EBK FINANCIAL REPORTING, FINANCIAL STAT
8th Edition
ISBN: 9781337003193
Author: WAHLEN
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Chapter 3, Problem 1HIC
To determine
Explain the difference in amount of
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This is an accounting question about reconciling direct-method cash flow from operations to net income.
I have read that generally for a simple noninventory situation the approach would be something like:
Net Income Plus depreciation Minus Change in Current Assets Plus Change in Current Liabilities --> Should equal cash flows from operations in the cash flow statement.
My question is about purchasing a long-term asset on account. A journal entry is made: credit accounts payable/debit long-term asset. If I generate a cash flow statement, the increase in current liabilities caused by that entry will be a part of the equation above. But that amount is not an operating cash flow, it is an investing cash flow. So my reconciliation to operating activities will be off by that amount.
It seems like there's a missing adjustment in the equation, like "Minus assets purchased on account" or something like that.
Example: Say my company just started and so far only has $5K contibuted cash in the…
Chic Chalk company has charged a depreciation of $500,120 for one of its equipment, on
its income statement. The company is planning for an increase in this depreciation. On the
financial statements of Chic Chalk this will
a. Decrease net cash flow from operations on the cash flow statement.
b. Not impact the cash flow statement
c. Increase in net cash flow from operations on the cash flow statement.
d. No impact the Income statement
How do you find "Cash Payment for Acquisition of Plant Assets"?
Requirement 1. Prepare the
2024
Statement of Cash Flows by the direct method. (Use a minus sign or parentheses for amounts that result in a decrease in cash. If a box is not used in the statement, leave the box empty; do not select a label or enter a zero.)
Complete the statement one section at a time, beginning with the cash flows from operating activities.
Sweet Valley, Inc.
Statement of Cash Flows
Year Ended December 31, 2024
Cash Flows from Operating Activities:
Receipts:
Collections From Customers
$443,700
Interest Received
$8,200
Total Cash Receipts
$451,900
Payments:
To Suppliers
(197,700)
To Employees
(77,400)
For Interest
(21,100)
For Income Tax
(19,400)…
Chapter 3 Solutions
EBK FINANCIAL REPORTING, FINANCIAL STAT
Ch. 3 - Need for a Statement of Cash Flows. The accrual...Ch. 3 - Articulation of the Statement of Cash Flows with...Ch. 3 - Classification of Interest Expense. Under U.S....Ch. 3 - Prob. 4QECh. 3 - Classification of Changes in Short-Term Financing....Ch. 3 - Classification of Cash Flows Related to...Ch. 3 - Treatment of Non-Cash Exchanges. The acquisition...Ch. 3 - Computing Cash Collections from Customers....Ch. 3 - Computing Cash Payments to Suppliers. Lowes...Ch. 3 - Computing Cash Payments for Income Taxes. Visa...
Ch. 3 - Interpreting the Relation between Net Income and...Ch. 3 - Interpreting the Relation between Net Income and...Ch. 3 - Interpreting Relations among Cash Flows from...Ch. 3 - Interpreting Relations among Cash Flows from...Ch. 3 - Interpreting the Statement of Cash Flows. The...Ch. 3 - Interpreting the Statement of Cash Flows. Texas...Ch. 3 - Interpreting the Statement of Cash Flows. Tesla...Ch. 3 - Interpreting the Statement of Cash Flows. Gap Inc....Ch. 3 - Prob. 19PCCh. 3 - Prob. 20PCCh. 3 - Interpreting the Statement of Cash Flows....Ch. 3 - Extracting Performance Trends from the Statement...Ch. 3 - Interpreting a Direct Method Statement of Cash...Ch. 3 - Prob. 24PCCh. 3 - Preparing a Statement of Cash Flows from Balance...Ch. 3 - Prob. 26PCCh. 3 - Preparing a Statement of Cash Flows from Balance...Ch. 3 - Prob. 1AICCh. 3 - Prob. 1BICCh. 3 - Prob. 1CICCh. 3 - Prob. 1DICCh. 3 - Prob. 1EICCh. 3 - Prob. 1FICCh. 3 - Prob. 1GICCh. 3 - Prob. 1HICCh. 3 - Prob. 2AICCh. 3 - Prob. 2BICCh. 3 - Prob. 2CICCh. 3 - Prob. 2DICCh. 3 - Prob. 2EICCh. 3 - Prob. 2FICCh. 3 - Prob. 3IC
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