Managerial Accounting
Managerial Accounting
15th Edition
ISBN: 9781337912020
Author: Carl Warren, Ph.d. Cma William B. Tayler
Publisher: South-Western College Pub
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Chapter 15, Problem 4BE
To determine

Prepare the cash flows from operating activities sections of the statement of cash flows using indirect method.

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Using the direct method of preparing the statement of cash flows, to determine the cash effects of operating activities, which of the following needs to be adjusted?   a. Equity as reported in the balance sheet b. Long-term assets and liabilities from the balance sheet c. Net income d. Reported revenues and expenses
Classifying Items in the Statement of Cash Flows The following items are commonly reported in a statement of cash flows (indirect method presentation). For each item 1 through 20, determine (a) in which section the item is presented (operating, investing, or financing) and (b) whether the associated dollar amount is added or subtracted in the statement.   (a) (b) 1. Payments of short-term debt. AnswerOperatingInvestingFinancing AnswerAddSubtract 2. Repurchases of common stock. AnswerOperatingInvestingFinancing AnswerAddSubtract 3. Purchases of property and equipment. AnswerOperatingInvestingFinancing AnswerAddSubtract 4. Sale of investments classified as long-term. AnswerOperatingInvestingFinancing AnswerAddSubtract 5. Proceeds from the issuance of common stock. AnswerOperatingInvestingFinancing AnswerAddSubtract 6. Increase in prepaid expenses and other current assets. AnswerOperatingInvestingFinancing AnswerAddSubtract 7. Acquisition for cash of a competitor.…
When using the indirect method of preparing the statement of cash flows, the starting pointto determine net cash provided by operating activities isa. sales.b. net income.c. the beginning cash balance.d. the ending cash balance.

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Managerial Accounting

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