. Equipment with accumulated depreciation of $18,000 was sold during the year. 2. Cash dividends of $29,625 were paid during the year. Required: 1. Prepare the net cash flows from operating activities using the indirect method. 2. CONCEPTUAL CONNECTION How would the cash proceeds from the sale of equipment he reported on the statement of cash flows? 3. CONCEPTUAL CONNECTION How would the cash dividends be reported on the statement of cash flows? 4. CONCEPTUAL CONNECTION What could the difference between net income and cash flow from operating activities signal to financial statement users?

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