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1.
Concept Introduction:
The operating activities section of the statement of cash flows can be prepared using the direct or indirect method. Under the indirect method, the net income is taken as basis and adjustments are made for non cash and non operating items of find the net operating cash flows.
To prepare:the statement of cash flow using the indirect method.
2.
Concept Introduction:
The operating activities section of the statement of cash flows can be prepared using the direct or indirect method. Under the indirect method, the net income is taken as basis and adjustments are made for non cash and non operating items of find the net operating cash flows.
To calculatethe cash flow to total asset ratio for the year 2018.
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Chapter 12 Solutions
Financial Accounting: Information for Decisions
- ABC reports periodic loss of £100. This loss includes a loss on disposal of PPE of £50. Accounts receivables at the end (beginning) of the year is £50 (£80) and provision for legal expenses at the end (beginning) of the year is £35 (£10). Based on this information, cash from operating activities is Select one: a. None of the other answers is correct b. -5 c. 5 d. -195 e. -95arrow_forwardCurrent Assets Listed here are certain accounts of Jenkins Company at the end of 2019; Debit (Credit) $12,000 1,530 1,200 4,300 5,400 (1,100) 3,380 (8,700) 15,500 970 27,200 19,000 Account Land Prepaid Insurance Cash on Hand Notes Receivable (due 2021) Cash in Bank Allowance for Doubtful Accounts Marketable Securities (Short-Term) Accumulated Depreciation Accounts Receivable Office Supplies Buildings Inventoryarrow_forwardA company reports net income of $9,300 for the year. During the year, the company reports an $1,060 loss from retirement of notes and a gain of $1,590 from the sale of equipment. Also, depreciation expense is $3,320. The only change in current assets and current liabilities was a $530 increase in inventory. Compute net cash provided by operating activities using the indirect method. Note: Amounts to be deducted should be indicated with a minus sign. Cash Flows from Operating Activities (Indirect) Net income Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Loss on retirement of notes Gain on sale of equipment Depreciation expense Changes in current assets and current liabilities $ $ 7,040 7,040arrow_forward
- A portion of the current assets section of the December 31, 2019, balance sheet for Gibbs Co. is presented here: Accounts receivable $ 23,700 Less: Allowance for bad debts (3,500 ) $ 20,200 The company’s accounting records revealed the following information for the year ended December 31, 2020: Sales (all on account) $ 154,500 Cash collections from customers 147,000 Accounts written off 2,900 Bad debts expense (accrued at 12/31/20) 5,800 Required:Calculate the net realizable value of accounts receivable at December 31, 2020, and prepare the appropriate balance sheet presentation for Gibbs Co. as of that point in time. (Hint: Use T-accounts to analyze the Accounts Receivable and Allowance for Bad Debts accounts.)arrow_forwardFDN Company shows the following balances on December 31, 2021: Accounts receivable P250,000 Accumulated depreciation P200,000 Allowance for uncollectible accounts P57,000 Cash P200,000 Property, plant and equipment P800,000 Supplies P20,000 How much is the Current Assets in the Statement of Financial Position as of December 31, 2021?arrow_forwardAt December 31, 2021, Wynne Company reported Accounts Receivable of $45,000 and Allowance for Doubtful Accounts of $3,500. On January 7, 2022, Brown Enterprises declares bankruptcy and it is determined that the receivable of $1,200 from Brown is not collectible. What is the cash realizable value of Accounts Receivable at December 31, 2021? Cash realizable value eTextbook and Media List of Accounts $ What entry would Wynne make to write off the Brown account? (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit eTextbook and Media List of Accounts What is the cash realizable value of Accounts Receivable after the Brown account is written off? Cash realizable value $arrow_forward
- A company reports net income of $9,600 for the year. During the year, the company reports an $1,120 loss from retirement of notes and a gain of $1,680 from the sale of equipment. Also, depreciation expense is $3,440. The only change in current assets and current liabilities was a $560 increase in inventory. Compute net cash provided by operating activities using the indirect method. Note: Amounts to be deducted should be indicated with a minus sign. Cash Flows from Operating Activities (Indirect) Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Changes in current assets and current liabilities 0arrow_forwardA portion of the current assets section of the December 31, 2019, balance sheet for Gibbs Co. Is presented here: Accounts receivable Less: Allowance for bad debts $ 21,700 (2,900) The company's accounting records revealed the following Information for the year ended December 31, 2020: Sales (all on account) Cash collections from customer's Accounts written off Bad debts expense (accrued at 12/31/20) At December 31, 2020 Accounts receivable Less: Allowance for bad debts Accounts receivable (Net) $ 18,800 $ $ 165,500 151,000 Required: Calculate the net realizable value of accounts receivable at December 31, 2020, and prepare the appropriate balance sheet presentation for Gibbs Co. as of that point in time. (Hint. Use T-accounts to analyze the Accounts Receivable and Allowance for Bad Debts accounts.) 4,100 5,000 0arrow_forwardAn entity reported the following current assets on December 31, 2020: Cash in bank 4,000,000 Accounts receivable 7,000,000 Notes receivable 2,500,000 Notes receivable discounted (400,000) Inventory 4,500,000 Financial asset – FVPL 1,000,000 Financial asset – FVOCI 1,500,000 Prepaid expenses 200,000 Deferred tax asset 2,500,000 Equipment classified as “held for sale” 2,000,000 Total 24,800,000 Customers’ accounts 5,000,000 Allowance for doubtful accounts (500,000) Sale price of unsold goods out on consignment at 125% of cost and excluded from ending inventory 2,500,000 Net accounts receivable 7,000,000 What amount should be reported as total current assets on December 31, 2020?arrow_forward
- The following information is taken from Jennifer Corporation's financial statements: December 31 2021 2020 Cash $ 73,080 $ 31,320 Accounts receivable 118,320 92,800 Allowance for doubtful accounts (5,220) (3,596) Inventory 185,600 203,000 Prepaid expenses 8,700 7,888 Land 116,000 69,600 Buildings 341,040 283,040 Accumulated depreciation (37,120) (15,080) Patents 23,200 40,600 $823,600 $709,572 Accounts payable $ 104,400 $ 97,440 Accrued liabilities 62,640 73,080 Bonds payable 145,000 69,600 Common stock 116,000 116,000 Retained earnings―appropriated 92,800 11,600 Retained earnings―unappropriated 320,160 351,132 Treasury stock, at cost (17,400) (9,280) $823,600 $709,572 For 2021 Year Net income $90,828…arrow_forwardThe following information is taken from Jennifer Corporation's financial statements: December 31 2021 2020 Cash $ 73,080 $ 31,320 Accounts receivable 118,320 92,800 Allowance for doubtful accounts (5,220) (3,596) Inventory 185,600 203,000 Prepaid expenses 8,700 7,888 Land 116,000 69,600 Buildings 341,040 283,040 Accumulated depreciation (37,120) (15,080) Patents 23,200 40,600 $823,600 $709,572 Accounts payable $ 104,400 $ 97,440 Accrued liabilities 62,640 73,080 Bonds payable 145,000 69,600 Common stock 116,000 116,000 Retained earnings―appropriated 92,800 11,600 Retained earnings―unappropriated 320,160 351,132 Treasury stock, at cost (17,400) (9,280) $823,600 $709,572 For 2021 Year Net income…arrow_forwardABC Inc. reported revenue of P1,980,000 in its income statement for the year ended December 31, 2020, Additional Information are as follows: Dec. 31, 2019 P 415,000 (25,000) P 390,000 Dec. 31, 2020 Accounts Receivable Allowance for Bad Debts P 550,000 (40000) P 510,000 Net Realizable Value No uncollectible accounts were written off during 2020. How much is the cash basis revenue for 2020?arrow_forward
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