Introduction To Managerial Accounting
8th Edition
ISBN: 9781259917066
Author: BREWER, Peter C., Garrison, Ray H., Noreen, Eric W.
Publisher: Mcgraw-hill Education,
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Textbook Question
Chapter 13, Problem 5E
Net Cash Provided by Operating Activities
Changes in various accounts and gains and losses on the sale of assets during the year for Argon Company are given below:
Required:
Prepare an answer sheet using the following column headings:
Item Amount Add Subtract
For each item, place an X in the Add or Subtract column to indicate whether the dollar amount should be added to or subtracted from net income under the indirect method when computing the net cash provided by operating activities for the year.
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Net Cash Provided by Operating Activities
Changes in various accounts and gains and losses on the sale of assets during the year for Argon Company are given below:
Required:
Prepare an answer sheet using the following column headings:
For each item, place an X in the Add or Subtract column to indicate whether the dollar amount should be added to or subtracted from net income under the indirect method when computing the net cash provided by operating activities for the year.
indicate whether each of the following would be added to be or deducted from net income in determining net cash flow from operating activities by the indirect method:
decrease in inventory
[The following information applies to the questions displayed below.]
Lansing Company's current-year income statement and selected balance sheet data at December 31 of the current and
prior years follow.
LANSING COMPANY
Income Statement
For Current Year Ended December 31
Sales revenue
Expenses
Cost of goods sold
Depreciation expense
Salaries expense
Rent expense
Insurance expense
Interest expense
Utilities expense
Net income
At December 31
Accounts receivable
Inventory
Accounts payable
$ 97,200
Salaries payable
Utilities payable
Prepaid insurance
Prepaid rent
42,000
12,000
18,000
LANSING COMPANY
Selected Balance Sheet Accounts
Current Year
$ 5,600
1,980
4,400
880
220
260
220
9,000
3,800
3,600
2,800
$ 6,000
Prior Year
$ 5,800
1,540
4,600
700
160
280
180
Chapter 13 Solutions
Introduction To Managerial Accounting
Ch. 13.A - Prob. 1ECh. 13.A - Prob. 2ECh. 13.A - Prob. 3ECh. 13.A - Prob. 4ECh. 13.A - Prob. 5PCh. 13.A - Prob. 6PCh. 13.A - Prob. 7PCh. 13 - Prob. 1QCh. 13 - Prob. 2QCh. 13 - Prob. 3Q
Ch. 13 - What general guidelines can you provide for...Ch. 13 - Prob. 5QCh. 13 - Prob. 6QCh. 13 - Prob. 7QCh. 13 - Prob. 8QCh. 13 - A business executive once stated, “Depreciation is...Ch. 13 - If the Accounts Receivable balance increases...Ch. 13 - Would a sale of equipment for cash be considered a...Ch. 13 - Prob. 12QCh. 13 - Ravenna Company is a merchandiser that uses the...Ch. 13 - Prob. 2F15Ch. 13 - Prob. 3F15Ch. 13 - Ravenna Company is a merchandiser that uses the...Ch. 13 - Prob. 5F15Ch. 13 - Ravenna Company is a merchandiser that uses the...Ch. 13 - Ravenna Company is a merchandiser that uses the...Ch. 13 - Prob. 8F15Ch. 13 - Prob. 9F15Ch. 13 - Prob. 10F15Ch. 13 - Prob. 11F15Ch. 13 - Ravenna Company is a merchandiser that uses the...Ch. 13 - Ravenna Company is a merchandiser that uses the...Ch. 13 - Prob. 14F15Ch. 13 - Prob. 15F15Ch. 13 - Prob. 1ECh. 13 - Net Cash Provided by Operating Activities For the...Ch. 13 - Prob. 3ECh. 13 - Prob. 4ECh. 13 - Net Cash Provided by Operating Activities Changes...Ch. 13 - Prepare a Statement of Cash Flows; Free Cash Flow...Ch. 13 - Prob. 7PCh. 13 - Prob. 8PCh. 13 - Prob. 9PCh. 13 - Prepare a Statement of Cash Flows; Free Cash...Ch. 13 - Prob. 11PCh. 13 - Prepare a Statement of Cash Flows A comparative...Ch. 13 - Prob. 13PCh. 13 - Prob. 14P
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- What adjustment(s) should be made to reconcile net income to net cash flows from operating activities (indirect method) considering the following balances in current assets?arrow_forwardCash flows from operating activitiesindirect method The net income reported on the income statement for the current year was 93,700. Depreciation recorded on store equipment for the year amounted to 31,200. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: a. Prepare the Cash flows from operating activities section of the statement of cash flows, using the indirect method. b. Briefly explain why net cash flow from operating activities is different than net income.arrow_forwardUse the following information of VPI Company to prepare a statement of cash flows for the year ended December 31 using the indirect method. Note: Amounts to be deducted should be indicated by a minus sign. Cash balance at prior year-end Increase in inventory Depreciation expense Cash received from issuing stock Cash paid for dividends VPI COMPANY Statement of Cash Flows (Indirect Method) For Current Year Ended December 31 Cash flows from operating activities Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Changes in current operating assets and liabilities $ 43,400 Gain on sale of machinery 8,400 Cash received from sale of machinery 7,400 Increase in accounts payable 11,400 Net income 4,400 Decrease in accounts receivable Cash flows from investing activities Cash flows from financing activities $ 2,850 11, 200 3,200 57,000 6,400arrow_forward
- Hamburger Heaven's income statement for the current year and selected balance sheet data for the current and prior years ended December 31 are presented below. Income Statement Sales Revenue $1,860 Expenses: Cost of Goods Sold 850 Depreciation Expense Salaries and Wages Expense Rent Expense 150 450 200 Insurance Expense 75 Interest Expense Utilities Expense 45 Net Income 35 Selected Balance Sheet Accounts Current Year Prior Year 72 Inventory Accounts Receivable 55 355 400 Accounts Payable Salaries/Wages Payable Utilities Payable Prepaid Rent Prepaid Insurance 225 260 39 25 25 10 14 TIP: Prepaid Rent decreased because the amount taken out of Prepaid Rent (and subtracted from net income as Rent Expense) was more than the amount paid for rent in cash during the current year. Required: Prepare the cash flows from operating activities section of the statement of cash flows using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)arrow_forwardUse the following income statement and balance sheet to determine the net cash provided by operating activities under the indirect method. Sales Cost of goods sold Depreciation expense Operating expenses (excluding depreciation) Other gains (losses) Gain on sale of equipment Income before taxes Income tax expense Net income At December 31 Assets Cash Income Statement For Year Ended December 31, Year 2 Total assets Accounts receivable Inventory Equipment Accumulated depreciation - Equipment Liabilities Accounts payable Income taxes payable Total liabilities Equity Balance Sheets Common stock Paid-in Capital in excess of par value Retained earnings Total equity Total liabilities and equity $ 334,400 41,500 134,000 $ 529,500 (509,900) 6,900 $ 26,500 (6,500) $ 20,000 Year 2 $ 65,200 24,400 61,400 274,000 (114,000) $ 311,000 $ 31,800 3,600 $ 35,400 $ 123,000 19,700 132,900 $ 275,600 $ 311,000 Year 1 $ 57,500 30,700 53,800 239,000 (104,500) $ 276,500 $ 25,400 4,600 $ 30,000 $ 123,000 19,700…arrow_forward
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