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Cash flows from operating activities—indirect method The income statement disclosed the following items for the year: Depreciation expense $ 57,600 Gain on disposal of equipment 33,600 Net income 508,000 The changes in the current asset and liability accounts for the year are as follows: Increase (Decrease) Accounts receivable $ 8,960 Inventory (5,120) Prepaid insurance (1,920) Accounts payable (6,080) Income taxes payable 1,410 Dividends payable 2,200 A. Prepare the Clash 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.

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Financial & Managerial Accounting

14th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781337119207
BuyFind

Financial & Managerial Accounting

14th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781337119207

Solutions

Chapter
Section
Chapter 13, Problem 13.7EX
Textbook Problem

Cash flows from operating activities—indirect method

The income statement disclosed the following items for the year:

Depreciation expense $ 57,600
Gain on disposal of equipment 33,600
Net income 508,000

The changes in the current asset and liability accounts for the year are as follows:

Increase

(Decrease)

Accounts receivable $ 8,960
Inventory (5,120)
Prepaid insurance (1,920)
Accounts payable (6,080)
Income taxes payable 1,410
Dividends payable 2,200
  • A. Prepare the Clash 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.

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Chapter 13 Solutions

Financial & Managerial Accounting
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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 - Cash received from customersdirect method Sales...Ch. 13 - Cash payments for merchandisedirect method The...Ch. 13 - Cash flows from operating activitiesnet loss...Ch. 13 - Effect of transactions on cash flows State the...Ch. 13 - Classifying cash flows Identify the type of cash...Ch. 13 - Cash flows from operating activitiesindirect...Ch. 13 - Cash flows from operating activities indirect...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 - Continuing Company AnalysisAmazon, Best Buy, and...Ch. 13 - RadioShack: Free cash flow RadioShack Corporation...Ch. 13 - ATT and Facebook: Free cash flow ATT Inc. is a...Ch. 13 - Priceline: Free cash flow Priceline Group, Inc. is...Ch. 13 - Ethics in Action Head Donuts Inc. is a retailer of...Ch. 13 - Communication Tidewater Inc., a retailer, provided...

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