Principles of Financial Accounting.
24th Edition
ISBN: 9781260158601
Author: Wild
Publisher: MCG
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Chapter 16, Problem 2BTN
COMMUNICATING IN PRACTICE
Your friend, Diana Wood, recently completed the second year of her business and just received annual financial statements from her accountant. Wood finds the income statement and
Required
Write a half-page memorandum to your friend explaining the purpose of the statement of cash flows. Speculate as to why the first section is so confusing and how it might be rectified.
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Your friend, Diana Wood, recently completed the second year of her business and just received annual financial statements from her accountant. Wood finds the income statement and balance sheet informative but does not understand the statement of cash flows. She says the first section is especially confusing because it contains a lot of additions and subtractions that do not make sense to her. Wood adds, “The income statement tells me the business is more profitable than last year and that’s most important. If I want to know how cash changes, I can look at comparative balance sheets.” Required Write a half-page memorandum to your friend explaining the purpose of the statement of cash flows. Speculate as to why the first section is so confusing and how it might be rectified.
Kate has just completed her first year running Kate’s Cards. She has been preparing monthly income statements and balance sheets, so she knows that her company has been profitable and that there is cash in the bank. She has not, however, prepared a statement of cash flows. Kate provides you with the year-end income statement and balance sheet and asks that you prepare a statement of cash flows for Kate’s Cards.Additional information:1. There were no disposals of equipment during the year. 2. Dividends in the amount of $1,300 were paid in cash during the year. 3. Prepaid expenses relate to operating expenses.Required. Prepare a statement of cash flows for Kate’s Cards for the year ended August 31, 2019, using the indirect method. Hint: Since this was Kate’s first year of operations, the beginning balance sheet account balances were zero. The second picture where it shows pink is what needs to be filled in.
Kate has just completed her first year running Kate’s Cards. She has been preparing monthly income statements and balance sheets, so she knows that her company has been profitable and that there is cash in the bank. She has not, however, prepared a statement of cash flows. Kate provides you with the year-end income statement and balance sheet and asks that you prepare a statement of cash flows for Kate’s Cards. Additional information: 1. There were no disposals of equipment during the year. 2. Dividends in the amount of $1,300 were paid in cash during the year. 3. Prepaid expenses relate to operating expenses. Required a. Prepare a statement of cash flows for Kate’s Cards for the year ended August 31 using the in- direct method. Hint: Since this was Kate’s first year of operations, the beginning balance sheet account balances were zero. b. Prepare a statement of cash flows for Kate’s Cards for the year ended August 31 using the direct method. (Appendix 12A)
KATE’S CARDS Income…
Chapter 16 Solutions
Principles of Financial Accounting.
Ch. 16 - A company uses the indirect method to determine...Ch. 16 - Prob. 2MCQCh. 16 - Prob. 3MCQCh. 16 - Prob. 4MCQCh. 16 - The following information is available for a...Ch. 16 - Prob. 1DQCh. 16 - Prob. 2DQCh. 16 - Prob. 3DQCh. 16 - Prob. 4DQCh. 16 - When a statement of cash flows is prepared using...
Ch. 16 - Prob. 6DQCh. 16 - Prob. 7DQCh. 16 - Prob. 8DQCh. 16 - Prob. 9DQCh. 16 - If a company reports positive net income for the...Ch. 16 - Prob. 11DQCh. 16 - Prob. 12DQCh. 16 - Prob. 13DQCh. 16 - Prob. 14DQCh. 16 - Prob. 15DQCh. 16 - Classify the following cash flows as either...Ch. 16 - Statement of cash flows Label the following...Ch. 16 - Prob. 3QSCh. 16 - Prob. 4QSCh. 16 - Prob. 5QSCh. 16 - Prob. 6QSCh. 16 - Prob. 7QSCh. 16 - Prob. 8QSCh. 16 - Prob. 9QSCh. 16 - The plant assets section of the comparative...Ch. 16 - Prob. 11QSCh. 16 - Prob. 12QSCh. 16 - Prob. 13QSCh. 16 - Prob. 14QSCh. 16 - Prob. 15QSCh. 16 - Prob. 16QSCh. 16 - Prob. 17QSCh. 16 - Prob. 18QSCh. 16 - Prob. 19QSCh. 16 - A company uses a spreadsheet to prepare its...Ch. 16 - Prob. 21QSCh. 16 - Bioware Co. reports cost of goods sold of 42,000....Ch. 16 - Prob. 23QSCh. 16 - Prob. 24QSCh. 16 - Refer to the data in QS 16-7. 1. How much cash is...Ch. 16 - Refer to the data in QS 16-7. 1. How much cash is...Ch. 16 - Prob. 27QSCh. 16 - Prob. 1ECh. 16 - Prob. 2ECh. 16 - Prob. 3ECh. 16 - Prob. 4ECh. 16 - Fitz Company reports the following information....Ch. 16 - Prob. 6ECh. 16 - Prob. 7ECh. 16 - Prob. 8ECh. 16 - Use the following information to determine cash...Ch. 16 - For each of the following separate transactions,...Ch. 16 - Prob. 11ECh. 16 - Use the following information to prepare a...Ch. 16 - Prob. 13ECh. 16 - Complete the following spreadsheet in preparation...Ch. 16 - Prob. 15ECh. 16 - Prob. 16ECh. 16 - Prob. 17ECh. 16 - Prob. 18ECh. 16 - Use the following information about Ferron Company...Ch. 16 - Prob. 20ECh. 16 - Prob. 1APCh. 16 - Refer to the information in Problem 16-1A....Ch. 16 - Forten Companys current-year income statement,...Ch. 16 - Prob. 4APCh. 16 - Prob. 5APCh. 16 - Golden Corp.s current-year income statement,...Ch. 16 - Prob. 7APCh. 16 - Prob. 8APCh. 16 - Prob. 1BPCh. 16 - Prob. 2BPCh. 16 - Gazelle Corporations current-year income...Ch. 16 - Prob. 4BPCh. 16 - Prob. 5BPCh. 16 - Prob. 6BPCh. 16 - Prob. 7BPCh. 16 - Prob. 8BPCh. 16 - Prob. 16SPCh. 16 - Use Apples financial statements in Appendix A to...Ch. 16 - Prob. 2AACh. 16 - Prob. 3AACh. 16 - Prob. 1BTNCh. 16 - COMMUNICATING IN PRACTICE Your friend, Diana Wood,...Ch. 16 - Prob. 3BTNCh. 16 - Prob. 5BTNCh. 16 - Prob. 6BTN
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