Problem 11-8A (Algo) Prepare an income statement using operating cash flow information-indirect anddirect methods (LO11-3, 11-7)Cash flows from operating activities for both the indirect and direct methods are presented for Reverse Logic. Allamounts are in thousands (000s).Cash Flows from Operating Activities (Indirect method)Net incomeAdjustments to reconcile net income to net cash flows from operatingactivities:Depreciation expenseIncrease in accounts receivableDecrease in inventoryIncrease in prepaid rentDecrease in accounts payableDecrease in income tax payableNet cash flows from operating activitiesCash Flows from Operating Activities (Direct method)Cash received from customersCash paid to suppliersCash paid for operating expensesCash paid for income taxesNet cash flows from operating activitiesREVERSE LOGICIncome StatementFor the Year Ended December 31, 2024Net salesExpenses:Cost of goods soldOperating expensesDepreciationexpenseIncome tax expenseTotal expensesNet incomeRequired:Complete the following income statement for Reverse Logic. Assume all accounts payable are to suppliers. (Enter youranswers in thousands (i.e., 10,000,000 should be entered as "10,000).)57$$16916957(33)45(3)(21)(7)$4,045(2,590)(1,156)(92)$207$207

1. Cash Flow Statement reflects the Cash Inflows and Outflows during a period of time. 2. Effects of…

nts are in thousands (000s). h Flows from Operating Activities (Indirect method) -t income justments to reconcile net income to net cash flows from tivities: preciation expense crease in accounts receivable crease in inventory crease in prepaid rent crease in accounts payable crease in income tax payable let cash flows from operating activities

nts are in thousands (000s). h Flows from Operating Activities (Indirect method) -t income justments to reconcile net income to net cash flows from tivities: preciation expense crease in accounts receivable crease in inventory crease in prepaid rent crease in accounts payable crease in income tax payable let cash flows from operating activities

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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D. MATCHING In the following statement of cash flows, each letter represents a specific item which may appear on the statement, using the indirect method. Match the appropriate letter(s) with each transaction listed below. More than one letter may be used for each transaction. 1) 2) 3) 4) 5) 6) 7) 8) 9) Statement of Cash Flows Cash Flows from Operating Activities: Net Income Adjustments to Net Income: Add Deduct Cash Flows from Investing Activities Add Deduct Cash Flows from Financing Activities Add Deduct Significant Non-Cash Transactions Not on the Statement of Cash Flows (A) (B) (D) 30 000€ (H) Sold a short-term, available-for-sale investment at a gain. Temporarily borrowed money by signing a short-term, promissory trade notes payable. Treasury stock was purchased with cash. Declared cash dividends (but did not pay them yet). Purchased land by giving shares of common stock held in treasury. Amortized the premium on bonds payable. Paid off bonds payable before maturity and incurred a…
What matches with letter A?
Provide iand Create nformation needed to create a Statement of Cash Flows using the Indirect Method. You MUST include: Net Income At least 3 items that go under operating activities. At least 2 items that go under investing activities. At least 2 items that go under financing activities. And 1 non-cash transaction.
A B C D E xercise 2 Prepare a cash flow statement given the following information. Sales COGS Gross Profit Operating Exp. Rent Exp. Wage Exp. Depreciation Exp. Total Oper. Exp. Operating Income Gain on Sale Equip. Net Income 5 5 7 8 9 0 31 32 33 34 35 36 37 38 39 40 41 Your Co. Statement of Cash Flows Year Ending 20x9 Cash from Operations Jx Net Cash from Operations Cash from Investing Net Cash from Investing Cash from Financing Net Cash from Financing 80 320 40 800 160 640 440 200 120 320 X X X X X X X X X X X X X X X X X X F A/P decrease A/R increase Beg. cash balance. Bonds issued Dividends paid End. cash balance Inventory decrease Machine purchased Proceeds - sale of equipment Stock issued Wages payable increase G 40 80 96 800 16 440 120 1,600 320 400 200
Match each of the following term with the corresponding description. Not all descriptions will be used._____ Operating activities_____ Indirect method_____ Cash equivalent_____ Investing activities_____ Direct method_____ Financing activitiesA. Measures the percent of net income that comes from high-margin products.B. Includes such events as the receipt of dividends and interest on investment assets.C. Includes assets that are very liquid and have original maturities of three months or less.D. The percent of total debt represented by a company's cash account.E. These activities include only purchases made with borrowed funds.F. Where cash flows from operating activities are calculated by converting each revenue and expense item from an accrual to a cash basis.G. This ratio multiplies net income by the average rate of interest the company receives on its investments.H. This ratio uses net income instead of operating cash flow to Analysis a company's ability to finance the cost of its…
Suppose your company sells services of $180 in exchange for $110 cash and $70 on account. Required: 1. Prepare the journal entry to record this transaction. 2. Identify the amount that should be reported as net cash flow from operating activities. 3. Identify the amount that would be included in net income. 4. Show how the indirect method would convert net income (requirement 3) to net cash flow from operating activities (requirement 2).
This is an accounting question about reconciling direct-method cash flow from operations to net income. I have read that generally for a simple noninventory situation the approach would be something like: Net Income Plus depreciation Minus Change in Current Assets Plus Change in Current Liabilities --> Should equal cash flows from operations in the cash flow statement. My question is about purchasing a long-term asset on account. A journal entry is made: credit accounts payable/debit long-term asset. If I generate a cash flow statement, the increase in current liabilities caused by that entry will be a part of the equation above. But that amount is not an operating cash flow, it is an investing cash flow. So my reconciliation to operating activities will be off by that amount. It seems like there's a missing adjustment in the equation, like "Minus assets purchased on account" or something like that. Example: Say my company just started and so far only has $5K contibuted cash in the…
d. Compute its (1) operating cash flow to current liabilities ratio, (2) operating cash flow to capital expenditures ratio, and (3) free cash flow.Round your answers to (1) and (2) to two decimal places. (1) Operating cash flow to current liabilities ratio (2) Operating cash flow to capital expenditures ratio (3) Free cash flow
Use the following data to construct a statement of cash flows using the direct method. Balances 20X19 20X18 Statement of Financial Position Cash Accounts receivables Prepaid insurance Inventory Fixed asset Accumulated depreciation Total assets Accounts payable Wages payable Note payable Capital Retained earnings Total liability and equity Statement of P/L and other comprehensive income Sales Cost of sales Depreciation expense Insurance expense Wage expense Net income 4,000 25,000 5,000 37,000 316,000 (45,000) 342,000 18,000 4,000 173,000 88,000 59,000 342,000 200,000 (123,000) (15,000) (11,000) (50,000) 1,000 14,000 32,500 7,000 34,000 270,000 (30,000) 327,500 16,000 7,000 160,000 84,000 60,500 327,500 Additional information Dividends declared and paid in 20X19 for R2,500 R46,000 was paid for new fixed assets in 20X19 Accounts payable was used only for inventory No debt was retired during 20X19
RECONCILIATION OF NET INCOME TO NET CASH FLOWS FROM OPERATING ACTIVITIES Cash flows from operating activities: Adjustments for noncash effects: Changes in operating assets and liabilities: Net cash flows from operating activities
BGP Electrical Supply is developing its annual financial statements at December 31, current year. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statement are summarized: Current Year Prior Year Balance sheet at December 31 $ 39,900 36,800 44,000 $ 31,900 31,800 41,000 103,300 (27,300) Cash Accounts receivable Merchandise inventory 126,100 (34,700 $212,100 $ 40,700 Property and equipment Less: Accumulated depreciation Accounts payable Accrued wages expense Note payable, long-term Common stock and additional paid-in capital Retained earnings $180,700 $ 32,100 4,100 55,100 74,900 14,500 3,700 48,000 94,900 24,800 $212,100 $180,700 Income statement for current year $139,000 89,000 Sales Cost of goods sold Other expenses Net income 39,700 $ 10,300 Additional Data: a. Bought equipment for cash, $22,800. b. Paid $7,100 on the long-term note payable. c. Issued new shares of stock for $20,000 cash. d. No dividends were…
Use the following income statement and information about selected current assets and current liabilities to calculate the net cash provided or used by operating activities under the indirect method. Income Statement For Year Ended December 31, Year 2 Sales Cost of goods sold Gross profit Operating expenses Wages expense Depreciation expense Rent expense Interest expense Loss on sale of land Net income $ 26,500 8,500 8,700 3,400 Accounts receivable Inventory Prepaid rent Accounts payable Wages payable Interest payable Selected beginning and ending balances of current asset and current liability accounts, all of which relate to operating activities, follow. $ 225,000 111,500 $ 113,500 $ 30,600 25,300 850 47,100 $ 66,400 5,000 $ 61,400 Balance December 31, December 31, Year 2 Year 1 $ 25,500 21,500 550 27,500 10,500 400 30,100 13,400 600