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 2, Problem 2.8P
Statement of
Colorado Corporation was organized at the beginning of the year, with the investment of $250,000 in cash by its stockholders. The company immediately purchased an office building for $300,000, paying $210,000 in cash and signing a three-year promissory note for the balance. Colorado signed a five-year, $60,000 promissory note at a local bank during the year and received cash in the same amount. During its first year, Colorado collected $93,970 from its customers. It paid $65,600 for inventory, $20,400 in salaries and wages, and another $3,100 in taxes. Colorado paid $5,600 in cash dividends.
Required
- Prepare a statement of cash flows for the year.
- What does this statement tell you that an income statement does not?
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Students have asked these similar questions
A corporation had $24,000 of cash at the beginning of the year. During the
year, it had sales on account of $21,000 and cash receipts of $25,000 during
the year. At the end of the year, it had $33,000 of cash. What was the
corporation's cash disbursements for the year?
O $24,000
O $12,000
O $28,000
O $18,000
O $16,000
A company purchases equipment for $32,000 cash. This transaction should be shown on the statement of cash flows under
a.financing activities.
b.operating activities.
c.noncash investing and financing activities.
d.investing activities.
On the first day of the fiscal year, a company issues a $980,000, 8%, 5-year bond that pays semiannual interest of $39,200 ($980,000 × 8% × 1/2), receiving cash of $884,177.
Required:
Journalize the entry to record the issuance of the bonds. Refer to the Chart of Accounts for exact wording of account titles.
CHART OF ACCOUNTS
General Ledger
ASSETS
110
Cash
111
Petty Cash
112
Accounts Receivable
113
Allowance for Doubtful Accounts
114
Notes Receivable
115
Interest Receivable
121
Merchandise Inventory
122
Supplies
131
Prepaid Insurance
140
Land
151
Building
152
Accumulated Depreciation-Building
153
Equipment
154
Accumulated Depreciation-Equipment
LIABILITIES
210…
Riley Company borrowed $40,000 on April 1, Year 1 from the Titan Bank. The note issued by Riley
carried a one year term and a 7% annual interest rate. Riley earned cash revenue of $1,060 in Year 1
and $1,500 in Year 2 Assume no other transactions.
The amount of cash flow from operating activities that would appear on the Year 2 statement of
cash flows would be:
Multiple Choice
.
.
$800 inflow
$1,300 outflow
$40,800 outflow
$1,500 inflow
Chapter 2 Solutions
Financial Accounting: The Impact on Decision Makers
Ch. 2 - Read each definition below and write the number of...Ch. 2 - Prob. 2.1ECh. 2 - The Operating Cycle Two Wheeler Cycle Shop buys...Ch. 2 - Classification of Financial Statement Items Regal...Ch. 2 - Current Ratio Baldwin Corp. reported the following...Ch. 2 - Classification of Assets and Liabilities Indicate...Ch. 2 - Selling Expenses and General and Administrative...Ch. 2 - Prob. 2.7ECh. 2 - Income Statement Ratio The income statement of...Ch. 2 - Statement of Retained Earnings Landon Corporation...
Ch. 2 - Components of the Statement of Cash Flows Identify...Ch. 2 - Prob. 2.11ECh. 2 - Prob. 2.12MCECh. 2 - Prob. 2.13MCECh. 2 - Prob. 2.14MCECh. 2 - Materiality Joseph Knapp, a newly hired accountant...Ch. 2 - Costs and Expenses The following costs are...Ch. 2 - Prob. 2.3PCh. 2 - Prob. 2.4PCh. 2 - Working Capital and Current Ratio The balance...Ch. 2 - Single-Step Income Statement The following income...Ch. 2 - Multiple-Step Income Statement and Profit Margin...Ch. 2 - Statement of Cash Flows Colorado Corporation was...Ch. 2 - Basic Elements of Financial Reports Comparative...Ch. 2 - Prob. 2.10MCPCh. 2 - Prob. 2.11MCPCh. 2 - Prob. 2.12MCPCh. 2 - Prob. 2.1APCh. 2 - Prob. 2.2APCh. 2 - Prob. 2.3APCh. 2 - Prob. 2.4APCh. 2 - Working Capital and Current Ratio The balance...Ch. 2 - Single-Step Income Statement The following income...Ch. 2 - Prob. 2.7APCh. 2 - Prob. 2.8APCh. 2 - Prob. 2.9APCh. 2 - Comparability and Consistency in Income Statements...Ch. 2 - Prob. 2.12AMCPCh. 2 - Prob. 2.1DCCh. 2 - Prob. 2.2DCCh. 2 - Analysis of Cash Flow for a Small Business...Ch. 2 - Prob. 2.4DCCh. 2 - The Expenditure Approval Process Roberto is the...Ch. 2 - Prob. 2.6DC
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