Managerial Accounting: Tools for Business Decision Making
7th Edition
ISBN: 9781118334331
Author: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
Publisher: WILEY
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Chapter 13, Problem 13.10AP
To determine
Statement of
Statement of cash flow is a financial statement that shows the cash and cash equivalents of a company for a particular period of time. It shows the net changes in cash, by reporting the sources and uses of cash as a result of operating, investing, and financing activities of a company.
To prepare: The statement of cash flows using the indirect method.
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E12-7 Preparlng and Evaluating a Slimple Statement of Cash Flows (Indirect Method) [LO 12-1, LO
12-2, LO 12-5]
Suppose the income statement for Goggle Company reports $131 of net income, after deducting depreciation of $26. The
company bought equipment costing $105 and obtained a long-term bank loan for $106. The company's comparative balance
sheet, at December 31, is presented here.
Requlred:
1. Calculate the change in each balance sheet account and indicate whether each account relates to operating, investing, and.
financing activities (+ for increase and - for decrease).
2. Prepare a statement of cash flows using the indirect method.
6. Are the cash flows typical of a start-up, healthy, or troubled company?
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Required 6
Prepare a statement of cash flows using the indirect method. (Amounts to be deducted should be indicated with a minus
sign.)
GOGGLE COMPANY
Statement of Cash Flows
For the…
Use the following excerpts from Zowleski Company's financial information to
prepare a statement of cash flows (indirect method) for the year 2018.
Dec. 31,
Dec. 31,
2017
2018
Cash
Account Recelvable
Merchandise Inventory
Plant Assets
Accumulated Depreciation
Total Assets
$ 92,300
22,000
140,000
180,000
(25,000)
409,300
$ 85,000
22,900
131,000
150,000
(21,000)
367,900
Accounts Payable
Notes Payable
Common Stock
Retained Earnings
Total Liabilities and Equity
19,500
135,500
20,000
235,300
409,300
21,000
120,000
20,000
206,900
367,900
Additional information:
Net income for 2018
Depreciation expense for 2018 (accumulated depreciation increase)
Plant assets purchased (plant assets increase), financed by note
Notes payable increased by amount of plant asset purchase
Notes payable decreased by amount of principal note payments
28.400
4,000
30,000
30,000
14,500
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Prepare a statement of cash flows for the Maness Coporation, using the infromation shown in the balance sheets.
2017 2018 Changes
Assets
Cash $150 $125 $(25)
Accounts receiveable 350 375 25
Inventory 475 550 75
Total current assets 975 1,050 75
Gross fixed assets 2425 2750 325
Accumulated depreciation (1000) (1200) (200)
Net fixed assets 1425 1550 125
TOTAL ASSETS 2400 2600…
Chapter 13 Solutions
Managerial Accounting: Tools for Business Decision Making
Ch. 13 - (a) What is a statement of cash flows? (b) Mark...Ch. 13 - Prob. 2QCh. 13 - Prob. 3QCh. 13 - Prob. 4QCh. 13 - Prob. 5QCh. 13 - Prob. 6QCh. 13 - Prob. 7QCh. 13 - Contrast the advantages and disadvantages of the...Ch. 13 - Prob. 9QCh. 13 - Prob. 10Q
Ch. 13 - Prob. 11QCh. 13 - Prob. 12QCh. 13 - Prob. 13QCh. 13 - Prob. 14QCh. 13 - Prob. 15QCh. 13 - During 2017. Doubleday Company converted 1,700.000...Ch. 13 - Prob. 17QCh. 13 - Prob. 18QCh. 13 - Prob. 19QCh. 13 - Prob. 20QCh. 13 - Prob. 21QCh. 13 - Prob. 13.1BECh. 13 - Classify items by activities. (LO 1), C Classify...Ch. 13 - Prob. 13.3BECh. 13 - Prob. 13.4BECh. 13 - Prob. 13.5BECh. 13 - Prob. 13.6BECh. 13 - Prob. 13.7BECh. 13 - Prob. 13.8BECh. 13 - Prob. 13.9BECh. 13 - Prob. 13.10BECh. 13 - The management of Morrow Inc. is trying to decide...Ch. 13 - Prob. 13.12BECh. 13 - Prob. 13.13BECh. 13 - Prob. 13.14BECh. 13 - Prob. 13.1DICh. 13 - Prob. 13.2DICh. 13 - Prob. 13.3DICh. 13 - Tabares Corporation had these transactions during...Ch. 13 - An analysis of comparative balance sheets, the...Ch. 13 - Cushenberry Corporation had the following...Ch. 13 - Prob. 13.4ECh. 13 - The current sections of Scoggin Inc.s balance...Ch. 13 - Prob. 13.6ECh. 13 - Rojas Corporations comparative balance sheets are...Ch. 13 - Here are comparative balance sheets for Velo...Ch. 13 - Prob. 13.9ECh. 13 - Compute net cash provided by operating...Ch. 13 - Suppose a recent income statement for McDonalds...Ch. 13 - Compute cash flow from operating activitiesdirect...Ch. 13 - The following information is taken from the 2017...Ch. 13 - You are provided with the following transactions...Ch. 13 - The following account balances relate to the...Ch. 13 - The income statement of Whitlock Company is...Ch. 13 - Prob. 13.4APCh. 13 - Prob. 13.5APCh. 13 - Prob. 13.6APCh. 13 - Prob. 13.7APCh. 13 - Prob. 13.8APCh. 13 - Prob. 13.9APCh. 13 - Prob. 13.10APCh. 13 - Prob. 13.11APCh. 13 - Prob. 13.1BYPCh. 13 - Prob. 13.2BYPCh. 13 - Comparative Analysis Problem: Amazon.com, Inc. vs....Ch. 13 - Prob. 13.4BYPCh. 13 - Prob. 13.5BYPCh. 13 - Prob. 13.7BYPCh. 13 - Ethics Case Wesley Corp. is a medium-sized...Ch. 13 - Prob. 13.9BYP
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- Use the following excerpts from Zowleski Company's financial information to prepare a statement of cash flows (indire method) for the year 2018. Dec. 31, 2018 Dec. 31, 2017 $ 92,300 22,000 140,000 180,000 (25,000) 409,300 $ 85,000 22,900 131,000 150,000 (21,000) 367,900 Cash Account Receivable Merchandise Inventory Plant Assets Accumulated Depreciation Total Assets Accounts Payable Notes Payable Common Stock Retained Earnings Total Liabilities and Equity 18,500 135,500 20,000 235,300 409,300 21,000 120,000 20,000 206,900 367,900 Additional information: Net income for 2018 Depreciation expense for 2018 (accumulated depreciation increase) Plant assets purchased (plant assets increase), financed by note Notes payable increased by amount of plant asset purchase Notes payable decreased by amount of principal note payments 28,400 4,000 30,000 30,000 14,500arrow_forwardThe Travis Company uses the spreadsheet method for completing the statement of cash flows. The balance sheet accounts and other information related to those accounts are presented below for Travis Company: December 31 Assets 2017 2016 Cash $ 140,000 $ 100,000 Accounts Receivable, net 200,000 240,000 Inventory 160,000 140,000 Long-Term Investments 60,000 150,000 Plant Assets 500,000 450,000 Accumulated Depreciation (300,000) (290,000) Patents 8,000 10,000 Total Assets $ 768,000 $ 800,000 Equities Accounts Payable $ 100,000 $ 80,000 Bonds Payable, due 2017 180,000 240,000 Common Stock, $10 par 200,000 160,000 Additional Paid-in Capital 160,000 140,000 Retained Earnings 128,000 180,000 Total Equities $ 768,000 $ 800,000 Additional information related to 2017 activities: 1. Net loss for 2017 was $40,000. 2. Cash dividends of $12,000 were declared and paid in 2017. 3. 4,000 shares of common stock were issued to bondholders…arrow_forwardcreate a statement of cash flows with the given information: Scruggs, Inc. Balance Sheet December 31, 2017 2016 Cash $17,000 $12,000 Account receivable 60,000 40,000 Inventory 84,000 70,000 Prepaid expenses 6,000 4,000 Property, Plant & Equipment 250,000 210,000 Accumulated depreciation (60,000) (48,000) $357,000 $288,000 Accounts payable $35,000 $40,000 Interest payable 3,000 4,000 Income taxes payable 22,000 12,000 Bonds payable (due in 2020) 90,000 64,000 Common Stock $5 par 95,000 80,000 Retained Earnings 112,000 88,000 $357,000 $288,000…arrow_forward
- Swifty Ltd. had the following 2023 income statement data: Revenues Expenses 1/1/23 Revenues $113,000 In 2023, Swifty had the following activity in selected accounts: 12/31/23 49,200 $63,800 Accounts Receivable 19,100 113,000 34,780 1,320 Write-offs 96,000 Collections Allowance for Expected Credit Losses Write-offs 1.320 Swifty Ltd. Statement of Cash Flows (Indirect Method) 1,300 1.540 1.520 1/1/23 Loss on impairment 12/31/23 Prepare Swifty's cash flows from operating activities section of the statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a negative sign e.g. -10,000 or in parenthesis eg. (10,000).arrow_forwardPB8. LO 16.4 Use the following excerpts from Stern Company's financial information to prepare a statement of cash flows (indirect method) for the year 2018. Dec. 31, Dec. 31, 2018 2017 $121,000 37,200 120,000 304,000 Cash Account Receivable $101,000 35,300 Merchandise Inventory Plant Assets 128,700 254,000 (64,000) Accumulated Depreciation (85,000) Total Assets 497,200 455,000 Accounts Payable Notes Payable Common Stock Retained Earnings 23,200 179,500 30,000 264,500 497,200 19,900 144,000 30,000 261,100 455,000 Total Liabilities and Equity Additional information: Net income for 2018 Depreciation expense for 2018 (accumulated depreciation increase) Plant assets purchased (plant assets increase), financed by note Notes payable increased by amount of plant asset purchase Notes payable decreased by amount of principal note payments 3,400 21,000 50,000 50,000 14,500arrow_forwardYeoman Inc. reported thne following data: Net income $307,200 Depreciation expense 65,100 Loss on disposal of equipment 33,400 Increase in accounts receivable 15,000 Increase in accounts payable 10,700 Prepare the Cash Flows from (used for) Operating Activities section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments. Yeoman Inc. Statement of Cash Flows (partial) Cash flows from (used for) operating activities: Net income Adjustments to reconcile net income to net cash flows from (used for) operating activities: Depreciation expense Loss on disposal of equipment Changes in current operating assets and liabilities: Increase in accounts receivable v Increase in accounts payable Net cash flows from operating activities Check My Work Previousarrow_forward
- Use the attached financial statements below and the additional information to prepare a Statement of Cash Flows using the indirect method. Mistletoe Inc. Statement of Financial Position As at December 31st, 2021 Assets 2021 2020 Current Cash $78,200 $39,000 FVPL Investments 110,600 54,000 Accounts receivable 144,000 72,000 Allowance for doubtful accounts (32,000) (21,000) Inventory 90,000 117,000 Total current assets $390,800 $261,000 Long-Term Assets Land $180,000 $144,000 Buildings 315,000 270,000 Equipment 264,000 185,000 Accumulated depreciation (130,000) (164,000) Total long-term assets 629,000 435,000 Total assets $1,019,800 $696,000 Liabilities and Shareholders’ Equity Current liabilities Accounts payable $45,000 $72,000 Income tax payable 32,400…arrow_forwardUse the attached financial statements below and the additional information to prepare a Statement of Cash Flows using the indirect method. Mistletoe Inc. Statement of Financial Position As at December 31st, 2021 Assets 2021 2020 Current Cash $78,200 $39,000 FVPL Investments 110,600 54,000 Accounts receivable 144,000 72,000 Allowance for doubtful accounts (32,000) (21,000) Inventory 90,000 117,000 Total current assets $390,800 $261,000 Long-Term Assets Land $180,000 $144,000 Buildings 315,000 270,000 Equipment 264,000 185,000 Accumulated depreciation (130,000) (164,000) Total long-term assets 629,000 435,000 Total assets $1,019,800 $696,000 Liabilities and Shareholders’ Equity Current liabilities Accounts payable $45,000 $72,000 Income tax payable 32,400…arrow_forwardUsing the information below, calculate Cabana Co.’s Net Operating Cash Flow for 2017. It is not necessary to produce a complete Statement of Cash Flows – only Net Operating Cash Flow is required. 2016 2017 Net Income $100,000 $110,000 Accounts Receivable 80,000 70,000 Accounts Payable 15,000 30,000 Prepaid Expenses 5,000 7,000 Inventory 20,000 30,000 Unearned Revenue 5,000 1,000 PP&E 200,000 220,000 Depreciation Expense 20,000 25,000arrow_forward
- Statement of Cash Flows—Indirect Method The following balances are available for Chrisman Company: December 31 2017 2016 Cash $12,200 $15,300 Accounts receivable 30,500 22,900 Inventory 24,200 40,400 Prepaid rent 13,700 9,200 Land 114,400 114,400 Plant and equipment 610,000 457,500 Accumulated depreciation (99,100) (45,800) Totals $705,900 $613,900 Accounts payable $18,300 $15,300 Income taxes payable 4,600 7,600 Short-term notes payable 53,400 38,100 Bonds payable 114,000 153,000 Common stock 305,000 228,800 Retained earnings 210,600 171,100 Totals $705,900 $613,900 Bonds were retired during 2017 at face value, plant and equipment were acquired for cash, and common stock was issued for cash. The depreciation expense for the year was $53,300. Net income was reported at $39,500. Required: 1. Prepare a statement of cash flows for 2017 using the indirect method in the Operating…arrow_forwardPB10. LO 16.4 Use the following excerpts from Mountain Company's financial information to prepare a statement of cash flows (indirect method) for the year 2018. Dec. 31, 2018 Dec. 31, 2017 $ 93,000 Cash Account Receivable Merchandise Inventory Investments $100,000 19,000 29,000 132,000 90,000 18,000 31,500 120,000 90,000 Plant Assets Accumulated Depreciation Total Assets (37,000) 333,000 (23,000) 329,500 Accounts Payable Accrued Liabilities 12,100 2,400 81,000 237,500 333,000 13,400 1,900 63,000 251,200 Common Stock Retained Earnings Total Liabilities and Equity 329,500 Additional information: Net income (loss) for 2018 Depreciation expense for 2018 Investments purchased, for cash Common stock issued for cash, at par value Dividends declared and paid (5,700) 14,000 12,000 18,000 8,000arrow_forwardZoom Company uses the indirect method to prepare its statement of cash flows. Please refer to the following portion of the comparative balance sheet: Increase/decrease $ 18,000 35,000 25,000 90,000 2014 2013 Cash Accounts receivable Inventory PP&E, net Total assets $ 21,000 31,000 53,000 120,000 $225,000 $168,000 $ 3,000 (4,000) 28,000 30,000 $57,000 Additional information provided: Equipment costing $52,000 was purchased for cash. Equipment with a net asset value of $10,000 was sold for $14,000. • Depreciation expense of $12,000 was recorded during the year. Based on the info presented which of the following is the correct net amount of Cash from investing activities? A) $30,000 negative B) $60,000 positive C) $52,000 negative D) $38,000 negativearrow_forward
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