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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 Net Cash Flows from Operating Activities-Direct Method

Yogurt Plus, a restaurant, collected the following information on inflows and outflows for 2019:

Chapter 11, Problem 57PSA, Preparing Net Cash Flows from Operating Activities-Direct Method Yogurt Plus, a restaurant,

Yogurt Plus had a cash balance of $21,800 at 1/1/2019.

Required:

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

2. CONCEPTUAL CONNECTION What can you conclude by examining the patterns in Yogurt Plus’s cash flows?

To determine

(a)

Under the direct method, the main segment of the cash flow statement that will contrast in introduction is the cash flow from activities area. The direct method records the cash receipts and installments made amid a period for a business' tasks.

To prepare:

Prepare a statement of cash flow using direct method to determine net cash flow from operating activities.

Explanation

In the book of Yogurt Plus

Cash flow for operating activity by direct method

Particular Amount ($)
Cash received from the sale 344500
Cash pa...
To determine

(b)

Under the direct method, the main segment of the cash flow statement that will contrast in introduction is the cash flow from activities area. The direct method records the cash receipts and installments made amid a period for a business' tasks.

To discuss:

What can you conclude by examining the patterns in Yogut plus’s cash flow?

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