BuyFindarrow_forward

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773

Solutions

Chapter
Section
BuyFindarrow_forward

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773
Textbook Problem
59 views

Roberts Company provided the following partial comparative balance sheets and the income statement for 20X2.

Chapter 14, Problem 27BEB, Roberts Company provided the following partial comparative balance sheets and the income statement

Required:

Compute operating cash flows using the indirect method.

To determine

Calculate the operating cash flows with the use of indirect method.

Explanation

Cash Flows from Operating Activities:

This category of a cash flow statement shows the operational and profit generating activities in a firm. The operating cash flows increase or decrease the current assets and current liabilities of a firm.

The calculation of operating cash flows using indirect method is shown in table below:

R Company
Cash Flow Statement
Operating Cash Flows:
ParticularsAmount ($)
Net income450,000
Add/ Less: 
    Decrease in accounts receivable183,750
    Decrease in wages payable2(92,500)
    Increase in inventories3(10,000)
    Depreciation expense135,000
    Gain on sale of equipment(50,000)
        Net cash from operating activities516,250

Table (1)

Therefore, net cash flow from operating activities is $516,250.

Working Note:

1.

Calculation of difference in accounts receivable:

(DifferenceinAccountsReceivable)=(AmountofAccountsReceivableof20X2AmountofAccountsReceivableof20X1)=($291,250$375,000)=$83,750

2

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

Is an initial public offering an example of a primary or a secondary market transaction? Explain.

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)