FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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- Can you give some explanation of why Amortization Expense is included as a source of cash in a cash flow statement?arrow_forwardThe sum of the cash generated or used by each section of the statement of the cash flows should be equal the difference between the beginning and ending balance of the cash and cash equivalent accounts. True or false?arrow_forwardWhen using the indirect method of determining net cash flows from operating activities, how are revenues and expenses reported on the statement of cash flows if their cash effects are identical to the amounts reported in the income statement?arrow_forward
- When preparing a statement of cash flows, cash equivalents are subtracted from cash in order to calculate the net change in cash during a period. True Falsearrow_forwardHelp with part "a" please!arrow_forwardHamburger 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.)arrow_forward
- 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…arrow_forwardabels and Amount Descriptions Instructions Labels Dec. 31, Dec. 31, December 31, 20Y3 20Y3 20Y2 For the Year Ended December 31, 20Y3 Amount Descriptions Assets 3 Cash $625,680.00 $586,230.00 Cash received from sale of investments 228,100.00 208,850.00 4 Accounts receivable (net) 5 Inventories Cash paid for purchase of land Cash paid for purchase of equipment Cash received from issuing common 640,910.00 617,650.00 0.00 240,620.00 6 Investments 7 Land 328,090.00 0,00 stock 704,540.00 553,320.00 8 Equipment 9 Accumulated depreciation-equipment Cash dividends (166,310.00) (147840.00) Decrease in accounts payable Decreașe in accounts receivable Decrease in accrued expenses payable 10 Total assets $2,361,010.00 $2,058,830.00 11 Liabilities and Stockholders' Equity $425,280.00 $404,550.00 52,020.00 12 Accounts payable Decrease in inventories 41,990.00 13 Accrued expenses payable Depreciation 24,190.00 20,170.00 14 Dividends payablie Gain on sale of investments 15 Common stock, $4 par…arrow_forward
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