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Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter9: Long-term Liabilities

Section: Chapter Questions

Problem 89E: Ratio Analysis Rising Stars Academy provided the following information on its 2019 balance sheet and...

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Buffalo Corporation had the following 2020 income statement.

Revenues		$104,000
Expenses		62,000
		$42,000

In 2020, Buffalo had the following activity in selected accounts.

Accounts Receivable

1/1/20	22,000
Revenues	104,000
12/31/20	33,000

Write-offs	1,000
Collections	92,000

Allowance for Doubtful Accounts


Write-offs	1,000

1/1/20	1,000
Bad debt expense	1,900
12/31/20	1,900

(a) Prepare Buffalo’s cash flows from operating activities section of the statement of cash flows using the direct method.

Buffalo Corporation Statement of Cash Flows-Direct Method (Partial)

		$

		$

(b) Prepare Buffalo’s cash flows from operating activities section of the statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Buffalo Corporation Statement of Cash Flows-Indirect Method (Partial)

		$

		$

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