FINANCIAL ACCOUNTING>IC<
15th Edition
ISBN: 9781119344988
Author: Kimmel
Publisher: WILEY C
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Question
Chapter 12, Problem 12.5BE
To determine
Cash flows from operating activities: These refer to the cash received or cash paid in day-to-day operating activities of a company.
Indirect method: Under this method, the following amounts are to be adjusted from the Net Income to calculate the net cash provided from operating activities.
- Deduct increase in current assets.
- Deduct decrease in current liabilities.
- Add decrease in current assets.
- Add the increase in current liability.
- Add
depreciation expense and amortization expense. - Add loss on sale of plant assets.
- Less gain on sale of plant assets.
To Compute: Net cash provided by operating activities using indirect method.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
The net income for Lodi Co. for 2012 was $270,000. For 2012, depreciation on plant assets was $50,000, and the company incurred a gain on sale of plant assets of $12,000. Compute net cash provided by operating activities under the indirect method.
The net income for Adcock Co. for 2011 was $280000. For 2011, depreciation on plant asset was $70000, and the company incurred a loss on sale of plant asset of $12000. Compute net cash provided by operating activities under the indirect method?
The net income for Sunland Co. for 2022 was $282,900. For 2022, depreciation on plant assets was $68,300, and the company incurred a loss on disposal of plant assets of $27,600.Compute net cash provided by operating activities under the indirect method, assuming there were no other changes in the company’s accounts.
Chapter 12 Solutions
FINANCIAL ACCOUNTING>IC<
Ch. 12 - Prob. 1QCh. 12 - Prob. 2QCh. 12 - Prob. 3QCh. 12 - Prob. 4QCh. 12 - Prob. 5QCh. 12 - Prob. 6QCh. 12 - Why is it necessary to use comparative balance...Ch. 12 - Prob. 8QCh. 12 - Prob. 9QCh. 12 - Prob. 10Q
Ch. 12 - Prob. 11QCh. 12 - Prob. 12QCh. 12 - Prob. 13QCh. 12 - Prob. 14QCh. 12 - Prob. 15QCh. 12 - Prob. 16QCh. 12 - Prob. 17QCh. 12 - Prob. 18QCh. 12 - Prob. 19QCh. 12 - Prob. 20QCh. 12 - Prob. 21QCh. 12 - Prob. 22QCh. 12 - Prob. 12.1BECh. 12 - Prob. 12.2BECh. 12 - Prob. 12.3BECh. 12 - Prob. 12.4BECh. 12 - Prob. 12.5BECh. 12 - Prob. 12.7BECh. 12 - Prob. 12.8BECh. 12 - Prob. 12.9BECh. 12 - Prob. 12.10BECh. 12 - Prob. 12.11BECh. 12 - The management of Uhuru Inc. is trying to decide...Ch. 12 - Prob. 12.13BECh. 12 - Prob. 12.14BECh. 12 - Prob. 12.15BECh. 12 - Prob. 12.1DIECh. 12 - Prob. 12.2ADIECh. 12 - Prob. 12.2BDIECh. 12 - Prob. 12.3DIECh. 12 - Prob. 12.1ECh. 12 - Prob. 12.2ECh. 12 - Prob. 12.3ECh. 12 - Prob. 12.4ECh. 12 - Prob. 12.5ECh. 12 - Prob. 12.6ECh. 12 - Prob. 12.7ECh. 12 - Prob. 12.8ECh. 12 - Prob. 12.9ECh. 12 - Prob. 12.10ECh. 12 - Prob. 12.11ECh. 12 - Prob. 12.12ECh. 12 - Prob. 12.13ECh. 12 - Prob. 12.14ECh. 12 - Prob. 12.15ECh. 12 - Prob. 12.1APCh. 12 - Prob. 12.2APCh. 12 - Prob. 12.3APCh. 12 - Prob. 12.4APCh. 12 - Prob. 12.5APCh. 12 - Prob. 12.6APCh. 12 - Prob. 12.7APCh. 12 - Prob. 12.8APCh. 12 - Prob. 12.9APCh. 12 - Prob. 12.10APCh. 12 - Prob. 12.11APCh. 12 - Prob. 12.12APCh. 12 - Prob. 12.1EYCTCh. 12 - Prob. 12.2EYCTCh. 12 - Prob. 12.3EYCTCh. 12 - Prob. 12.7EYCTCh. 12 - Prob. 12.8EYCTCh. 12 - Prob. 12.9EYCTCh. 12 - Prob. 12.1IFRSCh. 12 - Prob. 12.2IFRSCh. 12 - Prob. 12.3IFRS
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Broussard Company reported net income of $3.5 millionin 2017. Depreciation for the year was $520,000, accountsreceivable increased $500,000, and accounts payableincreased $300,000. Compute net cash flow from operatingactivities using the indirect method.arrow_forwardThe net income for Fallon Company for 2017 was $320,000.During 2017, depreciation on plant assets was $124,000,amortization of patent was $40,000, and the companyincurred a loss on sale of plant assets of $21,000. Computenet cash flow from operating activities.arrow_forwardBracewell Company reported a net income of $190,860 for 2014. Bracewell also reported a depreciation expense of $49,030 and a gain of $4,840 on the disposal of plant assets. The comparative balance sheet shows an increase in accounts receivable of $13,740 for the year, a $17,100 increase in accounts payable, and a $4,910 decrease in prepaid expenses. Prepare the operating activities section of the statement of cash flows for 2014. Use the indirect method.arrow_forward
- On its January 1, 2016, balance sheet, Calvin Company reported equipment of $60,000 and accumulated depreciation of $20,000. During 2016, Calvin sold equipment with an original cost of $5,000. Selected information from Calvin's 2016 statement of cash flows follows: Net income $20,000 Depreciation expense on equipment 2,000 Gain on sale of equipment 600 Proceeds from sale of equipment 1,500 Purchase of equipment 18,000 Required:Compute the amount of equipment and accumulated depreciation that should appear on Calvin's December 31, 2016, balance sheet.arrow_forwardSalvador, Inc. reported a net income of $2.5 million in 2008. Depreciation for the year was $260,000, accounts receivable decreased $350,000, and accounts payable decreased $280,000. Compute the net cash provided by operating activities using the indirect approach.arrow_forwardAtkins Corporation has provided the following information for the year ended December 31, 2019:• The equipment account balance increased $200,000.• The equipment accumulated depreciation account increased $35,000.• Equipment costing $50,000 was sold during the year resulting in a $10,000 gain.• Depreciation expense on the equipment recorded during the year was $65,000. Which of the following statements is incorrect with respect to preparation of the statement of cash flows? Assume that the equipment purchase and sale resulted in cash flows. A. A $60,000 cash inflow is reported from the equipment sale. B. Using the indirect method, net income is increased by the $65,000 depreciation expense. C. Using the indirect method, net income is decreased by the $10,000 gain on the sale of the equipment. D. A $30,000 cash inflow is reported from the equipment sale.arrow_forward
- 42.During 2018, a team was sold for $ 39,000. The equipment had originally been purchased for $ 64,000 and had a book value of $ 36,000 at the time of sale. The balance of the Accumulated Depreciation account as of December 31, 2017 was $ 172,000 and as of December 31, 2018 it was $ 184,000. Determine the depreciation adjustment to be made to net income if the Indirect Method is used to report operating activities in the Statement of Cash Flows. Select one: a. $ 40,000. b. $ 76,000. c. $ 48,000. d. $ 28,000.arrow_forwardIn 2017, Wild Corporation reported a net loss of $70,000. Wild’s only net income adjustments were depreciation expense $81,000, and increase in accounts receivable $8,100. Compute Wild’s net cash provided (used) by operating activities.arrow_forwardAccording to the images, answer the following questions: 1. During the year ended March 11th, 2017, how much did Sainsbury’s receive in cash due to sales of plant, property and equipment? a) 55 b) 314 c) 634 d) 466 e) None of the Above 2. During the year ended March 11th, 2017, how much net cash flow did Sainsbury’s generate from operating activities (including interest and taxes paid)? a) (63) b) 1,077 c) 1,323 d) 1,153 e) None of the above 3. In which part of the Statement of Cash Flows does Sainsbury’s classify interest received and dividend received? a) Cash Flows from Operations b) Cash Flows from Investing c) Cash Flows from Financing d) Not classified 4. What amount of long–term borrowings did Sainsbury’s repay during the year? You can ignore capital leases a) 492 b) 130 c) 466 d) 448 e) None of the above 5. What is the difference between the Net profit for the financial year and “Net cash generated from operating activities (CFO)”? a) Net profit is 776 greater than CFO b) Net…arrow_forward
- SOL Company reported net income for 2016 in the amount of $200,000. The company’s financial statements also included the following: Increase in accounts receivable $ 40,000 Decrease in inventory 30,000 Increase in accounts payable 100,000 Depreciation expense 52,000 Gain on sale of land 74,000 What is net cash provided by operating activities under the indirect method? a. $216,000 b. $268,000 c. $290,000 d. $416,000arrow_forwardMazaya company reported net income of $90,000 for the year ended December 31,2011. During the year, inventories decreased by $12,000, accounts payable decreased by $18,000, depreciation expenses was $20,000 and a loss on disposal of equipment of $3,000 was recorded. Net cash provided by operating activities in 2011 using the indirect method was?arrow_forwardOriole, Inc. reported net income of $2.60 million in 2022. Depreciation for the year was $166,400, accounts receivable decreased $364,000, and accounts payable decreased $291,200.Compute net cash provided by operating activities using the indirect methodarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Financial AccountingAccountingISBN:9781305088436Author:Carl Warren, Jim Reeve, Jonathan DuchacPublisher:Cengage Learning
Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage Learning
Financial Accounting
Accounting
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Cengage Learning
Financial Accounting: The Impact on Decision Make...
Accounting
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Cengage Learning
The KEY to Understanding Financial Statements; Author: Accounting Stuff;https://www.youtube.com/watch?v=_F6a0ddbjtI;License: Standard Youtube License