(a)
Introduction:
Statements of cash flows are the statements that help in determining how the changes in balance sheet and income statement affect the cash and cash equivalents. Operating activities, investing activities and financing activities are the three activities reported on the statement of
To report:
The amount related to inventory that is deducted by each company on the income statement.
(b)
Introduction:
Statements of cash flows are the statements that help in determining how the changes in balance sheet and income statement affect the cash and cash equivalents. Operating activities, investing activities and financing activities are the three activities reported on the statement of cash flows.
To report:
The amount spent by the company related to inventory purchased with cash and on account.
(c)
Introduction:
Statements of cash flows are the statements that help in determining how the changes in balance sheet and income statement affect the cash and cash equivalents. Operating activities, investing activities and financing activities are the three activities reported on the statement of cash flows.
To report:
The difference between cost of goods sold and total cash paid for inventory.
(d)
Introduction:
Statements of cash flows are the statements that help in determining how the changes in balance sheet and income statement affect the cash and cash equivalents. Operating activities, investing activities and financing activities are the three activities reported on the statement of cash flows.
To report:
The changes in company’s inventory and accounts payable.
(e)
Introduction:
The indirect method helps the company to convert accrual basis of accounting to cash basis by adjusting the net income. It can be done by adding back non-cash expenses such as
To report:
The amount that needs to be added or deducted from net income under indirect method.
(f)
Introduction:
Statements of cash flows are the statements that help in determining how the changes in balance sheet and income statement affect the cash and cash equivalents. Operating activities, investing activities and financing activities are the three activities reported on the statement of cash flows.
To state:
If there is any resemblance between requirement 3 and 5 with reason.
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Connect 1-Semester Access Card for Managerial Accounting
- Which item is added to net income when computing cash flows from operating activities? a. Gain on the disposal of property, plant, and equipment b. Increase in wages payable c. Increase in inventory d. Increase in prepaid rent Use the following information for Multiple-Choice Questions 11-9 and 11-10: Cornett Company reported the following information: cash received from the issuance of common stock, $150,000; cash received from the sale of equipment, $14,800; cash paid to purchase an investment, $20,000; cash paid to retire a note payable, $50,000; and cash collected from sales to customers, $225,000.arrow_forwardCash flows from operating activitiesindirect method The net income reported on the income statement for the current year was 93,700. Depreciation recorded on store equipment for the year amounted to 31,200. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: a. Prepare the Cash flows from operating activities section of the statement of cash flows, using the indirect method. b. Briefly explain why net cash flow from operating activities is different than net income.arrow_forwardSmoltz Company reported the following information for the current year: cost of goods sold, $252,500; increase in inventory, $21,700; and increase in accounts payable, $12,200. What is the amount of cash paid to suppliers that Smoltz would report on its statement of cash flows under the direct method? a. $218,600 c. $262,000 b. $243,000 d. $286,400arrow_forward
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