Cash Flows from Operating Activities-Indirect Method The income statement disclosed the following items for the year: Depreciation expense $52,000 Gain on disposal of 30,330 equipment Net income 382,200 The changes in the current asset and liability accounts for the year are as follows: Increase (Decrease) Accounts receivable $8,100 Inventory (4,610) Prepaid insurance (1,730) Accounts payable (5,490) Income taxes payable 1,730 Dividends payable 1,210 a. Prepare the "Cash flows from operating activities" section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments. Statement of Cash Flows (partial) Cash flows from operating activities: Adjustments to reconcile net income to net cash flow from operating activities: Changes in current operating assets and liabilities: Net cash flow from operating activities

Cash Flows from Operating Activities-Indirect Method The income statement disclosed the following items for the year: Depreciation expense $52,000 Gain on disposal of 30,330 equipment Net income 382,200 The changes in the current asset and liability accounts for the year are as follows: Increase (Decrease) Accounts receivable $8,100 Inventory (4,610) Prepaid insurance (1,730) Accounts payable (5,490) Income taxes payable 1,730 Dividends payable 1,210 a. Prepare the "Cash flows from operating activities" section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments. Statement of Cash Flows (partial) Cash flows from operating activities: Adjustments to reconcile net income to net cash flow from operating activities: Changes in current operating assets and liabilities: Net cash flow from operating activities

Name: Cash Flows from Operating Activities-Indirect MethodThe income statem
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Description: Cash Flows from Operating Activities-Indirect MethodThe income statement disclosed the following items for the year:Depreciation expense $52,000Gain on disposal of30,330equipmentNet income382,200The changes in the current asset and liability account

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter15: Statement Of Cash Flows

Section: Chapter Questions

Problem 5E: Cash flows from operating activitiesindirect method The net income reported on the income statement...

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Net Cash Flow from Operating Activities The following are accounting items taken from Tyrone Shoelaces Required: a. Net income, 22,900 b. Payment for purchase of land, 4,000 c. Payment for retirement of bonds, 6,000 d. Depreciation expense, 7,800 e. Receipt from issuance of common stock, 7,000 f. Patent amortization expense, 2,700 g. Increase in accounts receivable, 3,400 h. Payment of dividends, 5,000 i. Decrease in accounts payable, 2,600 Required: Prepare the operating activities section of Tyrones statement of cash flows using the indirect method.
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Statement of cash flowsindirect method The comparative balance sheet of Yellow Dog Enterprises Inc. at December 31, 20Y8 and 20Y7, is as follows: Additional data obtained from the income statement and from an examination of the accounts in the ledger for 20Y8 are as follows: a. Net income, 250,000. b. Depreciation reported on the income statement, 135,000. c. Equipment was purchased at a cost of 420,000 and fully depreciated equipment costing 90,000 was discarded, with no salvage realized. d. The mortgage note payable was not due for six years, but the terms permitted earlier payment without penalty. e. 30,000 shares of common stock were issued at 20 for cash. f. Cash dividends declared and paid, 45,000. Instructions Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities.
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