Intermediate Accounting: Reporting and Analysis
2nd Edition
ISBN: 9781285453828
Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher: Cengage Learning
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Chapter 5, Problem 15E
To determine
Prepare the statement of
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Cash Flow Statement-Operating Activities
The Garfield Ltd company uses the indirect method for preparing its statement of cash flows. It reported a net income of $100,000 for the year 2016.
During the year 2016, the working capital accounts were changed as follows:
Increase in accounts receivable: $22,000
Increase in accounts payable: $18,600
Increase in inventory: $14,800
Decrease in non-trade notes payable: $30,000
Increase in available for sale securities: $32,000
The depreciation expense was $34,000 for the year 2016.
Required: Compute net cash provided (used) by operating activities using the indirect method.
The following are several items involving the cash flow activities of the ROCKY HORROR PICTURE CO. for 2016:
a. Net income, $43,700
b. Payment of dividends, $15,500
c. Ten-year, $33,000 bonds payable were issued at face value
d. Depreciation expense, $21,900
e. Building acquired at a cost of $37,800
f. Accounts receivable decreased by $3,700
g. Accounts payable decreased by $4,000
h. Equipment acquired at a cost of $6,100
i. Inventories increased by $7,400
j. Beginning cash balance, $27,600
Required:
Prepare Rocky Horror Picture's statement of cash flows for 2016 using the indirect method. Use a minus sign for any negative amounts.
STATEMENT OF CASH FLOWS
An entity presented the following comparative financial information:
2018
2017
Property, plant and equipment
2,190,000
1,440,000
Accumulated depreciation
450,000
270,000
Long-term investments
225,000
-
Prepaid expenses
351,000
315,000
Merchandise inventory
1,950,000
1,260,000
Accounts receivable, net of allowance
1,560,000
1,080,000
Cash
690,000
640,000
Share capital-ordinary
3,000,000
2,400,000
Retained earnings
906,000
688,000
Long-term note payable
1,275,000
1,095,000
Accounts payable
309,000
282,000
Dividend payable
201,000
-
Accrued expenses
825,000
-
2018
2017
Net credit sales
7,020,000
3,753,000…
Chapter 5 Solutions
Intermediate Accounting: Reporting and Analysis
Ch. 5 - In general, how does the income statement help...Ch. 5 - Prob. 2GICh. 5 - Define income under the capital maintenance...Ch. 5 - Prob. 4GICh. 5 - What is net income?Ch. 5 - What three things must a company determine to...Ch. 5 - Prob. 7GICh. 5 - Prob. 8GICh. 5 - Prob. 9GICh. 5 - Give an example and explanation for each of the...
Ch. 5 - Define expenses. What do expenses measure?Ch. 5 - Prob. 12GICh. 5 - Define gains and losses. Give examples of three...Ch. 5 - Prob. 14GICh. 5 - What items are included in a companys income from...Ch. 5 - How are unusual or infrequent gains or losses...Ch. 5 - What is interperiod tax allocation?Ch. 5 - Prob. 18GICh. 5 - Prob. 19GICh. 5 - Prob. 20GICh. 5 - Prob. 21GICh. 5 - Prob. 22GICh. 5 - Prob. 23GICh. 5 - Prob. 24GICh. 5 - Prob. 25GICh. 5 - Prob. 26GICh. 5 - Prob. 27GICh. 5 - Prob. 28GICh. 5 - Prob. 29GICh. 5 - Prob. 30GICh. 5 - Prob. 31GICh. 5 - Prob. 32GICh. 5 - What is the rate of return on common equity? What...Ch. 5 - Prob. 34GICh. 5 - Prob. 35GICh. 5 - Which of the following is expensed under the...Ch. 5 - The following information is available for Cooke...Ch. 5 - The following information is available for Wagner...Ch. 5 - Prob. 4MCCh. 5 - A loss from the sale of a component of a business...Ch. 5 - In a statement of cash flows, receipts from sales...Ch. 5 - Brandt Corporation had sales revenue of 500,000...Ch. 5 - Refer to RE5-1. Prepare a single-step income...Ch. 5 - Shaquille Corporation began the current year with...Ch. 5 - Dorno Corporation incurred expenses during the...Ch. 5 - Niler Corporation reported the following after-tax...Ch. 5 - Jordan Corporation reported retained earnings of...Ch. 5 - Prob. 7RECh. 5 - Prob. 8RECh. 5 - Amelias Bookstore reported net income of 62,000...Ch. 5 - Prob. 10RECh. 5 - Prob. 1ECh. 5 - Prob. 2ECh. 5 - Prob. 3ECh. 5 - Cost of Goods Sold and Income Statement Schuch...Ch. 5 - Prob. 5ECh. 5 - Prob. 6ECh. 5 - Prob. 7ECh. 5 - Prob. 8ECh. 5 - Prob. 9ECh. 5 - Prob. 10ECh. 5 - Prob. 11ECh. 5 - Prob. 12ECh. 5 - Prob. 13ECh. 5 - Prob. 14ECh. 5 - Prob. 15ECh. 5 - Prob. 16ECh. 5 - Prob. 17ECh. 5 - Classifications Where would each of the following...Ch. 5 - Prob. 19ECh. 5 - Common-Size Analyses Meagley Company presents the...Ch. 5 - Prob. 21ECh. 5 - Prob. 22ECh. 5 - Prob. 23ECh. 5 - Prob. 24ECh. 5 - Prob. 25ECh. 5 - Prob. 26ECh. 5 - Prob. 1PCh. 5 - Prob. 2PCh. 5 - Prob. 3PCh. 5 - Prob. 4PCh. 5 - Financial Statement Violations of U.S. GAAP The...Ch. 5 - Rox Corporations multiple-step income statement...Ch. 5 - Prob. 7PCh. 5 - Prob. 8PCh. 5 - Prob. 9PCh. 5 - The following is an alphabetical list of accounts...Ch. 5 - Financial Statement Deficiencies The following is...Ch. 5 - Prob. 12PCh. 5 - Prob. 13PCh. 5 - Prob. 14PCh. 5 - Prob. 15PCh. 5 - Prob. 16PCh. 5 - Prob. 17PCh. 5 - Prob. 18PCh. 5 - Prob. 19PCh. 5 - Prob. 20PCh. 5 - Prob. 21PCh. 5 - Prob. 22PCh. 5 - Prob. 23PCh. 5 - Prob. 1CCh. 5 - Prob. 2CCh. 5 - Prob. 3CCh. 5 - Prob. 4CCh. 5 - Nonrecurring Items Lynn Company sells a component...Ch. 5 - Prob. 6CCh. 5 - Accrual Accounting GAAP requires the use of...Ch. 5 - Prob. 8CCh. 5 - Prob. 9CCh. 5 - Prob. 10CCh. 5 - Prob. 12C
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- Statement of Cash Flows The following are Mueller Companys cash flow activities: a. Net income, 68,000 b. Increase in accounts receivable, 4,400 c. Receipt from sale of common stock, 12,300 d. Depreciation expense, 11,300 e. Dividends paid, 24,500 f. Payment for purchase of building, 65,000 g. Bond discount amortization, 2,700 h. Receipt from sale of long-term investments at cost, 10,600 i. Payment for purchase of equipment, 8,000 j. Receipt from sale of preferred stock, 20,000 k. Increase in income taxes payable, 3,500 l. Payment for purchase of land, 9,700 m. Decrease in accounts payable, 2,900 n. Increase in inventories, 10,300 o. Beginning cash balance, 18,000 Required: Prepare Mueller Company's statement of cash flows.arrow_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_forwardStatement of Cash Flows—Indirect Method The following balances are available for Chrisman Company: December 31 2017 2016 Cash $12,200 $15,300 Accounts receivable 30,500 22,900 Inventory 24,200 40,400 Prepaid rent 13,700 9,200 Land 114,400 114,400 Plant and equipment 610,000 457,500 Accumulated depreciation (99,100) (45,800) Totals $705,900 $613,900 Accounts payable $18,300 $15,300 Income taxes payable 4,600 7,600 Short-term notes payable 53,400 38,100 Bonds payable 114,000 153,000 Common stock 305,000 228,800 Retained earnings 210,600 171,100 Totals $705,900 $613,900 Bonds were retired during 2017 at face value, plant and equipment were acquired for cash, and common stock was issued for cash. The depreciation expense for the year was $53,300. Net income was reported at $39,500. Required: 1. Prepare a statement of cash flows for 2017 using the indirect method in the Operating…arrow_forward
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