Intermediate Accounting (2nd Edition)
2nd Edition
ISBN: 9780134730370
Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Publisher: PEARSON
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Question
Chapter 22, Problem 22.2E
To determine
Cash flow from operating activities of HAP under indirect method as per IFRS format.
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Required information
[The following information applies to the questions displayed below.]
The following information pertains to the inventory of Parvin Company during Year 2.
January 1
April 1
700 units @ $31
2,600 units @ $36
900 units @ $39
October 1
Beginning Inventory
Purchased
Purchased
During Year 2, Parvin sold 3,900 units of inventory at $85 per unit and incurred $44,500 of operating expenses.
Parvin currently uses the FIFO method but is considering a change to LIFO. All transactions are cash transactions.
Assume a 40 percent income tax rate. Parvin started the period with cash of $81,000, inventory of $21,700, common
stock of $56,000, and retained earnings of $46,700.
d. Determine the cash flow from operating activities under FIFO and LIFO. (Amounts to be deducted should be indicated with minus
sign.)
Prepare Morganson's statement of cash flows using the indirect method. Include an
accompanying schedule of non-cash investing and financing activities.
P16-34A Preparing the statement of cash flows-indire ct method with
The 2018 income statement and comparative balance shect of Rolling Hills, Inc.
non-cash transactions
follow
ROLLING HILLS, INC.
Income Statement
Year Ended December 31, 2018
Net Sales Revenue
$ 440,000
Cost of Goods Sold
209,200
Gross Profit
230,800
Operating Expenses:
Salaries Expense
$ 77,400
Depreciation Expense-Plant Assets
14,400
Other Operating Expenses
10,200
Total Operating Expenses
102,000
Operating Income
128,800
Other Income and (Expenses):
Interest Revenue
8,700
Interest Expense
(21,100)
Total Other Income and (Expenses)
(12,400)
Net Income Before Income Taxes
116,400
Income Tax Expense
20,000
$ 96,400
Net Income
Using the financial statements and additional information below, prepare a cash flow statement for Papa Ltd for the year ended 31st December 2018 using the indirect method of calculating operating cash flow and write a brief comment on the cash flow for the period.
Papa Ltd
Statement of Profit or Loss Account for the year ended 31st December 2018
GHC
Revenue
540,000
Cost of sales
(155,000)
Gross profit
385,000
Investment income – interest received
15,000
Loss on disposal of equipment
(18,000)
Depreciation
(94,000)
Administrative and selling expenses
(25,000)
Operating profit before interest
263,000
Interest expense
(10,000)
Profit before taxation
253,000
Taxation
(56,000)
Profit after tax
197,000
Statement of financial position as at 31st December
2018
2017
GHC
GHC
Non-current assets
Vehicle at cost
180,000
150,000
Accumulated depreciation
(137,000)…
Chapter 22 Solutions
Intermediate Accounting (2nd Edition)
Ch. 22 - Prob. 22.1QCh. 22 - Prob. 22.2QCh. 22 - Prob. 22.3QCh. 22 - Prob. 22.4QCh. 22 - Prob. 22.5QCh. 22 - How do firms reclassify gains and losses on the...Ch. 22 - Prob. 22.7QCh. 22 - Prob. 22.8QCh. 22 - Prob. 22.9QCh. 22 - Prob. 22.10Q
Ch. 22 - Prob. 22.11QCh. 22 - What approach is used in preparing the operating...Ch. 22 - Under the indirect method, do firms subtract bond...Ch. 22 - Do firms subtract pension expense from net income...Ch. 22 - Prob. 22.15QCh. 22 - Prob. 22.16QCh. 22 - Prob. 22.1MCCh. 22 - Prob. 22.2MCCh. 22 - Big Dollars Corporation's comparative financial...Ch. 22 - Prob. 22.4MCCh. 22 - Prob. 22.5MCCh. 22 - Sykes Corporation's comparative balance sheets at...Ch. 22 - Prob. 22.7MCCh. 22 - Prob. 22.8MCCh. 22 - Prob. 22.1BECh. 22 - Prob. 22.2BECh. 22 - Prob. 22.3BECh. 22 - Prob. 22.4BECh. 22 - Prob. 22.5BECh. 22 - Prob. 22.6BECh. 22 - Prob. 22.7BECh. 22 - Operating Activities Section, Indirect Method,...Ch. 22 - Prob. 22.9BECh. 22 - Prob. 22.10BECh. 22 - Prob. 22.11BECh. 22 - Prob. 22.12BECh. 22 - Prob. 22.13BECh. 22 - Operating Activities Section, Indirect Method,...Ch. 22 - Prob. 22.15BECh. 22 - Prob. 22.16BECh. 22 - Prob. 22.17BECh. 22 - Prob. 22.18BECh. 22 - Prob. 22.19BECh. 22 - Prob. 22.20BECh. 22 - Prob. 22.21BECh. 22 - Prob. 22.22BECh. 22 - Complex Transactions, Acquisitions and...Ch. 22 - Prob. 22.24BECh. 22 - Prob. 22.25BECh. 22 - Complex Transactions, Change in Accounts...Ch. 22 - Prob. 22.1ECh. 22 - Prob. 22.2ECh. 22 - Prob. 22.3ECh. 22 - Prob. 22.4ECh. 22 - Prob. 22.5ECh. 22 - Prob. 22.6ECh. 22 - Statement of Cash Flows, Indirect Method,...Ch. 22 - Prob. 22.8ECh. 22 - Prob. 22.9ECh. 22 - Prob. 22.10ECh. 22 - Statement of Cash Flows, Indirect Method....Ch. 22 - Prob. 22.15ECh. 22 - Prob. 22.16ECh. 22 - Prepare Statement of Cash Flows, Direct Method....Ch. 22 - Prob. 22.2PCh. 22 - Statement of Cash Flows, Indirect Method, Complex...Ch. 22 - Statement of Cash Flows, Indirect Method, Complex...Ch. 22 - Statement of Cash Flows, Indirect Method, Complex...Ch. 22 - Statement of Cash Flows, Indirect Method, Complex...Ch. 22 - Statement of Cash Flows, Indirect Method, Complex...Ch. 22 - Statement of Cash Flows, Indirect Method, Complex...Ch. 22 - Prob. 22.11PCh. 22 - Prob. 22.12PCh. 22 - Prob. 22.13PCh. 22 - Statement of Cash Flows, Direct Method, Complex...Ch. 22 - Prob. 1JCCh. 22 - Prob. 1FSCCh. 22 - Prob. 1SSCCh. 22 - Surfing the Standards Case 2: Cash Flow per Share...Ch. 22 - Basis for Conclusions Cases Basis for Conclusions...Ch. 22 - Basis for Conclusions Case 2: Indirect versus...
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