The following schedule relates the income statement with cash flows from operating activities, derived by both the direct and indirect methods. The amounts for income statement elements are missing. Cash Flows from Operating Activities Indirect Method Direct Method Income Statement Net income Adjustment: Sales Cost of goods sold Decrease in accounts receivable $? Increase in inventory Cash received from customers $ 655 15 (30) ( 43) Cash paid to suppliers Cash paid to employees (Not reported-no cash effect) Cash paid for insurance (Not reported-no cash effect) Cash paid for income taxes Decrease in accounts payable Increase in salaries payable Salaries expense (457) 16 22 (41) Depreciation expense Depreciation expense Insurance expense Loss on sale of land Income tax expense Decrease in prepaid insurance Loss on sale of land Increase in income tax payable Net cash flows from operating activities 23 (19) 19 19 $ 99 Net cash flows from operating activities (39) $ 99 Net income $?

The following schedule relates the income statement with cash flows from operating activities, derived by both the direct and indirect methods. The amounts for income statement elements are missing. Cash Flows from Operating Activities Indirect Method Direct Method Income Statement Net income Adjustment: Sales Cost of goods sold Decrease in accounts receivable $? Increase in inventory Cash received from customers $ 655 15 (30) ( 43) Cash paid to suppliers Cash paid to employees (Not reported-no cash effect) Cash paid for insurance (Not reported-no cash effect) Cash paid for income taxes Decrease in accounts payable Increase in salaries payable Salaries expense (457) 16 22 (41) Depreciation expense Depreciation expense Insurance expense Loss on sale of land Income tax expense Decrease in prepaid insurance Loss on sale of land Increase in income tax payable Net cash flows from operating activities 23 (19) 19 19 $ 99 Net cash flows from operating activities (39) $ 99 Net income $?

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 15E

See similar textbooks

Similar questions

Smoltz Company reported the following information for the current year: cost of goods sold, $252,500; increase in inventory, $21,700; and increase in accounts payable, $12,200. What is the amount of cash paid to suppliers that Smoltz would report on its statement of cash flows under the direct method? a. $218,600 c. $262,000 b. $243,000 d. $286,400
Which of these transactions would not be part of the cash flows from the operating activities section of the statement of cash flows? A. credit purchase of inventory B. sales of product, for cash C. cash paid for purchase of equipment D. salary payments to employees
Classification of Cash Flows Patel Company reported the following items in its statement of cash flows presented using the indirect method. a. Issuance of common stock b. Cash paid for interest c. Sold equipment for cash d. Receipt of cash dividend on investment e. Repayment of principal on long-term debt f. Loss on disposal of equipment. Required: Indicate whether each item should be classified as a cash flow from operating activities, a cash flow from investing activities, a cash flow from financing activities. Use the following information for Cornerstone Exercises 11-16 and 11-17: A review of the balance sheet of Peterson Inc. revealed the following changes in the account balances: a. Increase in long-term investment b Increase in accounts receivable c. Increase in common stock d. Increase in long-term debt e. Decrease in accounts payable f. Decrease in supplies inventory g. Increase in prepaid insurance h. Decrease in retained earnings
Given the following information, convert Cardinal Companys cost of goods sold from its income statement into payments to suppliers for its statement of cash flows.
The following shows excerpts from Camole Companys statement of cash flows and other financial records. Compute the following for the company: A. free cash flow B. cash flows to sales ratio C. cash flows to assets ratio
The comparative balance sheet of Coulson, Inc. at December 31, 20Y2 and 20Y1, is as follows: The noncurrent asset, noncurrent liability, and stockholders equity accounts for 20Y2 are as follows: Instructions Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities.
During the year, Hepworth Company earned a net income of 61,725. Beginning and ending balances for the year for selected accounts are as follows: There were no financing or investing activities for the year. The above balances reflect all of the adjustments needed to adjust net income to operating cash flows. Required: 1. Prepare a schedule of operating cash flows using the indirect method. 2. Suppose that all the data are used in Requirement 1 except that the ending accounts payable and cash balances are not known. Assume also that you know that the operating cash flow for the year was 20,475. What is the ending balance of accounts payable? 3. CONCEPTUAL CONNECTION Hepworth has an opportunity to buy some equipment that will significantly increase productivity. The equipment costs 25,000. Assuming exactly the same data used for Requirement 1, can Hepworth buy the equipment using this years operating cash flows? If not, what would you suggest be done?
Financial data for Otto Company follow: a. Compute the ratio of cash to monthly cash expenses. b. Interpret the results computed in (a).
What are two ways to report a companys net cash flow from operating activities? Briefly describe each method.