College Accounting, Chapters 1-27
23rd Edition
ISBN: 9781337794756
Author: HEINTZ, James A.
Publisher: Cengage Learning,
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Chapter 23, Problem 9SPB
To determine
Prepare a partial statement of
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Schedule for Calculation of Cash Generated From Operating Activities
Zowine Company's condensed income statement for the year ended December 31, 20-2, is shown.
Net sales
$765,000
Cost of goods sold
550,000
Gross profit
$215,000
Operating expenses
30,000
Income before taxes
$185,000
Income tax expense
65,000
Net income
$120,000
Additional information obtained from Zowine's comparative balance sheets as of December 31, 20-2 and 20-1, is shown.
20-2
20-1
Cash
$60,000
$20,000
Accounts receivable
70,000
100,000
Merchandise inventory
80,000
125,000
Accounts payable
55,000
90,000
Cash Flows from Operating Activities—Direct Method
The income statement for Rhino Company for the current year ended June 30 and balances of selected accounts at the beginning and the end of the year are as follows:
Sales
$445,500
Cost of merchandise sold
154,000
Gross profit
$291,500
Operating expenses:
Depreciation expense
$38,500
Other operating expenses
115,280
Total operating expenses
153,780
Income before income tax
$137,720
Income tax expense
39,600
Net income
$98,120
End of Year
Beginning of Year
Accounts receivable (net)
$36,300
$31,240
Inventories
92,400
80,300
Prepaid expenses
14,520
15,840
Accounts payable (merchandise creditors)
67,540
62,700
Accrued expenses payable (operating expenses)
19,140
20,900
Income tax payable
4,400
4,400
Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the direct method. Use the…
Compute Cash Provided by Operating Activities
Prepare a partial statement of cash flows reporting cash provided by operating activities for the year ended December 31, 20-2. Use a minus to indicate any decreases in cash or cash outflows.
Horn Company's condensed income statement for the year ended December 31, 20-2, was as follows:
Net sales
$1,220,000
Cost of goods sold
740,000
Gross profit
$480,000
Operating expenses
142,000
Operating income
$338,000
Other revenues and expenses:
Interest revenue
$420
Interest expense
(1,200)
(780)
Income before taxes
$337,220
Income tax expense
118,000
Net income
$219,220
Additional information obtained from Horn's comparative balance sheet and auxiliary records as of December 31, 20-2 and 20-1, was as follows:
20-2
20-1
Accounts receivable
$135,000
$122,600
Merchandise inventory
145,300
158,900
Accounts payable
45,000
87,100
Income tax…
Chapter 23 Solutions
College Accounting, Chapters 1-27
Ch. 23 - True/False The purpose of the statement of cash...Ch. 23 - Investing activities are those transactions...Ch. 23 - An increase in accounts receivable is deducted...Ch. 23 - Prob. 4TFCh. 23 - Prob. 5TFCh. 23 - Prob. 1MCCh. 23 - Prob. 2MCCh. 23 - Prob. 3MCCh. 23 - Prob. 4MCCh. 23 - Prob. 5MC
Ch. 23 - Prob. 1CECh. 23 - Prob. 2CECh. 23 - Prob. 3CECh. 23 - Prob. 4CECh. 23 - Prob. 5CECh. 23 - Prob. 6CECh. 23 - Prob. 7CECh. 23 - Prob. 8CECh. 23 - Prob. 1RQCh. 23 - Prob. 2RQCh. 23 - Prob. 3RQCh. 23 - Prob. 4RQCh. 23 - Prob. 5RQCh. 23 - Prob. 6RQCh. 23 - Prob. 7RQCh. 23 - Prob. 8RQCh. 23 - Prob. 9RQCh. 23 - Prob. 10RQCh. 23 - Prob. 11RQCh. 23 - Prob. 12RQCh. 23 - Prob. 13RQCh. 23 - Prob. 14RQCh. 23 - Prob. 15RQCh. 23 - Prob. 16RQCh. 23 - Prob. 17RQCh. 23 - Prob. 18RQCh. 23 - Prob. 19RQCh. 23 - Prob. 20RQCh. 23 - Prob. 21RQCh. 23 - SERIES A EXERCISES IDENTIFICATION OF OPERATING,...Ch. 23 - CHANGE IN CASH AND CASH EQUIVALENTS Olsen Companys...Ch. 23 - Prob. 3SEACh. 23 - Prob. 4SEACh. 23 - GAINS AND LOSSES ON THE SALE OF LONG-TERM ASSETS...Ch. 23 - Prob. 6SEACh. 23 - Prob. 7SEACh. 23 - CASH PAID FOR INTEREST Ball Companys income...Ch. 23 - Prob. 9SPACh. 23 - Prob. 10SPACh. 23 - COMPUTE CASH PROVIDED BY OPERATING ACTIVITIES Horn...Ch. 23 - EXPANDED STATE MENT OF CASH FLOWS Financial...Ch. 23 - Prob. 1SEBCh. 23 - Prob. 2SEBCh. 23 - Prob. 3SEBCh. 23 - Prob. 4SEBCh. 23 - Prob. 5SEBCh. 23 - Prob. 6SEBCh. 23 - Prob. 7SEBCh. 23 - Prob. 8SEBCh. 23 - Prob. 9SPBCh. 23 - Prob. 10SPBCh. 23 - COMPUTE CASH PROVIDED BY OPERATING ACTIVITIES...Ch. 23 - EXPANDED STATEMENT OF CASH FLOWS Financial...Ch. 23 - MANAGING YOUR WRITING Direct Method A friend of...Ch. 23 - MASTERY PROBLEM Financial statements for...Ch. 23 - CHALLENGE PROBLEM The long-term liabilities...
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- COMPUTE CASH PROVIDED BY OPERATING ACTIVITIES Horn Companys condensed income statement for the year ended December 31, 20-2, was as follows: Additional information obtained from Horns comparative balance sheet and auxiliary records as of December 31, 20-2 and 20-1, was as follows: Depreciation expense for 20-2, included in operating expenses on the income statement, was 32,000. REQUIRED Prepare a partial statement of cash flows reporting cash provided by operating activities for the year ended December 31, 20-2.arrow_forwardCOMPUTE CASH PROVIDED BY OPERATING ACTIVITIES Horn Companys condensed income statement for the year ended December 31, 20-2, was as follows: Additional information obtained from Horns comparative balance sheet and auxiliary records as of December 31, 20-2 and 20-1, was as follows: Depreciation expense for 20-2, included in operating expenses on the income statement, was 32,000. REQUIRED Prepare a partial statement of cash flows reporting cash provided by operating activities for the year ended December 31, 20-2. SCHEDULE FOR CALCULATION OF CASH GENERATED FROM OPERATING ACTIVITIES Using the information provided in Problem 23-9A for Horn Company, prepare the following: 1. A schedule for the calculation of cash generated from operating activities for Horn Company for the year ended December 31, 20-2. 2. A partial statement of cash flows for Horn Company reporting cash from operating activities under the direct method for the year ended December 31, 20-2.arrow_forwardCOMPUTE CASH PROVIDED BY OPERATING ACTIVITIES Powell Companys condensed income statement for the year ended December 31, 20-2, was as follows: Additional information obtained from Horns comparative balance sheet and auxiliary records as of December 31, 20-2 and 20-1, was as follows: Depreciation expense for 20-2, included in operating expenses on the income statement, was 32,000. REQUIRED Prepare a partial statement of cash flows reporting cash provided by operating activities for the year ended December 31, 20-2. SCHEDULE FOR CALCULATION OF CASH GENERATED FROM OPERATING ACTIVITIES Using the information provided in Problem 23-11B for Powell Company, prepare the following: 1. A schedule for the calculation of cash generated from operating activities for Powell Company for the year ended December 31, 20-2. 2. A partial statement of cash flows for Powell Company reporting cash from operating activities under the direct method for the year ended December 31, 20-2.arrow_forward
- COMPUTE CASH PROVIDED BY OPERATING ACTIVITIES Powell Companys condensed income statement for the year ended December 31, 20-2, was as follows: Additional information obtained from Powells comparative balance sheet and auxiliary records as of December 31, 20-2 and 20-1, was as follows: Depreciation expense for 20-2, included in operating expenses on the income statement, was 29,000. REQUIRED Prepare a partial statement of cash flows reporting cash provided by operating activities for the year ended December 31, 20-2.arrow_forwardSmoltz Company reported the following information for the current year: cost of goods sold, $252,500; increase in inventory, $21,700; and increase in accounts payable, $12,200. What is the amount of cash paid to suppliers that Smoltz would report on its statement of cash flows under the direct method? a. $218,600 c. $262,000 b. $243,000 d. $286,400arrow_forwardPartial Statement of Cash Flows Service Company had net income during the current year of $65,800. The following information was obtained from Services balance sheet: Accounts receivable $26,540 increase Inventory 32,180 increase Accounts payable 9,300 decrease Interest payable 2,120 increase Accumulated depreciation (Building) 14,590 increase Accumulated depreciation (Equipment) 32,350 increase Additional Information: 1. Equipment with accumulated depreciation of $18,000 was sold during the year. 2. Cash dividends of $29,625 were paid during the year. Required: 1. Prepare the net cash flows from operating activities using the indirect method. 2. CONCEPTUAL CONNECTION How would the cash proceeds from the sale of equipment he reported on the statement of cash flows? 3. CONCEPTUAL CONNECTION How would the cash dividends be reported on the statement of cash flows? 4. CONCEPTUAL CONNECTION What could the difference between net income and cash flow from operating activities signal to financial statement users?arrow_forward
- Cash Flows from (used for) Operating Activities—Direct Method The income statement for Stallion Company for the current year ended June 30 and balances of selected accounts at the beginning and end of the year are as follows: Sales $374,500 Cost of merchandise sold 129,500 Gross profit $245,000 Operating expenses: Depreciation expense $32,400 Other operating expenses 96,910 Total operating expenses 129,310 Income before income tax $115,690 Income tax expense 33,290 Net income $82,400 End of Year Beginning of Year Accounts receivable (net) $30,510 $26,260 Inventories 77,670 67,500 Prepaid expenses 12,210 13,320 Accounts payable (merchandise creditors) 56,780 52,710 Accrued expenses payable (operating expenses) 16,090 17,600 Income tax payable 3,700 3,700 Prepare the Cash Flows from (used for) Operating Activities section of the statement of cash flows, using the direct method. Use the minus sign to indicate…arrow_forwardSchedule for Calculation of Cash Generated From Operating Activities Horn Company's condensed income statement for the year ended December 31, 20-2, is shown. Net sales $1,220,000 Cost of goods sold 740,000 Gross profit $480,000 Operating expenses 142,000 Operating income $338,000 Other revenues and expenses: Interest revenue $420 Interest expense (1,200) (780) Income before taxes $337,220 Income tax expense 118,000 Net income $219,220 Additional information obtained from Horn's comparative balance sheet and auxiliary records as of December 31, 20-2 and 20-1, is shown. 20-2 20-1 Accounts receivable $135,000 $122,600 Merchandise inventory 145,300 158,900 Accounts payable 45,000 87,100 Income tax payable 2,000 1,000 Supplies and prepayments 11,300 6,800 Accrued and withheld payroll taxes 2,750 3,700 Accrued interest receivable 90 210 Accrued interest payable 240 160…arrow_forward
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