Connect Access Card for Financial Accounting: Information and Decisions
8th Edition
ISBN: 9781259662966
Author: John J Wild
Publisher: McGraw-Hill Education
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Question
Chapter 12, Problem 4PSA
Summary Introduction
Cash flow statement are referring as the statement which shows inflow and outflow of the cash in the business organization. Cash flow from operating activities can be made by two methods.
- Direct Method
- Indirect Method
To determine: Preparation of complete statement of cash flow using indirect method and also mention debit and credits in the analysis of changes columns with letter.
Expert Solution & Answer
Answer to Problem 4PSA
Analysis of changes column is $600,775.
Explanation of Solution
Following is a statement of cash movement:
December 31, 2015 | Analysis of changes | December 31, 2016 | ||||
Amount ($) | Debit Amount $ | Credit Amount $ | Amount ($) | |||
Balance sheet-Debit Accounts: | ||||||
Cash | 73,500 | 49,800 | ||||
50,625 | B | 15,185 | 65,810 | |||
Merchandise Inventory | 251,800 | C | 23,856 | 275,656 | ||
Prepaid Expenses | 1,875 | D | 625 | 1,250 | ||
Equipment | 108,000 | H | 96,375 | G | 46,875 | 157,500 |
485,800 | 550,016 | |||||
Balance sheet-Credit Accounts: | ||||||
46,000 | G | 30,125 | F | 20,750 | 36,625 | |
Account Payable | 114,675 | E | 61,534 | 53,141 | ||
Short-term note payable | 6,000 | J | 4,000 | 10,000 | ||
Long-term note payable | 48,750 | K | 50,125 | I | 66,375 | 65,000 |
Common stock, $5 par value | 150,250 | L | 12,500 | 162,750 | ||
Paid-in capital in excess of par value, common stock | - | L | 37,500 | 37,500 | ||
120,125 | M | 50,100 | A | 114,975 | 185,000 | |
485,800 | 550,016 |
Statement of Cash flow
Operating Activities: | ||||
Net Income | A | 114,975 | ||
Increase in account receivable | B | 15,185 | ||
Increase in inventory | C | 23,856 | ||
Decrease in prepaid expenses | D | 625 | ||
Decrease in account payable | E | 61,534 | ||
Depreciation Expense | F | 20,750 | ||
Loss on sale of Equipment | G | 5,125 | ||
Investing Activities: | ||||
Cash received from equipment sale | G | 11,625 | ||
Cash paid for equipment purchase | H | 30,000 | ||
Financing Activities: | ||||
Cash receipt from short-term notes payable | J | 4,000 | ||
Cash paid towards long-term notes payable | K | 50,125 | ||
Cash received by issuing shares | L | 50,000 | ||
Cash paid as dividends | M | 50,100 | ||
Non-Cash investing and financing activities | ||||
Long-term notes payable signed for equipment purchase | I | 66,375 | H | 66,375 |
600,775 | 600,775 |
The letter A through M that corresponds to the list of items should be written next to the amounts written under debit and credit.
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Chapter 12 Solutions
Connect Access Card for Financial Accounting: Information and Decisions
Ch. 12 - What is the reporting purpose of the statement of...Ch. 12 - Prob. 2DQCh. 12 - Prob. 3DQCh. 12 - Describe the direct method of reporting cash flows...Ch. 12 - Prob. 5DQCh. 12 - Prob. 6DQCh. 12 - Prob. 7DQCh. 12 - Prob. 8DQCh. 12 - Prob. 9DQCh. 12 - Prob. 10DQ
Ch. 12 - Prob. 11DQCh. 12 - Prob. 12DQCh. 12 - Prob. 13DQCh. 12 - Prob. 14DQCh. 12 - Prob. 15DQCh. 12 - Prob. 1QSCh. 12 - Prob. 2QSCh. 12 - Prob. 3QSCh. 12 - Prob. 4QSCh. 12 - Prob. 5QSCh. 12 - Prob. 6QSCh. 12 - Prob. 7QSCh. 12 - Prob. 8QSCh. 12 - Computing financing cash flows P3 The following...Ch. 12 - Prob. 10QSCh. 12 - Prob. 11QSCh. 12 - Prob. 12QSCh. 12 - Prob. 13QSCh. 12 - Refer to the data in QS 12-11. How much cash is...Ch. 12 - Prob. 15QSCh. 12 - Prob. 16QSCh. 12 - Prob. 17QSCh. 12 - Prob. 18QSCh. 12 - Prob. 19QSCh. 12 - Prob. 20QSCh. 12 - The following transactions and events occurred...Ch. 12 - Prob. 2ECh. 12 - Prob. 3ECh. 12 - Prob. 4ECh. 12 - Prob. 5ECh. 12 - Prob. 6ECh. 12 - Prob. 7ECh. 12 - Prob. 8ECh. 12 - Prob. 9ECh. 12 - Prob. 10ECh. 12 - Prob. 11ECh. 12 - Prob. 12ECh. 12 - Prob. 13ECh. 12 - Prob. 14ECh. 12 - Prob. 15ECh. 12 - Prob. 16ECh. 12 - Prob. 17ECh. 12 - Prob. 18ECh. 12 - Prob. 1PSACh. 12 - Prob. 2PSACh. 12 - Prob. 3PSACh. 12 - Prob. 4PSACh. 12 - Prob. 5PSACh. 12 - Prob. 6PSACh. 12 - Prob. 7PSACh. 12 - Prob. 8PSACh. 12 - Prob. 1PSBCh. 12 - Prob. 2PSBCh. 12 - Prob. 3PSBCh. 12 - Prob. 4PSBCh. 12 - Prob. 5PSBCh. 12 - Prob. 6PSBCh. 12 - Prob. 7PSBCh. 12 - Prob. 8PSBCh. 12 - Santana Rey, owner of Business Solutions, decides...Ch. 12 - Prob. 1BTNCh. 12 - Prob. 2BTNCh. 12 - Prob. 3BTNCh. 12 - Prob. 4BTNCh. 12 - Access the March 31, 2015, filing of the 10-K...Ch. 12 - Prob. 6BTNCh. 12 - Prob. 8BTNCh. 12 - Prob. 10BTN
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