[The following information applies to the questions displayed below.]Lansing Company's current-year income statement and selected balance sheet data at December 31 of the current andprior years follow.LANSING COMPANYIncome StatementFor Current Year Ended December 31Sales revenueExpensesCost of goods soldDepreciation expenseSalaries expenseRent expenseInsurance expenseInterest expenseUtilities expenseNet incomeAt December 31Accounts receivableInventoryAccounts payable$ 97,200Salaries payableUtilities payablePrepaid insurancePrepaid rent42,00012,00018,000LANSING COMPANYSelected Balance Sheet AccountsCurrent Year$ 5,6001,9804,4008802202602209,0003,8003,6002,800$ 6,000Prior Year$ 5,8001,5404,600700160280180 Required:Prepare the operating activities section of the statement of cash flows using the indirect method for the current year. (Amounts to bededucted should be indicated with a minus sign.)LANSING COMPANYCash Flows from Operating Activities-Indirect MethodFor Current Year Ended December 31Cash flows from operating activities:Adjustments to reconcile net income to net cash provided by operations:Income statement items not affecting cashChanges in current assets and current liabilities

Cashflow statements are prepared to know the changes that happen in the cash balance over a period…

Answered: Required: Prepare the operating…

Required: Prepare the operating activities section of the statement of cash flows using the indirect method for the current year. (Amounts to be deducted should be indicated with a minus sign.)

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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Help with part "a" please!
IT MUST BE ACCURATE AND COMPLETE EXPLANATION Discuss the computation of Operating Cash Flow using the indirect method. Explain why do we add or deduct items or transactions.
An example of an item that is deducted from net income when preparing the operating activities section of the statement of cash using the indirect method is:
Hamburger Heaven's income statement for the current year and selected balance sheet data for the current and prior years ended December 31 are presented below. Income Statement Sales Revenue $1,860 Expenses: Cost of Goods Sold 850 Depreciation Expense Salaries and Wages Expense Rent Expense 150 450 200 Insurance Expense 75 Interest Expense Utilities Expense 45 Net Income 35 Selected Balance Sheet Accounts Current Year Prior Year 72 Inventory Accounts Receivable 55 355 400 Accounts Payable Salaries/Wages Payable Utilities Payable Prepaid Rent Prepaid Insurance 225 260 39 25 25 10 14 TIP: Prepaid Rent decreased because the amount taken out of Prepaid Rent (and subtracted from net income as Rent Expense) was more than the amount paid for rent in cash during the current year. Required: Prepare the cash flows from operating activities section of the statement of cash flows using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)
Using the Exhibit below, assume that the balance of Accounts Payable was $60,000 at the beginning of the current year. Furthermore, assume that the balance of Accounts Payable is $65,000 at the end of the current year. When preparing the Statement of Cash Flow using the indirect method for the current year, which of the following statements would describe the proper presentation of accounts payable on the Cash flow from operating activities section? EXHIBIT Increase (Decrease) Net Income (loss) $XXX Adjustments to reconcile net income to net cash flow from operating activities: Depreciation of fixed assets XXX Losses on disposal of assets XXX Gains on disposal of…
Determining Cash Flows from (Used for) Operating Activities Yeoman Inc. reported the following data: Net income Depreciation expense Loss on disposal of equipment Increase in accounts receivable Increase in accounts payable $417,000 55,500 20,900 24,400 10,100 Prepare the Cash Flows from (used for) Operating Activities section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments. Yeoman Inc. Statement of Cash Flows (partial)