Loose Leaf for Financial Accounting: Information for Decisions
Loose Leaf for Financial Accounting: Information for Decisions
9th Edition
ISBN: 9781260158762
Author: John J Wild
Publisher: McGraw-Hill Education
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Chapter 12, Problem 12SP
Summary Introduction

Concept Introduction:

Cash Flow Statement: Cash flow statement tells company about the inflow and outflow of the cash into the business. From cash flow it is easier to find out the liquidity of the business. For a normal person cash flow is more important than the income statement.

To Prepare:

Full cash flow statement under indirect method.

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In February 2020, Ola Gott invested an additional $12000 in her business, Gott's Pharmacy, which is organized as a proprietorship. Gott's accountant, Sal Costa, recorded this receipt as an increase in cash and revenues. Is this treatment appropriate?
The accounting records of Nettle Distribution show the following assets and liabilities as of December 31, 2018 and 2019. Compute net income for 2019 by comparing total equity amounts for these two years and using thefollowing information: During 2019, the owner invested $35,000 additional cash in the business and withdrew $19,000 cash for personal use.
Walters Inc. began operations on January 1, 2019. The following information relates to Walters’cash flows during 2019.Cash received from owners $201,500Cash paid for purchase of land andbuilding 128,700Cash paid for advertising 34,200Cash received from customers 139,800Cash paid to purchase machine $32,000Cash paid to employees for salaries 46,400Cash paid for dividends tostockholders 37,500Cash paid for supplies 28,700Required:1. Calculate the cash provided/used for each cash flow category.2. CONCEPTUAL CONNECTION Comment on Walters’ creditworthiness.

Chapter 12 Solutions

Loose Leaf for Financial Accounting: Information for Decisions

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