Horngren's Financial & Managerial Accounting, Student Value Edition (5th Edition)
5th Edition
ISBN: 9780133851267
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
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Chapter 14, Problem 14.43BP
Requirement 1:
To determine
Statement of cash flows: It is one of the financial statement that shows the cash and cash equivalents of a company for a particular period. It determines the net changes in cash through reporting the sources and uses of cash due to the operating, investing, and financing activities of a company.
Direct method: This method uses the basis of cash for preparing the cash flows statement.
Cash flows from operating activities: In this direct method, cash flow from operating activities is computed by using all cash receipts and cash payments during the year.
Cash Receipts: It encompasses all the cash receipts from sale of goods and on account receivable.
Cash Payments: It encompasses all the cash payments that are made to suppliers of goods and all expenses that are paid.
The below table shows the way of calculation of cash flows from operating activities:
| Cash flows from operating activities (Direct method) |
| Add: Cash receipts. |
| Cash receipt from customer |
| Less: Cash payments: |
| To supplier |
| For operating expenses |
| Income tax expenses |
| Net cash provided from or used by operating activities |
Cash flows from investing activities: Cash provided by or used in investing activities is a section of statement of cash flows. It includes the purchase or sale of equipment or land, or marketable securities, which is used for business operations.
| Cash flows from investing activities |
| Add: Proceeds from sale of fixed assets |
| Sale of marketable securities / investments |
| Interest received |
| Dividend received |
| Deduct: Purchase of fixed assets/long-lived assets |
| Purchase of marketable securities |
| Net cash provided from or used by investing activities |
Cash flows from financing activities: Cash provided by or used in financing activities is a section of statement of cash flows. It includes raising cash from long-term debt or payment of long-term debt, which is used for business operations.
| Cash flows from financing activities |
| Add: Issuance of common stock |
| Proceeds from borrowings |
| Proceeds from issuance of debt |
| Deduct: Payment of dividend |
| Repayment of debt |
| Interest paid |
| Redemption of debt |
| Net cash provided from or used by financing activities |
To Prepare: Single step income statement of ORRC for the year ended December 31, 2016 (using single-step format).
Requirement 2:
To determine
To Prepare: The balance Sheet of ORRC at December 31, 2016.
Requirement 3:
To determine
To Prepare: Statement of cash flows under direct method.
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Boundary Rare Coins (BRC) was formed on January 1, 2018. Additional data for the year follow:
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Chapter 14 Solutions
Horngren's Financial & Managerial Accounting, Student Value Edition (5th Edition)
Ch. 14 - The purposes of the statement of cash flows are to...Ch. 14 - The main categories of cash flow activities are a....Ch. 14 - Operating activities are most closely related to...Ch. 14 - Which item does not appear on a statement of cash...Ch. 14 - Leather Shop earned net income of 57,000 after...Ch. 14 - The Plant Assets account and Accumulated...Ch. 14 - Mountain Water Corp. issued common stock of 28,000...Ch. 14 - Prob. 8QCCh. 14 - Prob. 9AQCCh. 14 - If accrued liabilities increased during the year,...
Ch. 14 - Prob. 1RQCh. 14 - How does the statement of cash flows help users of...Ch. 14 - Describe the three basic types of cash flow...Ch. 14 - What types of transactions are reported in the...Ch. 14 - Prob. 5RQCh. 14 - Prob. 6RQCh. 14 - Explain why depreciation expense, depletion...Ch. 14 - Prob. 8RQCh. 14 - If current assets other than cash increase, what...Ch. 14 - If current liabilities increase, what is the...Ch. 14 - Prob. 11RQCh. 14 - Prob. 12RQCh. 14 - Prob. 13RQCh. 14 - Prob. 14RQCh. 14 - Prob. 15ARQCh. 14 - Prob. 16BRQCh. 14 - Describing the purposes of the statement of cash...Ch. 14 - Prob. 14.2SECh. 14 - Classifying items on the indirect statement of...Ch. 14 - Computing cash flows from operating...Ch. 14 - Prob. 14.5SECh. 14 - Prob. 14.6SECh. 14 - Prob. 14.7SECh. 14 - Prob. 14.8SECh. 14 - Prob. 14.9SECh. 14 - Prob. 14.10SECh. 14 - Preparing a statement of cash flows using the...Ch. 14 - Prob. 14.12SECh. 14 - Preparing the direct method statement of cash...Ch. 14 - Prob. 14.14SECh. 14 - Prob. 14.15SECh. 14 - Classifying cash flow items Consider the following...Ch. 14 - Prob. 14.17ECh. 14 - Prob. 14.18ECh. 14 - Prob. 14.19ECh. 14 - Prob. 14.20ECh. 14 - Prob. 14.21ECh. 14 - Prob. 14.22ECh. 14 - Prob. 14.23ECh. 14 - Prob. 14.24ECh. 14 - Prob. 14.25ECh. 14 - Prob. 14.26ECh. 14 - Prob. 14.27ECh. 14 - Prob. 14.28ECh. 14 - Prob. 14.29ECh. 14 - Prob. 14.30ECh. 14 - Using a spreadsheet to prepare the statement of...Ch. 14 - Prob. 14.32APCh. 14 - Prob. 14.33APCh. 14 - Prob. 14.34APCh. 14 - Prob. 14.35APCh. 14 - Preparing the statement of cash flows----direct...Ch. 14 - Prob. 14.37APCh. 14 - Prob. 14.38APCh. 14 - Prob. 14.39BPCh. 14 - Prob. 14.40BPCh. 14 - Prob. 14.41BPCh. 14 - Prob. 14.42BPCh. 14 - Prob. 14.43BPCh. 14 - Prob. 14.44BPCh. 14 - Using a spreadsheet to prepare the statement of...Ch. 14 - Prob. 14.46CPCh. 14 - Prob. 14.1CTDCCh. 14 - Moss Exports is having a bad year. Net income is...Ch. 14 - Details about a company's cash flows appear in a...
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