INTERMEDIATE ACCOUNTING
10th Edition
ISBN: 9781264559527
Author: SPICELAND
Publisher: MCG
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Chapter 21, Problem 21.11BE
To determine
Statement of cash flows: This statement reports all the cash transactions which are responsible for inflow and outflow of cash, and result of these transactions is reported as ending balance of cash at the end of reported period.
The amount Company SA should report as net cash from operating activities, if it is following the indirect method.
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EB4. LO 16.3 Use the following information from Hamlin Company’s financial statements to determine operating net cash flows (indirect method).
Net Income $113,750
Change in accumulated depreciation (no sale of depreciable assets this year) $9,800
Gain on sale of investments $11,400
Q 23.21:
Last year, Alpha Corporation spent $250,000 to repurchase 15,000 shares of its own outstanding common stock. The company also paid $40,000 in interest on a construction loan that it had obtained from its bank. How should these transactions be reflected on Alpha’s annual statement of cash flows, and why?
A :
The two transactions should be reported in separate sections of the statement because one involves long-term assets while the other involves long-term liability. Specifically, Alpha should record a $250,000 cash outflow in the investing section and a $40,000 cash outflow in the financing section.
B :
The two transactions should be reported in separate sections of the statement because one involves a change in equity while the other involves a change in income. Specifically, Alpha should record a $250,000 cash outflow in the financing section and a $40,000 cash outflow in the operating section.
C :
Both transactions should be reported in the…
Exercise 21-24 (Static) Cash flows from operating activities (indirect method) [LO21-4]
Portions of the financial statements for Myriad Products are provided below:
MYRIAD PRODUCTS COMPANY
Income Statement
For the Year Ended December 31, 2024
($ in millions)
Sales
$ 660
Cost of goods sold
250
Gross margin
410
Salaries expense
$ 110
Depreciation expense
90
Amortization expense
5
Interest expense
20
Loss on sale of land
3
228
Income before taxes
182
Income tax expense
91
Net Income
$ 91
MYRIAD PRODUCTS COMPANY
Selected Accounts from Comparative Balance Sheets
December 31, 2024 and 2023
($ in millions)
Year
Change
2024
2023
Cash
$ 102
$ 100
$ 2
Accounts receivable
220
232
(12)
Inventory
440
450
(10)
Accounts payable
140
134
6
Salaries payable
80
86
(6)
Interest payable
25
20
5
Income tax payable
15
10
5
Required:
Prepare the cash flows from the operating activities section of the statement of cash flows…
Chapter 21 Solutions
INTERMEDIATE ACCOUNTING
Ch. 21 - Effects of all cash flows affect the balances of...Ch. 21 - Prob. 21.2QCh. 21 - Prob. 21.3QCh. 21 - Prob. 21.4QCh. 21 - Prob. 21.5QCh. 21 - Prob. 21.6QCh. 21 - Prob. 21.7QCh. 21 - The sale of stock and the sale of bonds are...Ch. 21 - Does the statement of cash flows report only...Ch. 21 - Prob. 21.10Q
Ch. 21 - Perhaps the most noteworthy item reported on an...Ch. 21 - Prob. 21.12QCh. 21 - Given sales revenue of 200,000, how can it be...Ch. 21 - Prob. 21.14QCh. 21 - When determining the amount of cash paid for...Ch. 21 - Prob. 21.16QCh. 21 - When using the indirect method of determining net...Ch. 21 - Prob. 21.18QCh. 21 - Prob. 21.19QCh. 21 - Where can we find authoritative guidance for the...Ch. 21 - U.S. GAAP designates cash outflows for interest...Ch. 21 - Prob. 21.1BECh. 21 - Prob. 21.2BECh. 21 - Prob. 21.3BECh. 21 - Prob. 21.4BECh. 21 - Investing activities LO215 Carter Containers sold...Ch. 21 - Financing activities LO216 Refer to the situation...Ch. 21 - Prob. 21.11BECh. 21 - Prob. 21.12BECh. 21 - Classification of cash flows LO213 through LO216...Ch. 21 - Indirect method; reconciliation of net income to...Ch. 21 - Prob. 21.29ECh. 21 - Prob. 21.30ECh. 21 - Prob. 21.31ECh. 21 - Prob. 21.32ECh. 21 - Prob. 21.1PCh. 21 - Research Case 219 FASB codification; locate and...Ch. 21 - IFRS Case 2110 Statement of cash flows...
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