EBK ACCOUNTING PRINCIPLES
13th Edition
ISBN: 9781119411017
Author: Weygandt
Publisher: WILEY
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Chapter 17, Problem 3ISTQ
To determine
Introduction: The
To choose: The correct option from the given options.
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The following selected transactions apply to Topeca Supply for November and December, Year 1. November was the first month of
operations. Sales tax is collected at the time of sale but is not paid to the state sales tax agency until the following month.
1. Cash sales for November, Year 1 were $64,000 plus sales tax of 6 percent.
2. Topeca Supply paid the November sales tax to the state agency on December 10, Year 1.
3. Cash sales for December, Year 1 were $80,000 plus sales tax of 6 percent.
Required
a. Show the effect of the above transactions on a statements model like the one shown as follows. In the Cash Flow column, indicate
whether the item is an operating activity (OA), an investing activity (IA), or a financing activity (FA). If an element is not affected by the
event, leave the cell blank.
b. What was the total amount of sales tax paid in Year 1?
c. What was the total amount of sales tax collected in Year 1?
d. What is the amount of the sales tax liability as of December 31,…
The balance sheet provided by the title is only part of the balance sheet, so the final calculated Asset may not be equal to Equity and Liabilities, but it does not affect the preparation of the cash flow statement.Prepare a statement of cashflow( Direct method)
PLZZ EXPERTS TRY TO GIVE FAST
Which of the following is not a purpose of cash flows statement.
Select one:
O a. They predict net income.
O b. They help evaluate management decisions.
c. The predict ability to pay debts or dividends.
O d. They predict future flows.
Chapter 17 Solutions
EBK ACCOUNTING PRINCIPLES
Ch. 17 - Prob. 1QCh. 17 - Prob. 2QCh. 17 - Prob. 3QCh. 17 - Prob. 4QCh. 17 - Prob. 5QCh. 17 - Prob. 6QCh. 17 - 7. Why is it necessary to use comparative balance...Ch. 17 - 8. Contrast the advantages and disadvantages of...Ch. 17 - Prob. 9QCh. 17 - Prob. 10Q
Ch. 17 - Prob. 11QCh. 17 - Prob. 12QCh. 17 - Prob. 13QCh. 17 - Prob. 14QCh. 17 - Prob. 15QCh. 17 - Prob. 16QCh. 17 - Prob. 17QCh. 17 - Prob. 18QCh. 17 - Prob. 19QCh. 17 - Prob. 20QCh. 17 - Prob. 21QCh. 17 - Prob. 22QCh. 17 - Prob. 1BECh. 17 - Prob. 2BECh. 17 - Prob. 3BECh. 17 - Prob. 4BECh. 17 - Prob. 5BECh. 17 - Prob. 6BECh. 17 - Prob. 7BECh. 17 - Prob. 8BECh. 17 - BE17-9 Hinck Corporation reported net cash...Ch. 17 - BE17-10 Suppose in a recent quarter, Alliance...Ch. 17 - BE17-11 The management of Morrow Inc. is trying to...Ch. 17 - BE17-12 Suppose Columbia Sportswear Company had...Ch. 17 - Prob. 13BECh. 17 - Prob. 14BECh. 17 - Prob. 1DIECh. 17 - Prob. 2aDIECh. 17 - Prob. 2bDIECh. 17 - Prob. 3DIECh. 17 - Prob. 1ECh. 17 - E17-2 An analysis of comparative balance sheets,...Ch. 17 - Prob. 3ECh. 17 - Prob. 4ECh. 17 - Prob. 5ECh. 17 - Prob. 6ECh. 17 - Prob. 7ECh. 17 - Prob. 8ECh. 17 - Prob. 9ECh. 17 - Prob. 10ECh. 17 - Prob. 11ECh. 17 - E17-11 Suppose a recent income statement for...Ch. 17 - Prob. 13ECh. 17 - Prob. 14ECh. 17 - Prob. 1PSACh. 17 - Prob. 2PSACh. 17 - Prob. 3PSACh. 17 - Prob. 4PSACh. 17 - Prob. 5PSACh. 17 - Prob. 6PSACh. 17 - Prob. 7PSACh. 17 - P17-8A Data for Nosker Company are presented in...Ch. 17 - Prob. 9PSACh. 17 - Prob. 10PSACh. 17 - Prob. 11PSACh. 17 - Prob. 17CCCh. 17 - Prob. 2EYCTCh. 17 - Prob. 3EYCTCh. 17 - Prob. 4EYCTCh. 17 - Prob. 5EYCTCh. 17 - Prob. 7EYCTCh. 17 - Prob. 1ISTQCh. 17 - Prob. 2ISTQCh. 17 - Prob. 3ISTQCh. 17 - Prob. 4ISTQCh. 17 - Prob. 5ISTQCh. 17 - Prob. 1IFRECh. 17 - Prob. 2IFRECh. 17 - Prob. 3IFRP
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- Why is using the direct method to prepare the operating section of the statement of cash flows more challenging for accountants than preparing the balance sheet, income statement, and retained earnings statement?arrow_forward1. What is the purpose of a statement of cash flows? How does it differ from a balance sheet and an income statement? 2. Difference between operating activities, investing activities, and financing activities. 3. What is the purpose of a free cash flow analysis? 4. What are some of the techniques of disclosure for the balance sheet? 5. What is a “Summary of Significant Accounting Policies”?arrow_forwardStatement of projected future cash flows is least likely be required by SECP for a company filing for registration. Why?arrow_forward
- An SME does not need to present a statement of cash flows. True or falsearrow_forwardWhich statement is incorrect? Under cash basis of accounting, * A. the matching principle is ignored.B. if cash is collected, revenue is recorded regardless of earning process.C. revenue is recognized when the receivable is initially recordedD. the projection of the timing and amounts of future cash flows is less accurate than under accrual accounting.E. none of the abovearrow_forwardWhich of the following statements is false? (You may select more than one answer.)a. Purchasing a new manufacturing plant is classified as an investing activity.b. Paying off accounts payable balances is classified as a financing activity.c. Dividend payments are classified as a financing activity.d. Either the direct or the indirect method can be used to calculate the net cash provided by financing activities.arrow_forward
- Which of the following statements regarding the statement of cash flows is false?A. The statement of cash flow separates cash inflow and outflows into three major categories: operating, investing and financingB. The ending cash balance shown on the statement of cash flows must agree with the amount shown on the balance sheet at the end of the same periodC. The total increase or decrease in cash shown on the statement of cash flows must agree with the bottom line (net income or net loss) reported on the income statementD. The statement of cash flows covers a period of timearrow_forwardb. Record each event in a statements model like the following one. In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity, or NC for net change in cash. If the element is not affected by the event, leave the cell blank. The first event is recorded as an example. (Not every cell will require entry. Enter any decreases to account balances and cash outflows with a minus sign.) Event Bal. 1a. 1b. 2. 3. 4a. 4b. 5a. 5b. 6. 7. 8. Bal. Cash Assets Accounts + Receivable 8,100+ + (510)+ + + + + (810) + + + + + $ 6,780 + + + + + + 9,100+ + + + + + Balance Sheet Merchandise Inventory = Liabilities + Stockholders' Equity Accounts Common Payable Stock Retained Earnings 2,600 = 2,100 = 5,600 = 510= 300 = 6,100 = = REDD COMPANY Horizontal Statements Model - Year 2 $ 9,100+ $ 14,610 = $ + + + + + + 0+ + 7,600 + + + + + + + + + $7,600 + Revenue $ 2,600 $ Income Statement Expenses = 0-$ = = 0= $ Net Income 0 $ Statement of Cash Flows 0arrow_forwardb. Record each event in a statements model like the following one. In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity, or NC for net change in cash. If the element is not affected by the event, leave the cell blank. The first event is recorded as an example. (Not every cell will require entry. Enter any decreases to account balances and cash outflows with a minus sign.) REDD COMPANY Horizontal Statements Model - 2018 Balance Sheet Income Statement Statement of Cash Flows Event Assets = Liabilities + Stockholders' Equity Retained Revenue - Earnings Net Income Expenses Accounts Receivable Merchandise Accounts Common Stock Cash Inventory Payable Bal. 7,700 + 1,700 7,200 + 2,200 1a 5,200 = 5,200 + + 1b. (470) 470 OA + + 2. (400)=| + 3. (4,704) + (96) = 96 OA + + + 4а. 8,700 + 8,700 + 4b. (5,700) 5,700 = (5,700) 5а. (770) + (770) OA + 5b. 470 (470)|= 470 + + (570) + 570 = (570) OA (174) OA 6. + + = 7. 8,526 + (8,700) + + +…arrow_forward
- Please answer all the questions 1. Define net operating cash flows. Briefly explain why periodic net operating cash flows may not be a good indicator of future operating cash flows. 2. What is meant by GAAP? why should all companies follow GAAP in reporting to external users?please 3. Explain the roles of the SEC and the FASB in the sitting of accounting standards.arrow_forwardWhich of the following returns is consistent with contractual cash flows that are SPPI? Return for passage of time. Return for the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. Return for the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. Return for amounts to cover expenses and a profit margin. Group of answer choices I, II and III only I and IV only I, II, III and IV II and III onlyarrow_forward1. What is the primary objective of financial accounting? 2. Define net operating cash flows. Briefly explain why periodic net operating cash flows may not be a good indicator of future operating cash flows. 3. What is meant by GAAP? why should all companies follow GAAP in reporting to external users? 4. Explain the roles of the SEC and the FASB in the sitting of accounting standards.arrow_forward
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