Fundamental Accounting Principles
Fundamental Accounting Principles
24th Edition
ISBN: 9781259916960
Author: Wild, John J., Shaw, Ken W.
Publisher: Mcgraw-hill Education,
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Chapter 16, Problem 4APSA
To determine

Concept Introduction:

Cash Flow statement:

The Cash flow statement shows the movement of cash during a particular period. The Cash flows are categorized into three categories as follows:

  • Cash flows from operating activities
  • Cash Flows from investing activities
  • Cash flows from financing activities

(Note: Cash flows from operating activities can be prepared using direct or indirect method)

To Prepare:

The Cash Flow statement using the indirect method and Analysis of changes

Expert Solution & Answer
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Answer to Problem 4APSA

The Cash Flow statement using the indirect method and Analysis of changes is as follows:

    FORTEN COMPANY
    Cash Flow Statements
    Indirect Method
    for the year ended Dec. 31, 2015
    Cash flows from operating activities:
    Net income $ 114,975
    Add: Depreciation Expense $ 20,750
    Add: Loss on Sale of Equipment $ 5,125
    Less: Increase in Accounts receivables $ (15,185)
    Less: Increase in Inventory $ (23,856)
    Add: Decrease in Prepaid Expense $ 625
    Less: Decrease in Accounts Payable $ (61,534)
    Cash provided by operating activities$ 40,900
    Cash Flows from investing activities:
    Cash Proceeds from sale of equipment $ 11,625
    Cash paid for Purchase of Equipment $ (30,000)
    Cash used by investing activities: $(18,375)
    Cash flows from financing activities:
    Cash Receipts from Issuance of Stock (12500+37500) $ 50,000
    Cash Dividends paid $ (50,100)
    Repayment of Long Term Notes Payable $ (50,125)
    Cash Proceeds from Short term notes payable $ 4,000
    Cash used by financing activities: $(46,225)
    Net Cash Flows$(23,700)
    Add: Beginning Balance of Cash $ 73,500
    Ending Balance of Cash $ 49,800

Explanation of Solution

The Cash Flow statement using the indirect method and Analysis of changes is explained as follows:

Fundamental Accounting Principles, Chapter 16, Problem 4APSA

    FORTEN COMPANY
    Cash Flow Statements
    Indirect Method
    for the year ended Dec. 31, 2015
    Cash flows from operating activities:
    Net income $ 114,975
    Add: Depreciation Expense $ 20,750
    Add: Loss on Sale of Equipment $ 5,125
    Less: Increase in Accounts receivables $ (15,185)
    Less: Increase in Inventory $ (23,856)
    Add: Decrease in Prepaid Expense $ 625
    Less: Decrease in Accounts Payable $ (61,534)
    Cash provided by operating activities$ 40,900
    Cash Flows from investing activities:
    Cash Proceeds from sale of equipment $ 11,625
    Cash paid for Purchase of Equipment $ (30,000)
    Cash used by investing activities: $(18,375)
    Cash flows from financing activities:
    Cash Receipts from Issuance of Stock (12500+37500) $ 50,000
    Cash Dividends paid $ (50,100)
    Repayment of Long Term Notes Payable $ (50,125)
    Cash Proceeds from Short term notes payable $ 4,000
    Cash used by financing activities: $(46,225)
    Net Cash Flows$(23,700)
    Add: Beginning Balance of Cash $ 73,500
    Ending Balance of Cash $ 49,800

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Chapter 16 Solutions

Fundamental Accounting Principles

Ch. 16 - Prob. 11DQCh. 16 - Prob. 12DQCh. 16 - Prob. 13DQCh. 16 - Prob. 14DQCh. 16 - Prob. 15DQCh. 16 - Transaction classification by activity C1 Classify...Ch. 16 - Prob. 2QSCh. 16 - QS 16-3 Indirect: Computing cash flows from...Ch. 16 - QS 16-4 Indirect: Computing cash flows from...Ch. 16 - QS 16-5 Indirect: Computing cash flows from...Ch. 16 - QS 16-6 Indirect: Computing cash from operations...Ch. 16 - QS 16-7 Indirect: Computing cash from operations...Ch. 16 - QS 16-8 Computing cash from asset sales P3 The...Ch. 16 - Prob. 9QSCh. 16 - QS 16-10 Computing investing cash flows P3 The...Ch. 16 - QS 16-11 Computing investing cash flows P3 Refer...Ch. 16 - Computing cash flows flow investing P3 Compute...Ch. 16 - QS 16-13 Computing cash from asset sales P3 Q...Ch. 16 - QS 16-14 Computing financing cash flows...Ch. 16 - Prob. 15QSCh. 16 - Prob. 16QSCh. 16 - Prob. 17QSCh. 16 - QS 16-18 Indirect: Preparing statement of cash...Ch. 16 - Ma rice la Yahtzee Cluedu Cash provided (used) by...Ch. 16 - QS 16-20A Recording entries in a spreadsheet P4 A...Ch. 16 - QS 16-21B Direct: Computing cash receipts from...Ch. 16 - QS 16-22B Direct: Computing cash payments to...Ch. 16 - QS 16-23B Direct: Computing cash paid for...Ch. 16 - Prob. 24QSCh. 16 - Prob. 25QSCh. 16 - Prob. 26QSCh. 16 - Prob. 27QSCh. 16 - Prob. 1ECh. 16 - Prob. 2ECh. 16 - Exercise 16-3 Indirect: Reporting and interpreting...Ch. 16 - Exercise 16-4 Indirect: Cash flows from operating...Ch. 16 - Exercise 16-5 Indirect: Cash flows from operating...Ch. 16 - Exercise 16-6 Indirect: Cash flows from operating...Ch. 16 - Exercise 16-7 Indirect: Reporting cash flows from...Ch. 16 - Prob. 8ECh. 16 - Exercise 16-8 Cash flows from financing...Ch. 16 - Exercise 16-10 Reconstructed entries P3 For each...Ch. 16 - Exercise 16-11 Indirect: Preparing statement of...Ch. 16 - Exercise 16-12 Indirect: Preparing statement of...Ch. 16 - Exercise 16-13 Analyzing cash flow on total assets...Ch. 16 - Exercise 16-14A Indirect: Cash flows spreadsheet...Ch. 16 - Exercise 16-14 Direct Cash flow...Ch. 16 - Exercise 16-16BDirect: Computing cash flows P5 For...Ch. 16 - Exercise 16-17B Direct: Preparing statement of...Ch. 16 - Prob. 18ECh. 16 - Prob. 19ECh. 16 - Prob. 20ECh. 16 - Prob. 1APSACh. 16 - Prob. 2APSACh. 16 - Prob. 3APSACh. 16 - Prob. 4APSACh. 16 - Prob. 5APSACh. 16 - Prob. 6APSACh. 16 - Prob. 7APSACh. 16 - Prob. 8APSACh. 16 - Problem 16-1B Indirect Computing cash flows from...Ch. 16 - Prob. 2BPSBCh. 16 - Prob. 3BPSBCh. 16 - Prob. 4BPSBCh. 16 - Prob. 5BPSBCh. 16 - Prob. 6BPSBCh. 16 - Prob. 7BPSBCh. 16 - Problem 16-8BBDirect: Statement of cash flows P5...Ch. 16 - Prob. 16SPCh. 16 - Prob. 1AACh. 16 - Prob. 2AACh. 16 - Prob. 3AACh. 16 - Prob. 1BTNCh. 16 - Prob. 2BTNCh. 16 - BTN 16-3 Access the April 14. 2016. filing of the...Ch. 16 - BTN 16-6 Team members are to coordinate and...Ch. 16 - Prob. 5BTNCh. 16 - Prob. 6BTNCh. 16 - Prob. 7BTN
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