Using the indirect method, calculate the amount of cash flows from operating activities from the following data. Net income $150,000 Beginning accounts receivable 20,000 Ending accounts receivable 25,000 Beginning prepaid insurance 5,000 Ending prepaid insurance 2,000 Beginning accounts payable 15,000 Ending accounts payable 12,000 Depreciation expense 50,000 Amortization of intangible asset 6,000 Dividends declared and paid 11,000 Cash flows from operating activities 2$

Using the indirect method, calculate the amount of cash flows from operating activities from the following data. Net income $150,000 Beginning accounts receivable 20,000 Ending accounts receivable 25,000 Beginning prepaid insurance 5,000 Ending prepaid insurance 2,000 Beginning accounts payable 15,000 Ending accounts payable 12,000 Depreciation expense 50,000 Amortization of intangible asset 6,000 Dividends declared and paid 11,000 Cash flows from operating activities 2$

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 40E

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Which item is added to net income when computing cash flows from operating activities? a. Gain on the disposal of property, plant, and equipment b. Increase in wages payable c. Increase in inventory d. Increase in prepaid rent Use the following information for Multiple-Choice Questions 11-9 and 11-10: Cornett Company reported the following information: cash received from the issuance of common stock, $150,000; cash received from the sale of equipment, $14,800; cash paid to purchase an investment, $20,000; cash paid to retire a note payable, $50,000; and cash collected from sales to customers, $225,000.
Thompson Company sold a piece of equipment that had an original cost of 22,000 and a carrying value of 10,000 for 13,000 in cash. How would this information be reported on a statement of cash flows prepared using the indirect method?
Cash flows from operating activitiesindirect method The net income reported on the income statement for the current year was 93,700. Depreciation recorded on store equipment for the year amounted to 31,200. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: a. Prepare the Cash flows from operating activities section of the statement of cash flows, using the indirect method. b. Briefly explain why net cash flow from operating activities is different than net income.
The following balance sheets and income statement were taken from the records of Rosie-Lee Company: Additional transactions were as follows: a. Sold equipment costing 21,600, with accumulated depreciation of 16,200, for 3,600. b. Issued bonds for 90,000 on December 31. c. Paid cash dividends of 36,000. d. Retired mortgage of 108,000 on December 31. Required: 1. Prepare a schedule of operating cash flows using (a) the indirect method and (b) the direct method. 2. Prepare a statement of cash flows using the indirect method.
Determining Cash Flows from Investing Activities Burns Companys 2019 and 2018 balance sheets presented the following data for equipment: During 2019, equipment costing $41,000 with accumulated depreciation of $36,700 was sold for cash, producing a $3,200 gain. Required: 1. Calculate the amount of depreciation expense for 2019. 2. Calculate the amount of cash spent for equipment during 2019. 3. Calculate the amount that should be included as a cash inflow from the disposal of equipment.
Use the following information from Birch Companys balance sheets to determine net cash flows from operating activities (indirect method), assuming net income for 2018 of $122,000.
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