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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

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BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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Net Cash Flow from Operating Activities Verna Company’s records provided the following information for 2019:

  1. a. decrease in accounts payable, $4,600
  2. b. loss on sale of land, $1,900
  3. c. increase in inventory, $7,800
  4. d. increase in income taxes payable, $2,700
  5. e. net income, $68,400
  6. f. patent amortization expense, $1,600
  7. g. ordinary loss, $6,200
  8. h. decrease in deferred taxes payable, $2,500
  9. i. amortization of discount on bonds payable, $1,300
  10. j. payment of cash dividends, $24,000
  11. k. depletion expense, $5,000
  12. l. decrease in salaries payable, $1,400
  13. m. decrease in accounts receivable, $3,500
  14. n. gain on sale of equipment, $6,100
  15. o. proceeds from issuance of stock, $57,000
  16. p. ordinary gain, $3,700
  17. q. depreciation expense, $10,000
  18. r. amortization of discount on investment in bonds, $1,500

Required:

Prepare the operating activities section of Verna's 2019 statement of cash flows.

To determine

Prepare the operating activities section of V Company.

Explanation

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. Statement of cash flows includes the changes in cash balance due to operating, investing, and financing activities.

Operating Activities: Operating activities include cash inflows and outflows from business operations.

Prepare the operating activities section of V Company:

V Company
Statement of cash flow(Partial) for the year ended December 31, 2019
ParticularsAmount($)Amount($)
Operating Activities:  
Net income68,400 
Adjustment for non-cash income items:  
Add: Depreciation expenses 10,000 
Patent amortizati...

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