a.
Concept Introduction:
The statement of
To identify:the method used by company to compute net cash provided by operating activities.
b.
Concept Introduction:
The statement of cash flows is one of the financial statements. This statement is prepared at the end of a particular period to know the cash flows of the business. The statement is prepared using the direct or indirect method.
To indicatethe reason of adding the decrease in
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Loose Leaf for Financial Accounting: Information for Decisions
- Statement of Cash Flows—Direct Method Lang Company has not yet prepared a formal statement of cash flows for 2016. Following are comparative balance sheets as of December 31, 2016 and 2015, and a statement of income and retained earnings for the year ended December 31, 2016: Required For purposes of a statement of cash flows, are the U.S. Treasury bills cash equivalents? If not, how should they be classified? Explain your answers. Prepare a statement of cash flows for 2016 using the direct method in the Operating Activities section.arrow_forwardThe accounting records of MVD Sales, Inc. include the following accounts: (Click the icon to view the accounts.) Compute MVD's net cash provided by (used for) operating activities during July 2016. Use the indirect method. (Use parentheses or a minus sign for numbers to be subtracted and to show net cash used for operating activities. If a box is not used in the table leave the box empty; do not select a label or enter a zero.) MVD Sales, Inc. Statement of Cash Flows (Partial) For the Month Ended July 2016 Cash Flows from Operating Activities: Net Income Adjustments to Reconcile Net Income to Net Cash Provided by (Used for) Operating Activities: Net Cash Provided by (Used for) Operating Activities Account Cash Accounts Receivable Merchandise Inventory Accounts Payable Beginning Balance $ 5,500 19,000 17,000 13,000 Accumulated Depreciation- Equipment 50,000 Jul. 1 3,000 Depr. Exp. 53,000 Jul. 31 Dividends Ending Balance $ 3,500 15,500 21,000 17,500 Retained Earnings 20,000 65,000 Jul. 1…arrow_forwardPrepare a statement of cash flows (indirect method) for the year 2018. Use the minus sign to indicate cash outflows, a decrease in cash or cash payments.arrow_forward
- Alex Company prepares its statement of cash flows using the direct method for operating activities. For the year ended December 31, 2024, Alex Company reports the following: Sales on account Cash sales Decrease in accounts receivable Increase in accounts payable Increase in inventory Cost of goods sold $2100000 O $1611000 $1755000 O $1395000 O $1539000 1110000 915000 108000 72000 1575000 What amount of cash payments to suppliers will be reported by Alex Company for the year ended December 31, 2024?arrow_forwardWhat is Target’s balance of cash equivalents for the fiscal year ended January 30,2016?arrow_forwardPrepare a statement of cash flows (direct method) for the year 2018. Use the minus sign to indicate cash out flows, a decrease in cash or cash payments.arrow_forward
- Impact of Transactions Involving Receivables on Statement of Cash Flows From the following list, identify whether the change in the account balance during the year would be added to or deducted from net income when the indirect method is used to determine cash flows from operating activities: Transaction Impact on Cash Flow Statement Increase in accounts receivable Decrease in accounts receivable Increase in notes receivable Decrease in notes receivable Added to net income Deducted from net income No impact on net incomearrow_forwardCrane Company prepares its statement of cash flows using the direct method for operating activities. For the year ended December 31, 2021, Crane Company reports the following activity: Sales on account Cash sales Decrease in accounts receivable Increase in accounts payable Increase in inventory Cost of good sold $2000000 $4010000 $2910000 O $2190000 O $3100000 1100000 910000 105000 70000 1570000 What is the amount of cash collections from customers reported by Crane Company for the year ended December 31, 2021?arrow_forwardPresented below is the 2024 income statement and comparative balance sheet information for Tiger Enterprises. Sales revenue Operating expenses: Cost of goods sold TIGER ENTERPRISES Income Statement For the Year Ended December 31, 2024 ($ in thousands) Depreciation expense Insurance expense General and administrative expense Total operating expenses Income before income taxes Income tax expense Net income Balance Sheet Information ($ in thousands) Assets: Cash Accounts receivable Inventory Prepaid insurance Equipment Less: Accumulated depreciation Total assets Liabilities and Shareholders' Equity: Accounts payable Accrued liabilities (for general & administrative expense) Income taxes payable Notes payable (due 12/31/2025) Common stock Retained earnings Total liabilities and shareholders' equity $ 3,390 270 130 1,830 December 31, 2024 $ 330 780 670 65 2,250 (900) $ 3,195 $ 330 330 230 830 930 545 $ 3,195 $ 7,180 5,620 1,560 (630) $ 930 December 31, 2023 $ 230 860 630 35 1,950 (630) $…arrow_forward
- During 2014, Search Company which uses the allowance method of accounting for doubtful accounts, recorded a provision for doubtful accounts expense of P30,000 and in addition, it wrote off as uncollectible accounts receivable of P12,000. As a result of these transactions, net cash flow from operating activities would be calculated (indirect method) by adjusting net income with a (an) a. P30,000 increase b. P18,000 decrease c. P12,000 increase d. P18,000 increasearrow_forwardClark Bell started a personal financial planning business when he accepted $69,000 cash as advance payment for managing the financial assets of a large estate. Bell agreed to manage the estate for a one-year period beginning June 1, Year 1. Required Show the effects of the advance payment and revenue recognition on the Year 1 financial statements using the following horizontal statements model. In the Cash Flows column, use OA to designate operating activity, IA for investing activity, FA for financing activity, and NC for net change in cash. If the account is not affected, leave the cell blank. How much revenue would Bell recognize on the Year 2 income statement? What is the amount of cash flow from operating activities in Year 2?arrow_forward1. How much cash is received from sales to customers for year 2021? Assume all the sales were made on credit basis . 2. What is the net increase or decrease in the Cash account for year 2021?arrow_forward
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