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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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Classification of Cash Flows

Rolling Meadows Country Club Inc. is a privately owned corporation that operates a golf club.

Rolling Meadows reported the following inflows and outflows of cash during 2019:

Chapter 11, Problem 54PSA, Classification of Cash Flows Rolling Meadows Country Club Inc. is a privately owned corporation that

Rolling Meadows had cash on hand at lllf2019 of $8,500.

Required:

1. Prepare a properly formatted statement of cash flows using the indirect method.

2. CONCEPTUAL CONNECTION What can you conclude by examining the patterns in Rolling Meadow’s cash flows”?

To determine

(a)

A cash flow statement is a budget report that gives total information in regard to all cash inflows an organization gets from its continuous tasks and outside venture sources, just as all cash outflows that compensation for business activities and speculations amid a given period.

To compute:

Prepare a properly formatted statement of cash flows the indirect method.

Explanation

In the books of Rolling Meadows Country Club Inc.

Prepare the cash flow statement:

Particular Detail ($) Amount ($)
Net income 125800
Depreciation expense of Building 35100
Depreciation expense of Golf carts 21250 56350
Operating profit before working capital changes 182150
Add: Decrease in accounts receivable 7175
Less: Increase in pro shop inventory (23300)
Less: Increase in prepaid insurance (12600)
Add: Increase in accounts payable 13210
Less: Decrease in wages payable (7400)
Add: Increase in income taxes payable 2125 (20790)
Operating cash pro...
To determine

(b)

Checking cash flow is critical to a sound business. A cash flow statement examination is a profound jump into your business' budgetary wellbeing and is an approach to investigate your cash flow in and out all through a given timespan.

To discuss:

What can you conclude by examining the patterns in Rolling Meadow’s cash flows?

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