Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN: 9781305654174
Author: Gary A. Porter, Curtis L. Norton
Publisher: Cengage Learning
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Textbook Question
Chapter 12, Problem 12.13MCP
Statement of
Lang Company has not yet prepared a formal statement of cash flows for 2016. Following are comparative balance sheets as of December 31, 2016 and 2015, and a statement of income and
Required
- For purposes of a statement of cash flows, are the U.S. Treasury bills cash equivalents? If not, how should they be classified? Explain your answers.
- Prepare a statement of cash flows for 2016 using the direct method in the Operating Activities section.
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Classifying Items in the Statement of Cash Flows
The following items are commonly reported in a statement of cash flows (indirect method presentation). For each item 1 through 20, determine (a) in which section the item is presented (operating, investing, or financing) and (b) whether the associated dollar amount is added or subtracted in the statement.
(a)
(b)
1. Payments of short-term debt.
AnswerOperatingInvestingFinancing
AnswerAddSubtract
2. Repurchases of common stock.
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AnswerAddSubtract
3. Purchases of property and equipment.
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4. Sale of investments classified as long-term.
AnswerOperatingInvestingFinancing
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5. Proceeds from the issuance of common stock.
AnswerOperatingInvestingFinancing
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6. Increase in prepaid expenses and other current assets.
AnswerOperatingInvestingFinancing
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7. Acquisition for cash of a competitor.…
Using the attached Comparative Balance sheet and Income statement:
Reconstruct the company’s comparative balance sheet for 2020/2021, compute and show the missing figures to include the appropriate sign as a positive or negative figure.
Prepare a complete statement of cash flows for 2021 using the indirect method.
Chapter 12 Solutions
Financial Accounting: The Impact on Decision Makers
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- 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_forwardQUESTION REQUIRED Use the information provided below to prepare the Cash Flow Statement of Jonah Ltd for the year ended 31 December 2022. (Some of the figures have already been entered in the answer book.) INFORMATION The Statement of Comprehensive Income of Jonah Ltd for the year ended 31 December 2022 and Statement of Financial Position as at 31 December 2021 and 2022 are as follows: STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2022 Sales Cost of sales Gross profit Other operating income Gross income Distribution expenses Administrative expenses Earnings before interest and tax Interest income Interest expense Esmings before tax Company tax Earnings after interest and tax STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER: ASSETS Non-current assets Land and buildings Plant and machinery Current assets Inventories Accounts receivable Total assets EQUITY AND LIABILITIES Equity Ordinary share capital Retained earnings Non-current liabilities Long-term borrowings…arrow_forwardUse the following excerpts from Stern Companys financial information to prepare a statement of cash flows (indirect method) for the year 2018.arrow_forward
- Use the following information from Grenada Companys financial statements to prepare the operating activities section of the statement of cash flows (indirect method) for the year 2018.arrow_forwardUse the following excerpts from Wickham Companys financial information to prepare a statement of cash flows (indirect method) for the year 2018.arrow_forwardUse the following excerpts from Yardley Companys financial information to prepare a statement of cash flows (indirect method) for the year 2018.arrow_forward
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