2 Semester Cengage Now, Warren Accounting
26th Edition
ISBN: 9781305662308
Author: WARREN
Publisher: Cengage
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Chapter 16, Problem 16.3BPE
Changes in current operating assets and liabilities-indirect method
Huluduey Corporation’s comparative balance sheet for current assets and liabilities was as follows:
| Dec. 31, 2016 | Dec. 31, 2015 | |
| Accounts receivable | $18,000 | $14,400 |
| Inventory | 34,800 | 29,700 |
| Accounts payable | 27,600 | 20,700 |
| Dividends payable | 8,400 | 10,800 |
Adjust net income of $160,000 for changes in operating assets and liabilities to arrive at net
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Changes in current operating assets and liabilities-indirect method
Covington Corporation's comparative balance sheet for current assets and liabilities was as follows:
Dec. 31, 2012 Dec. 31, 20Y1
Accounts receivable
Inventory
Accounts payable
Dividends payable
$28,900
57,700
25,300
21,000
$28,500
58,400
24,700
22,000
Adjust net income of $100,400 for changes in operating assets and liabilities to arrive at net cash flows from operating activities.
X
Changes in current operating assets and liabilities-indirect method
Covington Corporation's comparative balance sheet for current assets and liabilities was as follows:
Dec. 31, 2012
Dec. 31, 20Y1
Accounts receivable
$25,400
$24,400
Inventory
59,400
60,100
Accounts payable
17,100
15,600
Dividends payable
19,000
18,000
Adjust net income of $80,500 for changes in operating assets and liabilities to arrive at net cash flows from operating activities.
Operating Activities Section—Indirect Method
The following account balances for the noncash current assets and current liabilities of Suffolk Company are available:
December 31
2017
2016
Accounts receivable
$42,990
$34,940
Inventory
30,020
40,050
Prepaid rent
17,370
14,980
Totals
$90,380
$89,970
Accounts payable
$25,770
$18,760
Income taxes payable
6,210
9,840
Interest payable
15,190
11,520
Totals
$47,170
$40,120
Net income for 2017 is $35,170. Depreciation expense is $20,070. Assume that all sales and all purchases are on account.
Required:
1. Prepare the Operating Activities section of the statement of cash flows using the indirect method. Use the minus sign to indicate cash payments, cash outflows, or decreases in cash.
Suffolk Company
Partial Statement of Cash Flows
For the Year Ended December 31, 2017
Cash Provided by Operating Activities
$
Adjustments to reconcile net income to net cash…
Chapter 16 Solutions
2 Semester Cengage Now, Warren Accounting
Ch. 16 - What is the principal disadvantage of the direct...Ch. 16 - Prob. 2DQCh. 16 - A corporation issued 2,000,000 of common stock in...Ch. 16 - A retail business, using the accrual method of...Ch. 16 - Prob. 5DQCh. 16 - A long-term investment in bonds with a cost of...Ch. 16 - A corporation issued 2,000,000 of 20-year bonds...Ch. 16 - Fully depreciated equipment costing 50,000 is...Ch. 16 - Prob. 9DQCh. 16 - Name five common major classes of operating cash...
Ch. 16 - Prob. 16.1APECh. 16 - Classifying cash flows Identify whether each of...Ch. 16 - Prob. 16.2APECh. 16 - Prob. 16.2BPECh. 16 - Changes in current operating assets and...Ch. 16 - Changes in current operating assets and...Ch. 16 - Prob. 16.4APECh. 16 - Prob. 16.4BPECh. 16 - Prob. 16.5APECh. 16 - Land transactions on the statement of cash flows...Ch. 16 - Prob. 16.6APECh. 16 - Prob. 16.6BPECh. 16 - Cash payments for merchandisedirect method The...Ch. 16 - Cash payments for merchandisedirect method The...Ch. 16 - Free cash flow McMahon Inc. reported the following...Ch. 16 - Prob. 16.8BPECh. 16 - Prob. 16.1EXCh. 16 - Effect of transactions on cash flows State the...Ch. 16 - Prob. 16.3EXCh. 16 - Prob. 16.4EXCh. 16 - Cash flows from operating activities-indirect...Ch. 16 - Prob. 16.6EXCh. 16 - Prob. 16.7EXCh. 16 - Determining cash payments to stockholders The...Ch. 16 - Reporting changes in equipment on statement of...Ch. 16 - Prob. 16.10EXCh. 16 - Reporting land transactions on statement of cash...Ch. 16 - Prob. 16.12EXCh. 16 - Reporting land acquisition for cash and mortgage...Ch. 16 - Reporting issuance and retirement of longterm debt...Ch. 16 - Prob. 16.15EXCh. 16 - Prob. 16.16EXCh. 16 - Prob. 16.17EXCh. 16 - Prob. 16.18EXCh. 16 - Prob. 16.19EXCh. 16 - Prob. 16.20EXCh. 16 - Prob. 16.21EXCh. 16 - Prob. 16.22EXCh. 16 - Cash flows from operating activitiesdirect method....Ch. 16 - Prob. 16.24EXCh. 16 - Free cash flow The financial statement for Nike,...Ch. 16 - Free cash flow Lovato Motors Inc. has cash flows...Ch. 16 - Prob. 16.1APRCh. 16 - Statement of cash flowsindirect method The...Ch. 16 - Prob. 16.3APRCh. 16 - Statement of cash flows-direct method The...Ch. 16 - Prob. 16.5APRCh. 16 - Prob. 16.1BPRCh. 16 - Statement of cash flowsindirect method The...Ch. 16 - Prob. 16.3BPRCh. 16 - Statement of cash flows-direct method The...Ch. 16 - Prob. 16.5BPRCh. 16 - Ethics in Action Lucas Hunter, president of...Ch. 16 - Using the statement of cash flows You are...Ch. 16 - Dillip Lachgar is the president and majority...Ch. 16 - Prob. 16.4CP
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