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Managerial Accounting: The Corners...

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

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BuyFindarrow_forward

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773
Textbook Problem
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Oliver Company provided the following information for the years 20X1 and 20X2:

Chapter 14, Problem 39E, Oliver Company provided the following information for the years 20X1 and 20X2: Required: 1. , example  1

Chapter 14, Problem 39E, Oliver Company provided the following information for the years 20X1 and 20X2: Required: 1. , example  2

Required:

  1. 1. Calculate the change in cash flows that serves as the control figure for the statement of cash flows.
  2. 2. Prepare a schedule that provides operating cash flows for the year 20X2 using the indirect method.
  3. 3. Assume that you have all the information provided for Requirement 1 except that you only know the beginning balance of accounts receivable for 20X2. Given this information and assuming that the operating cash flows for 20X2 are $41,000, calculate the ending balance for accounts receivable.

1.

To determine

Compute the change in cash flows that will serve as the control figure in statement of cash flows.

Explanation

Change in Cash:

The change in cash refers to the amount of difference in the cash inflows and the cash outflows.

Use the following formula to calculate the change in cash flows:

ChangeinCashFlows=(CashBalanceof20X2CashBalanceof

2.

To determine

Construct a schedule providing the operating cash flows for the year 20X2 using the indirect method.

3.

To determine

Compute the ending balance for accounts receivable assuming the operating cash flows for 20X2 as $41,000.

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