BuyFindarrow_forward

Intermediate Accounting: Reporting...

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

Solutions

Chapter
Section
BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
5 views

Visual Inspection Noble Company’s accounting records provided the following changes in account balances and other information for 2019:

Chapter 21, Problem 3E, Visual Inspection Noble Companys accounting records provided the following changes in account

Additional information: Net income was $9,900. Dividends were declared and paid. Land was sold for $1,700. No land was purchased. A building was purchased for $23,000. No buildings and equipment were sold. Bonds payable were issued at the end of the year. Two hundred shares of stock were issued for $15 per share. The beginning cash balance was $4,800.

Required:

Using visual inspection, prepare a 2019 statement of cash flows for Noble.

To determine

Prepare cash flow statement using visual inspection method for N company.

Explanation

Statement of cash flows: Cash flow statement reports all the cash transactions which are responsible for inflow and outflow of cash. The results of these transactions are 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.

Investing activities: Investing activities include cash inflows and cash outflows from purchase and sale of land, equipment, or investments.

Financing activities: Financing activities includes cash inflows and outflows from issuance of common stock and debt, and payment of debt and dividends.

Visual inspection method: Visual inspection method is a process of reviewing a company’s financial statement and prepares cash flow statement without using a spreadsheet. This method is used when the company’s financial statement is simple and the relationship between changes in accounts can be easily analyzed.

Prepare cash flow statement using visual inspection method:

N Company
Statement of cash flow for the year ended 31st December 2019
ParticularsAmount($)Amount($)
Operating Activities:  
Net income$9,900 
Adjustment for non-cash income items:  
Depreciation expenses4,500 
Adjustments for cash flow effects from working capital items:

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

What are the disadvantages of a partnership?

Foundations of Business (MindTap Course List)

When an account is written off under the allowance method, there should be a debit to Bad Debt Expense.

College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)

DIVIDENDS Bowles Sporting Inc. is prepared to report the following 2014 income statement (shown in thousands of...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

What is meant by catering theory, and how might it impact a firm's dividend policy?

Fundamentals of Financial Management (MindTap Course List)