1:14ktacesRequireda. Determine the amount of cash flow for each item and indicate whether the item should appear in the operating, investing, orfinancing activities section of a statement of cash flows. Assume Gibson Company uses the direct method for showing net cash flowfrom operating activities.b. Prepare a statement of cash flows using the direct method.Complete this question by entering your answers in the tabs below.Required A Required BDetermine the amount of cash flow for each item and indicate whether the item should appear in the operating, investing,or financing activities section of a statement of cash flows. Assume Gibson Company uses the direct method for showingnet cash flow from operating activities.Note: Any cash outflow should be indicated by a minus sign. Select "No effect" if there is no effect. If there is both aninflow and an outflow of cash for the same item, enter the net difference in the Amount column.1.2.3.4.5.6.7.8.9.10.11.12.13Transactionsin Accounts Receivable accountin Salaries Payable accountin Other Operating Expenses Payablein Depreciation Expensein Equipment accountin Notes Payable accountin Interest Payable accountin Accounts Payablein Notes Receivablein Common Stock accountin Land accountin Taxes Payable accountin Investments account.< Required A000, resulting in a $7,100 gain.AmountStatement of cash flowsRequired B >Show less A Gibson Company engaged in the following transactions for Year 1. The beginning cash balance was $28,100 and the ending cashbalance was $74,991.1. Sales on account were $283,100. The beginning receivables balance was $94,700 and the ending balance was $77,000.2. Salaries expense for the period was $55,460. The beginning salaries payable balance was $3,815 and the ending balance was$2,180.3. Other operating expenses for the period were $120,170. The beginning other operating expenses payable balance was $4,860 andthe ending balance was $9,181.4. Recorded $19,330 of depreciation expense. The beginning and ending balances in the Accumulated Depreciation account were$14,340 and $33,670, respectively.5. The Equipment account had beginning and ending balances of $211,970 and $238,570, respectively. There were no sales ofequipment during the period.6. The beginning and ending balances in the Notes Payable account were $48,500 and $150,500, respectively. There were nopayoffs of notes during the period.7. There was $5,737 of interest expense reported on the income statement. The beginning and ending balances in the InterestPayable account were $1,680 and $1,120, respectively.8. The beginning and ending Merchandise Inventory account balances were $94,130 and $112,956, respectively. The company soldmerchandise with a cost of $151,359 (cost of goods sold for the period was $151,359). The beginning and ending balances in theAccounts Payable account were $9,610 and $11,628, respectively.9. The beginning and ending balances in the Notes Receivable account were $5,100 and $10,500, respectively. Notes receivableresult from long-term loans made to employees. There were no collections from employees during the period.10. The beginning and ending balances in the Common Stock account were $97,000 and $113,000, respectively. The increase wascaused by the issue of common stock for cash.11. Land had beginning and ending balances of $47,900 and $36,120, respectively. Land that cost $11,780 was sold for $8,690,resulting in a loss of $3,090.12. The tax expense for the period was $8,210. The Taxes Payable account had a $1,020 beginning balance and a $939 endingbalance.13. The Investments account had beginning and ending balances of $29,100 and $33,500, respectively. The company purchasedinvestments for $17,900 cash during the period, and investments that cost $13,500 were sold for $25,000, resulting in a $7,100 gain.Requireda. Determine the amount of cash flow for each item and indicate whether the item should appear in the operating, investing, orfinancing activities section of a statement of cash flows. Assume Gibson Company uses the direct method for showing net cash flowfrom operating activities.b. Prepare a statement of cash flows using the direct method.Complete this question by entering your answers in the tabs below.Required ARequired BDetermine the amount of cash flow for each item and indicate whether the item should appear in the operating, investing,or financing activities section of a statement of cash flows. Assume Gibson Company uses the direct method for showingnet cash flow from operating activities.Note: Any cash outflow should be indicated by a minus sign. Select "No effect" if there is no effect. If there is both aninflow and an outflow of cash for the same item, enter the net difference in the Amount column.Show less A

Statement of Cash Flows presents the changes in cash & cash equivalents during the period. Generally Cash flow statement consists of three activities:Cash flow from operating activitiesCash flow from investing activitiesCash flow from financing activitiesWorking Notes:Inventory Purchased during the year:Cost of goods sold + Closing Inventory - Opening Inventory = 1,51,359 + 1,12,956 - 94,130 = 1,70,185 Statement of cash flows (Direct method) (Amounts In USD)Net cash flows from operating activitiesCash receipt from customers (2,83,100+94,700-77,000)3,00,800Less: Operating expenses paid Salaries Expenses (55,460+3,815-2,180) (-)57,095Other Operating expenses (120170+4860-9181) (-)1,15,849Notes Payable Account (48,500 - 1,50,500) 1,02,000Accounts Payable (9,610 + 1,70,185 - 11,628) (-)1,68,167Less: Income taxes paid (8,210 + 1,020 - 939)(-)8291 53,398Net cash flows from investing activitiesPurchase of Equipment (2,38,570 - 2,11,970)(-)26,600Sale of Land 8,690Purchase of Investments (-)17,900Sale of Investments 25,000 (-)10,810Net cash flows from financing activitiesInterest Expense (5,737 + 1,680 - 1,120) (-)6,297Notes Receivable (5,100 - 10500) (-)5,400Issue of common stock (1,13,000 - 97,000)16,0004,303Net Increase or (Decrease) in Cash Balance46,891Add: Beginning Cash Balance28,100Ending Cash Balance74,991Analysing the items provided in the table above. (Part 1 of the question)S.NoParticularsAmount (In USD)Statement of cash Flows1Accounts Receivable Account3,00,800Operating activities2Salaries Payable Account(-)57,095Operating activities3Other Operating Expenses Payable(-)1,15,849Operating activities4Depreciation ExpenseNo EffectOperating activities5Equipment Account(-)26,600Investing activities6Notes Payable1,02,000Operating activities7Interest Payable(-)6,297Financing activities8Accounts Payable(-)1,68,167Operating activities9Notes Receivables(-)5,400Financing activities10Common Stock16,000Financing activities11Land Account8,690Investing activities12Taxes Payables(-)8291Operating activities13Investment Account7,100Investing activities

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Accounting

Determine the amount of cash flow for each item and indicate whether the item should appear in the operating, investing, or financing activities section of a statement of cash flows. Assume Gibson Company uses the direct method for showing net cash flow from operating activities. Prepare a statement of cash flows using the direct method.

Determine the amount of cash flow for each item and indicate whether the item should appear in the operating, investing, or financing activities section of a statement of cash flows. Assume Gibson Company uses the direct method for showing net cash flow from operating activities. Prepare a statement of cash flows using the direct method.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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