Suppose your company sells services of $180 in exchange for $110 cash and $70 on account. Required: 1. Prepare the journal entry to record this transaction. 2. Identify the amount that should be reported as net cash flow from operating activities. 3. Identify the amount that would be included in net income. 4. Show how the indirect method would convert net income (requirement 3) to net cash flow from operating activities (requirement 2).
Suppose your company sells services of $180 in exchange for $110 cash and $70 on account. Required: 1. Prepare the journal entry to record this transaction. 2. Identify the amount that should be reported as net cash flow from operating activities. 3. Identify the amount that would be included in net income. 4. Show how the indirect method would convert net income (requirement 3) to net cash flow from operating activities (requirement 2).
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 39E: Reporting Net Cash Flow from Operating Activities The following information is available for...
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![Journal entry worksheet
A
<>
Record the service revenue of $110 for cash and $70 on account.
Note: Enter debits before credits.
Transaction
General Journal
Debit
Credit
1
Record entry
Clear entry
Vlew general journal](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8ad87420-52d2-4e34-815e-eb9bcb5c95c0%2Fe4cc9ea5-057b-449c-918a-297fb6e6dabf%2Fpe67ptp_processed.png&w=3840&q=75)
Transcribed Image Text:Journal entry worksheet
A
<>
Record the service revenue of $110 for cash and $70 on account.
Note: Enter debits before credits.
Transaction
General Journal
Debit
Credit
1
Record entry
Clear entry
Vlew general journal
![Suppose your company sells services of $180 in exchange for $110 cash and $70 on account.
Required:
1. Prepare the journal entry to record this transaction.
2. Identify the amount that should be reported as net cash flow from operating activities.
3. Identify the amount that would be included in net income.
4. Show how the indirect method would convert net income (requirement 3) to net cash flow from operating activities
(requirement 2).](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8ad87420-52d2-4e34-815e-eb9bcb5c95c0%2Fe4cc9ea5-057b-449c-918a-297fb6e6dabf%2Fqc6sb6_processed.png&w=3840&q=75)
Transcribed Image Text:Suppose your company sells services of $180 in exchange for $110 cash and $70 on account.
Required:
1. Prepare the journal entry to record this transaction.
2. Identify the amount that should be reported as net cash flow from operating activities.
3. Identify the amount that would be included in net income.
4. Show how the indirect method would convert net income (requirement 3) to net cash flow from operating activities
(requirement 2).
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