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 3PSB
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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Use the following information for the Problems below. Skip to question   [The following information applies to the questions displayed below.]Forten Company's current year income statement, comparative balance sheets, and additional information follow. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses.  FORTEN COMPANYComparative Balance SheetsDecember 31   Current Year   Prior Year Assets                       Cash   $ 58,900         $ 79,500     Accounts receivable     74,830           56,625     Inventory     284,656           257,800     Prepaid expenses     1,270           2,015     Total current assets     419,656           395,940     Equipment     151,500           114,000     Accum.…
Use the following information for the Problems below. Skip to question   [The following information applies to the questions displayed below.]Forten Company's current year income statement, comparative balance sheets, and additional information follow. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses.  FORTEN COMPANYComparative Balance SheetsDecember 31   Current Year   Prior Year Assets                       Cash   $ 58,900         $ 79,500     Accounts receivable     74,830           56,625     Inventory     284,656           257,800     Prepaid expenses     1,270           2,015     Total current assets     419,656           395,940     Equipment     151,500           114,000     Accum.…
Chicken Wings Company is engaged in buying and selling of office equipment which caters both cash and on account sales to customers.  The following are the transactions that affect accounts receivable during 2021:Sales (cash and on account), P715,171; Cash received from cash customers, P243,297; Cash received from credit customers (340,373 was received from customers who took advantage of the discount feature of the company’s credit term 3/10, n/30, P368,760; Accounts written of as worthless, P5,996; Credit memoranda issued to credit customers for sales returns and allowances, P29,250; Cash refunds given to cash customers for sales returns and allowances, P20,536; Recoveries on accounts written off as uncollectible in prior periods (not included in cash collections stated above), P8,004An aging of the receivables indicates that P20,933 of the accounts receivable balance are deemed uncollectible.The following balances were taken from the December 31, 2020 statement of financial…

Chapter 12 Solutions

Loose Leaf for Financial Accounting: Information for Decisions

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The KEY to Understanding Financial Statements; Author: Accounting Stuff;https://www.youtube.com/watch?v=_F6a0ddbjtI;License: Standard Youtube License