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EXPANDED STATEMENT OF CASH FLOWS Financial statements for McGinnis Company as well as additional information relevant to cash flows during the period are given below and on the next page. Additional information: 1. Office equipment was sold in 20-2 for $35,000. Additional information on the office equipment sold is provided below. 2. Depreciation expense for the year was $70,000. 3. The following purchases were made for cash: 4. Declared and paid cash dividends of $40,000. 5. Issued 10,000 shares of $10 par common stock for $22 per share. 6. Acquired additional office equipment by issuing a note payable for $8,000. REQUIRED Prepare a statement of cash flows explaining the change in cash and cash equivalents for the year ended December 31, 20-2. STATEMENT OF CASH FLOWS UNDER THE DIRECT METHOD Using the information provided in Problem 23-12B for McGinnis Company, prepare the following: 1. A schedule for the calculation of cash generated from operating activities for McGinnis Company for the year ended December 31, 20-2. 2. A statement of cash flows for McGinnis Company prepared under the direct method for the year ended December 31, 20-2.

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College Accounting, Chapters 1-27 ...

22nd Edition
James A. Heintz + 1 other
Publisher: Cengage Learning
ISBN: 9781305666160

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Chapter
Section
BuyFindarrow_forward

College Accounting, Chapters 1-27 ...

22nd Edition
James A. Heintz + 1 other
Publisher: Cengage Learning
ISBN: 9781305666160
Chapter 23A, Problem 7SPB
Textbook Problem
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EXPANDED STATEMENT OF CASH FLOWS Financial statements for McGinnis Company as well as additional information relevant to cash flows during the period are given below and on the next page.

Chapter 23A, Problem 7SPB, EXPANDED STATEMENT OF CASH FLOWS Financial statements for McGinnis Company as well as additional , example  1

Chapter 23A, Problem 7SPB, EXPANDED STATEMENT OF CASH FLOWS Financial statements for McGinnis Company as well as additional , example  2

Additional information:

1. Office equipment was sold in 20-2 for $35,000. Additional information on the office equipment sold is provided below.

Chapter 23A, Problem 7SPB, EXPANDED STATEMENT OF CASH FLOWS Financial statements for McGinnis Company as well as additional , example  3

2. Depreciation expense for the year was $70,000.

3. The following purchases were made for cash:

Chapter 23A, Problem 7SPB, EXPANDED STATEMENT OF CASH FLOWS Financial statements for McGinnis Company as well as additional , example  4

4. Declared and paid cash dividends of $40,000.

5. Issued 10,000 shares of $10 par common stock for $22 per share.

6. Acquired additional office equipment by issuing a note payable for $8,000.

Chapter 23A, Problem 7SPB, EXPANDED STATEMENT OF CASH FLOWS Financial statements for McGinnis Company as well as additional , example  5

REQUIRED

Prepare a statement of cash flows explaining the change in cash and cash equivalents for the year ended December 31, 20-2.

STATEMENT OF CASH FLOWS UNDER THE DIRECT METHOD Using the information provided in Problem 23-12B for McGinnis Company, prepare the following:

1. A schedule for the calculation of cash generated from operating activities for McGinnis Company for the year ended December 31, 20-2.

2. A statement of cash flows for McGinnis Company prepared under the direct method for the year ended December 31, 20-2.

1.

To determine

Prepare a schedule for the calculation of cash generated from operating activities for M Company for the year ended December 31, 20-2.

Explanation of Solution

Direct method: Under direct method, cash receipts from customers (cash inflows) and cash payments to suppliers (cash outflows) are reported under the operating activities.

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

2.

To determine

Prepare a statement of cash flows for M Company under the direct method for the year ended December 31, 20-2.

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