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Intermediate Accounting: Reporting...

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

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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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Smith Company provided the following information on selected transactions for 2019:

Chapter 21, Problem 8MC, Smith Company provided the following information on selected transactions for 2019: What is the net

What is the net increase in cash for the year ended December 31, 2019, as a result of the preceding information?

  1. a. $32,500,000
  2. b. $25,700,000
  3. c. $16,500,000
  4. d. $12,500,000

To determine

Calculate S company’s net increase in cash for the year ended December 31, 2019.

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.

Justification for the correct answer:

Calculate S company’s net increase in cash for the year ended December 31, 2019.

S company
Statement of cash flows for the year ended December 31,2019
ParticularsAmount($)Amount($)
Operating Activities:  
Net income20,000,000 
Adjustments for non-cash income items:  
Depreciation expenses500,000 
Adjustments for cash flow effects from working capital:  

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