CONNECT F/ INTERMEDIATE ACCTING>I<
10th Edition
ISBN: 9781260951585
Author: SPICELAND
Publisher: MCG
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Chapter 21, Problem 21.31E
To determine
Statement of
Operating activities: Operating activities refer to the normal activities of a company to carry out the business. The examples for operating activities are purchase of inventory, payment of salary, sales, and others.
Investing activities: Investing activities refer to the activities carried out by a company for acquisition of long term assets. The examples for investing activities are purchase of equipment, long term investment, sale of land, and others.
Financing activities: Financing activities refer to the activities carried out by a company to mobilize funds to carry out the business activities. The examples for financing activities are purchase of bonds, issuance of common shares, and others.
To Prepare: The statement of cash flows of Company R, using indirect method.
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(47) The FASB and IASB prefer the direct method of reporting operating cash flows on the statement of cash flows.
True
False
9) Exercise 21-30 (Static) FASB codification research [LO21-1, 21-4, 21-7]
Access the FASB Accounting Standards Codification at the FASB website (www.fasb.org). Determine the specific eight-digit Codification citation (XXX-XX-XX-X) for accounting for each of the following items:
Disclosure of interest and income tax paid if the indirect method is used.
Primary objectives of a statement of cash flows.
Disclosure of noncash investing and financing activities.
Problem 21-16 (Algo) Statement of cash flows; indirect method [LO21-4, 21-8]
The comparative balance sheets for 2021 and 2020 and the statement of income for 2021 are given below for Dux Company. Additional information from Dux’s accounting records is provided also.
DUX COMPANYComparative Balance SheetsDecember 31, 2021 and 2020($ in thousands)
2021
2020
Assets
Cash
$
117.0
$
34.0
Accounts receivable
62.0
64.0
Less: Allowance for uncollectible accounts
(3.0
)
(2.0
)
Dividends receivable
17.0
16.0
Inventory
69.0
64.0
Long-term investment
29.0
24.0
Land
84.0
40.0
Buildings and equipment
169.0
264.0
Less: Accumulated depreciation
(7.0
)
(120.0
)
$
537.0
$
384.0
Liabilities
Accounts payable
$
27.0
$
34.0
Salaries payable
16.0
19.0
Interest payable
18.0
16.0
Income tax payable…
Chapter 21 Solutions
CONNECT F/ INTERMEDIATE ACCTING>I<
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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- #202 Which of the following is true concerning the statement of cash flows? Question 202 options: a When pension expense exceeds cash funding, the difference is deducted from investing activities on the statement of cash flows. b Under GAAP, the purchase of land by issuing stock will be shown as a cash outflow under investing activities and a cash inflow under financing activities. c The FASB requires companies to classify all income taxes paid as operating cash outflows. d All of these are true concerning the statement of cash flows.arrow_forwardExercise 21-31 (Static) Statement of cash flows; indirect method [LO21-4, 21-5, 21-6, 21-8, Appendix 21A] Comparative balance sheets for 2024 and 2023, a statement of income for 2024, and additional information from the accounting records of Red, Incorporated, are provided below: RED, INCORPORATED Comparative Balance Sheets December 31, 2024 and 2023 ($ in millions) 2024 2023 Assets Cash $ 24 $ 110 Accounts receivable 178 132 Prepaid insurance 7 3 Inventory 285 175 Buildings and equipment 400 350 Less: Accumulated depreciation (119) (240) $ 775 $ 530 Liabilities Accounts payable $ 87 $ 100 Accrued liabilities 6 11 Notes payable 50 0 Bonds payable 160 0 Shareholders’ Equity Common stock 400 400 Retained earnings 72 19 $ 775 $ 530 RED, INCORPORATED Statement of Income For Year Ended December 31, 2024 ($ in millions) Revenues Sales revenue $ 2,000 Expenses Cost of goods sold $ 1,400…arrow_forwardAppendix 2PR 13-4B Statement of cash flows—direct method The comparative balance sheet of Martinez Inc. for December 31, 20Y4 and 20Y3, is as follows:Dec. 31, 20Y4Dec. 31, 20Y3AssetsCash .....................................................$ 661,920$ 683,100Accounts receivable (net) .................................. 992,640 914,400Inventories ...............................................1,394,4001,363,800Investments ..............................................0432,000Land ..................................................... 960,0000Equipment................................................1,224,000 984,000Accumulated depreciation—equipment ....................(481,500)(368,400)Total assets ...............................................$4,751,460$4,008,900Liabilities and Stockholders’ EquityAccounts payable (merchandise creditors) ..................$1,080,000$ 966,600Accrued expenses payable (operating expenses) ............67,80079,200Dividends…arrow_forward
- 5. Which of the given options is correct about reconciled cash balance? a. It is the balance before adding and subtracting the reconciling items b. It is the balance after subtracting the reconciling items c. It is the balance after adding the reconciling items d. It is the balance after adding and subtracting the reconciling itemsarrow_forwardProblem 21-17 (Algo) Statement of cash flows; indirect method [LO21-4, 21-8] Comparative balance sheets for 2021 and 2020 and a statement of income for 2021 are given below for Metagrobolize Industries. Additional information from the accounting records of Metagrobolize also is provided. METAGROBOLIZE INDUSTRIESComparative Balance SheetsDecember 31, 2021 and 2020($ in thousands) 2021 2020 Assets Cash $ 405 $ 245 Accounts receivable 350 190 Inventory 500 275 Land 500 450 Building 900 900 Less: Accumulated depreciation (200 ) (180 ) Equipment 2,500 2,150 Less: Accumulated depreciation (325 ) (300 ) Patent 1,000 1,150 $ 5,630 $ 4,880 Liabilities Accounts payable $ 600 $ 400 Accrued liabilities 150 130 Lease liability—land 130 0 Shareholders' Equity Common stock…arrow_forwardProblem 21-4 (Algo) Statement of cash flows; direct method [LO21-3, 21-8] The comparative balance sheets for 2021 and 2020 and the statement of income for 2021 are given below for Dux Company. Additional information from Dux's accounting records is provided also. DUX COMPANYComparative Balance SheetsDecember 31, 2021 and 2020($ in thousands) 2021 2020 Assets Cash $ 49 $ 24 Accounts receivable 46 53 Less: Allowance for uncollectible accounts (3 ) (2 ) Dividends receivable 3 2 Inventory 65 60 Long-term investment 21 18 Land 85 60 Buildings and equipment 273 290 Less: Accumulated depreciation (70 ) (90 ) $ 469 $ 415 Liabilities Accounts payable $ 35 $ 43 Salaries payable 3 7 Interest payable 7 2 Income tax payable 8 9 Notes payable 25 0 Bonds payable…arrow_forward
- 41. Both the direct and indirect methods require cash flows to be classified according to operating, investing, and financing activities. The difference in presentation between the two methods: a. affects the financing section only. The investing and operating sections do not differ between the two presentations b. affects the operating and investing sections. The financing section does not differ between the two presentations c. affects the investing section only. The operating and financing sections do not differ between the two presentations d. affects the operating section only. The investing and financing sections do not differ between the two presentationsarrow_forwardQ 23.28: When preparing its statement of cash flows, a firm discovers that its accounts receivable balance has decreased over the course of the period. Given this information, which of the following statements is accurate? A : If the firm is using the direct method, this discovery should lead to an upward adjustment when calculating cash receipts for customers. If it is using the indirect method, this discovery should lead to an upward adjustment when calculating cash flow from operating activities. B : If the firm is using the direct method, this discovery should lead to an upward adjustment when calculating cash receipts for customers. If it is using the indirect method, this discovery should lead to a downward adjustment when calculating cash flow from operating activities. C : If the firm is using the direct method, this discovery should lead to a downward adjustment when calculating cash receipts for customers. If it is using the indirect method, this…arrow_forward1. What amount should be reported as Cash and Cash Equivalents? a. 3,548,000 b. 3,423,000 c. 3,523,000 d. 3,448,000 2. How much from the information above should be presented as part of liability? a. Zero b. 200,000 c. 2,175,000 d. 2,200,000arrow_forward
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