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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881

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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881
Textbook Problem
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Preparing a Statement of Cash Flows-Direct Method

Financial statements for Rowe Publishing Company are presented below.

Chapter 11, Problem 50E, Preparing a Statement of Cash Flows-Direct Method Financial statements for Rowe Publishing Company

Required:

Prepare a statement of cash flows for 2019, using the direct method to determine net cash flow from operating activities.

To determine

Introduction:

The immediate technique for introducing the announcement of money streams displays the particular money streams related with things that influence income. Things that normally do as such include:

Money gathered from clients

Intrigue and profits received

Money paid to workers

Money paid to providers

Intrigue paid

Salary charges paid

To compute:

Prepare the cash flow from operating activities section of the statement of cash flow using the direct method.

Explanation

Cash flow of operating activity by direct method

Particular Amount ($)
Cash flow from operating activity
Cash collected from debtor
Cash paid:
Cash paid to supplier
Cash paid for operating expense
Cash paid for interest
Cash paid for income tax
Cash provided operating activity
1,042,000
586,000
347,000
16,000
29,000
64,000

Cash collected from customer = sale - Increase in accounts receivable

=1,051,000 − 9,000 = 1,042,000...

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