
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Transcribed Image Text:Use
ulate the cash flow from operating activities using the indirect
method.
AA. Statement of Cash Flows (Indirect Method) Use the following information regarding the Surpa
Corporation to (a) prepare a statement of cash flows using the indirect method and (b) compute
Surpa's operating-cash-flow -to-current-liabilities ratio.
Accounts payable increase. .
Accounts receivable increase. . .
Accrued liabilities decrease . ..
Amortization expense. .
Cash balance, January 1.. .
Cash balance, December 31..
Cash paid as dividends ...
Cash paid to purchase land . ..
Cash paid to retire bonds payable at par. .
Cash received from issuance of common stock...
Cash received from sale of equipment . ..
Depreciation expense. ..
Gain on sale of equipment . . ..
Inventory decrease. . .
Net income. . ..
am
. . . $ 13,000
..
4,000
6,000
7,000
21,000
17,000
31,000
90,000
60,000
40,000
17,000
29,000
7,000
13,000
78,000
3,000
140,000
Prepaid expenses increase ...
Average current liabilities. ..
A. Cash Flow
Activities (Indirect Method) The Azuza Company owns no plant as-
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- The primary objective of the statement of cash flows is to provide information about a company's: O Cash receipts and disbursements. O Noncash financing and investing activities. O Financial position. O Profitability.arrow_forwardPlease ayúdame!arrow_forwardWhich of the following items is deducted from net income to arrive at cash flow from operations when using the indirect method? a) Decrease in accounts payable b) Depreciation expense c) Amortization expense d) Decrease in accounts receivablearrow_forward
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- Helparrow_forwardWhat does letter B match with??arrow_forwardWhen using the indirect method of determining net cash flows from operating activities, how are revenues and expenses reported on the statement of cash flows if their cash effects are identical to the amounts reported in the income statement?arrow_forward
- Identify the section of the statement of cash flows (a–d) where each of the following items would be reported. Operating activitiesFinancing activities Investing activities Schedule of noncash financing and investing Amortization of patent Sale of machinery held for use by the company Issuance of bond payable Purchase of the stock of another company as investmentarrow_forwardUsing the following answer keys, you are to identify in which activity each of the transactions is classified and its effect on cash flows. Cash Flow Classification.using the capital letter only: . .Operating Activity • L.Investing Activity • F..Financing Activity • OL.Operating and Investing Activity • N.Noncash Transaction Effect on Cash Flows.using the capital letter only: • .Increase • D.Decrease N.No Effect Transaction Cash Flow Classification Effect on Cash Flows Paid a cash dividend. Decreased accounts receivable. Increased inventory. Retired long-term debt with cash. Sold long-term securities at a loss. Issued stock for equipment. Decreased prepaid insurance. Purchased treasury stock with cash. Retired a fully depreciated truck (no gain or loss). Transferred cash to money market account.arrow_forward3. Using the following answer keys, you are to identify in which activity each of the transactions is classified and its effect on cash flows. Cash Flow Classification...using the capital letter only: O...Operating Activity I...Investing Activity F...Financing Activity OI...Operating and Investing Activity N...Noncash Transaction Effect on Cash Flows...using the capital letter only: I...Increase D...Decrease N...No Effect Transaction Cash Flow Classification Effect on Cash Flows Declared and paid a cash dividend. Sold short-term trading securities at a gain. Retired fully depreciated equipment. Sold a machine at a loss. Purchased long-term available-for-sale securities. Decreased accounts receivable. Purchased 90-day Treasury bill. Incurred a net loss. Declared and issued a stock dividend. Sold treasury stock.arrow_forward
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