2. Prepare the Operating Activities section under the Direct Method As of June 30, 2020, the organization had $165,814 of cash on hand at the beginning of the year. During the year, the center received cash from contributors: $310,400 that was unrestricted and $38,200 that was restricted for the purpose of equipment for the center, it had $9,300 of income earned and received on long-term investments. The center spent cash of $288,510 on salaries and fringe benefits, $23,000 on the purchase of equipment for the center, and $86,604 for operating expenses. Other pertinent information follows: net pledges receivable increased $5,700, inventory increased $1,100, accounts payable decreased $103,094, and there were no salaries payable at the beginning of the year. Cash paid for operating expenses Cash paid to employees Cash received as investment income Cash received from contributions Change in Net Assets (From Statement of Activities) Decrease in A/P Depreciation Increase in inventory Increase in net pledges receivable Investment in Capital Assets (From Restricted contribution) Purchase of Furniture and Equipment Unrealized gain on investments 1. Prepare a Statement of Cash Flows (Indirect Method) 2. Prepare the Operating Activities section under the Direct Method 86,604 288,510 9,300 310,400 26,080 103,094 30,500 1,100 5,700 38,200 23,000 2,100
2. Prepare the Operating Activities section under the Direct Method As of June 30, 2020, the organization had $165,814 of cash on hand at the beginning of the year. During the year, the center received cash from contributors: $310,400 that was unrestricted and $38,200 that was restricted for the purpose of equipment for the center, it had $9,300 of income earned and received on long-term investments. The center spent cash of $288,510 on salaries and fringe benefits, $23,000 on the purchase of equipment for the center, and $86,604 for operating expenses. Other pertinent information follows: net pledges receivable increased $5,700, inventory increased $1,100, accounts payable decreased $103,094, and there were no salaries payable at the beginning of the year. Cash paid for operating expenses Cash paid to employees Cash received as investment income Cash received from contributions Change in Net Assets (From Statement of Activities) Decrease in A/P Depreciation Increase in inventory Increase in net pledges receivable Investment in Capital Assets (From Restricted contribution) Purchase of Furniture and Equipment Unrealized gain on investments 1. Prepare a Statement of Cash Flows (Indirect Method) 2. Prepare the Operating Activities section under the Direct Method 86,604 288,510 9,300 310,400 26,080 103,094 30,500 1,100 5,700 38,200 23,000 2,100
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter11: The Statement Of Cash Flows
Section: Chapter Questions
Problem 55PSA
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Question
Transcribed Image Text:1. Prepare a Statement of Cash Flows (Indirect
Method)
2. Prepare the Operating Activities section under
the Direct Method
As of June 30, 2020, the organization had $165,814 of cash on hand at the beginning of the year. During the year, the center received
cash from contributors: $310,400 that was unrestricted and $38,200 that was restricted for the purpose of equipment for the center, it
had $9,300 of income earned and received on long-term investments. The center spent cash of $288,510 on salaries and fringe benefits,
$23,000 on the purchase of equipment for the center, and $86,604 for operating expenses. Other pertinent information follows: net
pledges receivable increased $5,700, inventory increased $1,100, accounts payable decreased $103,094, and there were no salaries
payable at the beginning of the year.
Cash paid for operating expenses
Cash paid to employees
Cash received as investment income
Cash received from contributions
Change in Net Assets (From Statement of Activities)
Decrease in A/P
Depreciation
Increase in inventory
Increase in net pledges receivable
Investment in Capital Assets (From Restricted contribution)
Purchase of Furniture and Equipment
Unrealized gain on investments
1. Prepare a Statement of Cash Flows (Indirect Method)
2. Prepare the Operating Activities section under the Direct Method
86,604
288,510
9,300
310,400
26,080
103,094
30,500
1,100
5,700
38,200
23,000
2,100
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