Preparing the Operating Activities Section The data below were provided by the accounting records of Franklin Company. Net income (accrual basis) $104,000 Depreciation expense 20,800 Decrease in salaries payable 3,120 Decrease in trade accounts receivable 4,680 Increase in merchandise inventory 6,500 Amortization of patent 260 Increase in long-term liabilities 26,000 Sale of capital stock for cash 65,000 Amortization of premium on bonds payable 520 Accounts payable increase 10,400 Stock dividend issued 26,000 Required Prepare the reconciliation of net income with cash flow from operations for inclusion in the statement of cash flows (indirect method). Note: If an item is not included in the operating activities section, leave the answer blank (zero). Cash flows from Operating Activities Net income Answer Adjustments: Depreciation expense Answer Amortization expense—patent Answer Amortization of premium on bonds payable Answer Decrease in accounts receivable Answer Increase in merchandise inventory Answer Increase in accounts payable Answer Increase in long-term liabilities Answer Decrease in salaries payable Answer Sale of capital stock for cash Answer Stock dividend issued Answer Net cash provided (used) by operating activities Answer
Preparing the Operating Activities Section The data below were provided by the accounting records of Franklin Company. Net income (accrual basis) $104,000 Depreciation expense 20,800 Decrease in salaries payable 3,120 Decrease in trade accounts receivable 4,680 Increase in merchandise inventory 6,500 Amortization of patent 260 Increase in long-term liabilities 26,000 Sale of capital stock for cash 65,000 Amortization of premium on bonds payable 520 Accounts payable increase 10,400 Stock dividend issued 26,000 Required Prepare the reconciliation of net income with cash flow from operations for inclusion in the statement of cash flows (indirect method). Note: If an item is not included in the operating activities section, leave the answer blank (zero). Cash flows from Operating Activities Net income Answer Adjustments: Depreciation expense Answer Amortization expense—patent Answer Amortization of premium on bonds payable Answer Decrease in accounts receivable Answer Increase in merchandise inventory Answer Increase in accounts payable Answer Increase in long-term liabilities Answer Decrease in salaries payable Answer Sale of capital stock for cash Answer Stock dividend issued Answer Net cash provided (used) by operating activities Answer
Financial Accounting
15th Edition
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter16: Statement Of Cash Flows
Section: Chapter Questions
Problem 21E
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Question
Preparing the Operating Activities Section
The data below were provided by the accounting records of Franklin Company.
Net income (accrual basis) | $104,000 |
20,800 | |
Decrease in salaries payable | 3,120 |
Decrease in trade |
4,680 |
Increase in merchandise inventory | 6,500 |
Amortization of patent | 260 |
Increase in long-term liabilities | 26,000 |
Sale of capital stock for cash | 65,000 |
Amortization of premium on bonds payable | 520 |
Accounts payable increase | 10,400 |
Stock dividend issued | 26,000 |
Required
Prepare the reconciliation of net income with cash flow from operations for inclusion in the statement of cash flows (indirect method).
Note: If an item is not included in the operating activities section, leave the answer blank (zero).
Cash flows from Operating Activities | |
---|---|
Net income | Answer
|
Adjustments: | |
Depreciation expense | Answer
|
Amortization expense—patent | Answer
|
Amortization of premium on bonds payable | Answer
|
Decrease in accounts receivable | Answer
|
Increase in merchandise inventory | Answer
|
Increase in accounts payable | Answer
|
Increase in long-term liabilities | Answer
|
Decrease in salaries payable | Answer
|
Sale of capital stock for cash | Answer
|
Stock dividend issued | Answer
|
Net cash provided (used) by operating activities | Answer
|
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