Financial Accounting
3rd Edition
ISBN: 9780133791129
Author: Jane L. Reimers
Publisher: Pearson Higher Ed
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Chapter 9, Problem 17SEB
Evaluate adjustments to net income under the indirect method. (LO 5). The comparative balance sheets for JayCee Company showed the following changes in current asset accounts:
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The comparative balance sheets for Layton Company show these changes in noncash current asset accounts:
Accounts receivable decrease: $83,700,
Prepaid expenses increase: $27,180, and
Inventories increase: $29,290.
Compute net cash provided by operating activities using the indirect method assuming that net income is $180,980.
Tabor Company has just prepared the following comparative annual financial statements for the current year:
TABOR COMPANY
Comparative Income Statement
For the Years Ended December 31
Sales revenue (one-half on credit)
Cost of goods sold.
Gross profit
Expenses (including $7,200 interest expense each year).
Pretax income
Income tax expense (30%)
Net income
Assets
Cash
Accounts receivable
Inventory
Property & equipment (net)
Total assets
Liabilities
Accounts payable
Income taxes payable
Note payable, long-term
Stockholders' equity
TABOR COMPANY
Comparative Balance Sheet
At December 31
Capital stock ($5 par value)
Retained earnings
Total liabilities and stockholders' equity
Current Year Prior Year
$ 198,000
$ 257,400
93,600
124,800
132,600
96,200
36,400
10,920
$ 25,480
104,400
72,000
32,400
9,720
$ 22,680
Current Year
$ 51,100
61,000
28,200
103,000
$ 243,300
$ 43,400
2,600
56,000
98,000
43,300
$ 243,300
Prior Year
$ 39,600
40,000
44,400
121,000
$ 245,000
$ 46,200
1,300
56,000
106,000…
A company's income statement showed the following: net income, $139,000 and depreciation expense, $34,500. An examination of the company's current assets and current liabilities showed the following changes: accounts receivable decreased $10,900; merchandise inventory increased $21,000; and accounts payable increased $4,900. Calculate the net cash provided or used by operating activities.
Chapter 9 Solutions
Financial Accounting
Ch. 9 - Prob. 1YTCh. 9 - Prob. 2YTCh. 9 - Prob. 3YTCh. 9 - Prob. 4YTCh. 9 - Prob. 5YTCh. 9 - Prob. 1QCh. 9 - Prob. 2QCh. 9 - Prob. 3QCh. 9 - Prob. 4QCh. 9 - Prob. 5Q
Ch. 9 - Which types of business transactions would result...Ch. 9 - Prob. 7QCh. 9 - Which types of business transactions would result...Ch. 9 - Prob. 9QCh. 9 - Prob. 10QCh. 9 - Prob. 11QCh. 9 - Prob. 12QCh. 9 - Prob. 13QCh. 9 - Prob. 14QCh. 9 - Prob. 15QCh. 9 - Prob. 16QCh. 9 - Prob. 1MCQCh. 9 - Prob. 2MCQCh. 9 - Prob. 3MCQCh. 9 - Prob. 4MCQCh. 9 - Prob. 5MCQCh. 9 - Prob. 6MCQCh. 9 - Depreciation for the year was 50,000 and net...Ch. 9 - Accounts receivable decreased by 12,000....Ch. 9 - Prob. 9MCQCh. 9 - Prob. 10MCQCh. 9 - Prob. 1SEACh. 9 - Prob. 2SEACh. 9 - Calculate and identify cash flows. (LO 3, 6). A...Ch. 9 - Prob. 4SEACh. 9 - Prob. 5SEACh. 9 - Prob. 6SEACh. 9 - Prob. 7SEACh. 9 - Prob. 8SEACh. 9 - Prob. 9SEACh. 9 - Prob. 10SEBCh. 9 - Prob. 11SEBCh. 9 - Prob. 12SEBCh. 9 - Prob. 13SEBCh. 9 - Prob. 14SEBCh. 9 - Prob. 15SEBCh. 9 - Prob. 16SEBCh. 9 - Evaluate adjustments to net income under the...Ch. 9 - Prob. 18SEBCh. 9 - Prob. 19EACh. 9 - Prob. 20EACh. 9 - Prob. 21EACh. 9 - Prob. 22EACh. 9 - Prob. 23EACh. 9 - Prob. 24EACh. 9 - Prob. 25EACh. 9 - Prob. 26EACh. 9 - Prob. 27EACh. 9 - Prob. 28EACh. 9 - Prob. 29EACh. 9 - Calculate cash from operating activities using the...Ch. 9 - Prob. 31EACh. 9 - Prob. 32EACh. 9 - Prob. 33EACh. 9 - Prob. 34EBCh. 9 - Prob. 35EBCh. 9 - Prob. 36EBCh. 9 - Prob. 37EBCh. 9 - Prob. 38EBCh. 9 - Prob. 39EBCh. 9 - Prob. 40EBCh. 9 - Prob. 41EBCh. 9 - Prob. 42EBCh. 9 - Prob. 43EBCh. 9 - Prob. 44EBCh. 9 - Prob. 45EBCh. 9 - Prob. 46EBCh. 9 - Prob. 47EBCh. 9 - Prob. 48EBCh. 9 - Prob. 49PACh. 9 - Prob. 50PACh. 9 - Prob. 51PACh. 9 - Prob. 52PACh. 9 - Prob. 53PACh. 9 - Prob. 54PACh. 9 - Prob. 55PACh. 9 - Prob. 56PACh. 9 - Prob. 57PBCh. 9 - Prob. 58PBCh. 9 - Prob. 59PBCh. 9 - Prob. 60PBCh. 9 - Prob. 61PBCh. 9 - Prob. 62PBCh. 9 - Prob. 63PBCh. 9 - Prob. 64PBCh. 9 - Prob. 1FSACh. 9 - Prob. 2FSACh. 9 - Prob. 3FSACh. 9 - Prob. 1CTPCh. 9 - Prob. 2IE
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- The comparative balance sheets for Pronghorn Company show these changes in noncash current asset accounts: accounts receivable decreased $80,600, prepaid expenses increased $28,000, and inventories increased $40,000.Compute net cash provided by operating activities using the indirect method, assuming that net income is $224,300.arrow_forwardA company's income statement showed the following: net income, $128,000 and depreciation expense, $31,200. An examination of the company's current assets and current liabilities showed the following changes: accounts receivable decreased $9,800; merchandise inventory increased $18,800; and accounts payable increased $3,800. Calculate the net cash provided or used by operating activities. Multiple Choice $122,000. $164,400. $126,800.arrow_forwardThe cash flows from (used for) operating activities are reported by the direct method on the statement of cash flows. Determine the following: a. If sales for the current year were $558,800 and accounts receivable decreased by $39,700 during the year, what was the amount of cash received from customers?$fill in the blank 1 b. If income tax expense for the current year was $38,900 and income tax payable decreased by $4,500 during the year, what was the amount of cash paid for income taxes?$fill in the blank 2 c. Briefly explain why the cash received from customers in part (a) is different from sales.Because the customers paid than the amount of sales for the period, cash received from customers sales made on account by $39,700 during the current year.arrow_forward
- Bramble Company reported net income of $69800 for the year. During the year, accounts receivable increased by $6100, accounts payable decreased by $5000 and depreciationexpense of $7800 was recorded. Net cash provided by operating activities for the year is O $63100. O $88700. O $69800. O $66500.arrow_forwardBurch Company reported the following items in its statement of financial position and statement of earnings information: decrease in cash account, $6,000; increase in accounts receivable, $10,000; increase in inventory, $15,000; decrease in accounts payable, $15,000; increase in income taxes payable, $9,000; net income, $52,000; depreciation expense, $19,000. Required: Compute the net cash flows from operating activities using the indirect method.arrow_forwardBurch Company reported the following items in its statement of financial position and statement of earnings information: decrease in cash account, $6,000; increase in accounts receivable, $10,000; increase in inventory, $15,000; decrease in accounts payable, $15,000; increase in income taxes payable, $9,000; net income, $52,000; depreciation expense, $19,000. Required: Compute the net cash flows from operating activities using the indirect method.$fill in the blank 1arrow_forward
- A Co made a profit for the year of $18,750, after accounting for depreciation of $1,250. During the year, non-current assets were purchased for $8,000, receivables increased by $1,000, inventories decreased by $1,800 and payables increased by $350. What was A Co's increase in cash and bank balances during the year? A $10,650 В $10,850 C $12,450 $13,150arrow_forwardHuluduey Corporation’s comparative balance sheet for current assets and liabilities was as follows: Dec. 31, Year 2 Dec. 31, Year 1 Accounts receivable $31,340 $27,670 Inventory 17,180 16,090 Accounts payable 16,510 14,340 Dividends payable 51,850 49,250 Adjust net income of $211,930 for changes in operating assets and liabilities to arrive at net cash flow from operating activities. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. Use the minus sign to indicate cash outflows, cash payments, decreases in cash and for any adjustments, if required. Amount Descriptions Cash paid for dividends Decrease in accounts payable Decrease in accounts receivable Decrease in dividends payable Decrease in inventory Increase in accounts payable Increase in accounts receivable Increase in dividends payable Increase in inventory Net cash flow from operating…arrow_forwardThe balance sheets of Xenon Company reports total assets of $888,000 and $949,000 at the beginning and end of the year, respectively. Sales revenues are $1.8 million, net income is $194,000, and net cash flows from operating activities are $162,000. Required: Calculate the cash return on assets, cash flow to sales, and asset turnover. (Do not round intermediate calculations. Round your final answers to 1 decimal place.) Cash return on assets Cash flow to sales Asset turnover % % timesarrow_forward
- Cain Incorporated reports net income of $17,400. It's comparative balance sheet shows the following changes: accounts receivable increased $8400; inventory decreased $10, 400;prepaid insurance decreased $ 3400;accounts payable increase $5400;and taxes payable decrease $4400. Compute the cash flow from operations using the indirect method.arrow_forwardStaley Inc. reported the following data: Net income: $465,400 Depreciation expense: $68,100 Loss on disposal of equipment: $29,900 Increase in accounts receivable: $21,700 Increase in accounts payable: $12,700 Compute cash flow from operating activitiesarrow_forwardRogers Company reported net income of $44,587 for the year. During the year, accounts receivable increased by $7,982, accounts payable decreased by $2,757, and depreciation expense of $6,561 was recorded. Net cash provided by operating activities under the indirect method for the year is a.$44,587 b.$56,373 c.$61,887 d.$40,409arrow_forward
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