Statement of cash flows—indirect method List the errors you find in the following statement of cash flows. The cash balance at the beginning of the year was $240,000. All other amounts are correct, except the cash balance at the end of the year. Shasta Inc. Statement of Cash Flows For the Year Ended December 31,20Y9 Cash flows from operating activities: Net income........................................... $ 360,000 Adjustments to reconcile net income to net cash flow from operating activities: Depreciation......................................... 100,800 Gain on sale of investments........................... 17,280 Changes in current operating assets and liabilities: Increase in accounts receivable......................... 27,360 Increase in inventories................................. (36,000) Increase in accounts payable........................... (3,600) Decrease in accrued expenses payable................ (2,400) Net cash flow from operating activities............... $ 463,440 Cash flows from investing activities: Cash received from sale of investments................... $ 240,000 Cash paid for purchase of land........................... (259,200) Cash paid for purchase of equipment..................... (432,000) Net cash flow used for investing activities.............. (415,200) Cash flows from financing activities: Cash received from sale of common stock................. $312,000 Cash paid for dividends.................................. 1132,000) Net cash flow from financing activities................. 180,000 Change in cash............................................. $ 47,760 Cash at the end of the year.................................. 192,240 Cash at the beginning of the year............................ $240,000

BuyFind

Corporate Financial Accounting

15th Edition
Carl Warren + 1 other
Publisher: Cengage Learning
ISBN: 9781337398169
BuyFind

Corporate Financial Accounting

15th Edition
Carl Warren + 1 other
Publisher: Cengage Learning
ISBN: 9781337398169

Solutions

Chapter 13, Problem 13.18EX
Textbook Problem

Statement of cash flows—indirect method

List the errors you find in the following statement of cash flows. The cash balance at the beginning of the year was $240,000. All other amounts are correct, except the cash balance at the end of the year.

Shasta Inc.

Statement of Cash Flows

For the Year Ended December 31,20Y9

Cash flows from operating activities:    
Net income........................................... $ 360,000  
Adjustments to reconcile net income to net cash flow from operating activities:    
Depreciation......................................... 100,800  
Gain on sale of investments........................... 17,280  
Changes in current operating assets and liabilities:    
Increase in accounts receivable......................... 27,360  
Increase in inventories................................. (36,000)  
Increase in accounts payable........................... (3,600)  
Decrease in accrued expenses payable................ (2,400)  
Net cash flow from operating activities...............   $ 463,440
Cash flows from investing activities:    
Cash received from sale of investments................... $ 240,000  
Cash paid for purchase of land........................... (259,200)  
Cash paid for purchase of equipment..................... (432,000)  
Net cash flow used for investing activities..............   (415,200)
Cash flows from financing activities:    
Cash received from sale of common stock................. $312,000  
Cash paid for dividends.................................. 1132,000)  
Net cash flow from financing activities.................   180,000
Change in cash.............................................   $ 47,760
Cash at the end of the year..................................   192,240
Cash at the beginning of the year............................   $240,000

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Chapter 13 Solutions

Corporate Financial Accounting
Ch. 13 - Classifying cash flows Identify whether each of...Ch. 13 - Adjustments to net incomeindirect method Ripley...Ch. 13 - Changes in current operating assets and...Ch. 13 - Cash flows from operating activitiesindirect...Ch. 13 - Land transactions on the statement of cash flows...Ch. 13 - Common stock transactions on the statement of cash...Ch. 13 - Free cash flow Dillin Inc. reported the following...Ch. 13 - Appendix 2 Cash received from customersdirect...Ch. 13 - Reporting changes in equipment on statement of...Ch. 13 - Cash flows from operating activitiesnet loss...Ch. 13 - Effect of transactions on cash flows Slate the...Ch. 13 - Classifying cash flows Identify the type of cash...Ch. 13 - Cash flows from operating activitiesindirect...Ch. 13 - Cash flows from operating activitiesindirect...Ch. 13 - Cash flows from operating activitiesindirect...Ch. 13 - Cash flows from operating activitiesindirect...Ch. 13 - Reporting changes in equipment on statement of...Ch. 13 - Reporting changes in equipment on statement of...Ch. 13 - Reporting land transactions on statement of cash...Ch. 13 - Determining cash payments to stockholders The...Ch. 13 - Reporting stockholders' equity items on statement...Ch. 13 - Reporting land acquisition for cash and mortgage...Ch. 13 - Reporting issuance and retirement of long-term...Ch. 13 - Determining net income from net cash flow from...Ch. 13 - Cash flows from operating activitiesindirect...Ch. 13 - Statement of cash flowsindirect method The...Ch. 13 - Statement of cash flowsindirect method List the...Ch. 13 - Cash flows from operating activitiesdirect method...Ch. 13 - Determining selected amounts for cash flows from...Ch. 13 - Cash flows from operating activities direct method...Ch. 13 - Cash flows from operating activitiesdirect method...Ch. 13 - Statement of cash flowsindirect method The...Ch. 13 - Statement of cash flowsindirect method The...Ch. 13 - Statement of cash flowsindirect method The...Ch. 13 - Statement of cash flowsdirect method The...Ch. 13 - Statement of cash flows direct method applied to...Ch. 13 - Statement of cash flowsindirect method The...Ch. 13 - Statement of cash flows indirect method The...Ch. 13 - Statement of cash flowsindirect method The...Ch. 13 - Statement of cash flows direct method The...Ch. 13 - Statement of cash flowsdirect method applied to PR...Ch. 13 - Free Cash Flow Analyze and compare Amazon.com,...Ch. 13 - Analyze and compare Apple, Coca-Cola, and Verizon...Ch. 13 - Analyze Aeropostale Aeropostale, Inc. (AROPQ) is a...Ch. 13 - Analyze and compare ATT and Facebook ATT Inc. (T)...Ch. 13 - Analyze Priceline The Priceline Group Inc. (PCLN)...Ch. 13 - Ethics in Action Head Donuts Inc. is a retailer of...Ch. 13 - Communication Tidewater Inc., a retailer, provided...Ch. 13 - Using the statement of cash flows You are...

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