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
1 views

Statement of Cash Flows: Direct Method The following information is for Leer Company:

  1. a. Payments of interest, $5,000
  2. b. Depreciation expense, $22,700
  3. c. Receipt from sale of land, $3,100
  4. d. Payments of income taxes, $6,200
  5. e. Beginning cash balance, $16,500
  6. f. Decrease in receivables, $7,400
  7. g. Interest and dividends collected, $6,300
  8. h. Payments of dividends, $5,200
  9. i. Decrease in accounts payable, $8,600
  10. j. Payments to suppliers and employees, $50,300
  11. k. Receipt from issuance of common stock, $11,000
  12. l. Collections from customers, $61,700
  13. m. Payment for purchase of investments, $17,800
  14. n. Net income, $73,400

Required:

Using the direct method for operating cash flows, prepare Leer’s statement of cash flows.

To determine

Provide a statement of cash flows using the direct method for Company L.

Explanation

Statement of cash flows: Statement of cash flow is a financial statement that shows the cash and cash equivalents of a company for a particular period of time. It shows the net changes in cash, by reporting the sources and uses of cash as a result of operating, investing, and financing activities of a company.

Direct method: This method uses the basis of cash for preparing the cash flows statement. In this direct method, cash flow from operating activities is computed by using all cash receipts and cash payments during the year.

Provide a statement of cash flows using the direct method for Company L.

Company L
Statement of Cash Flows (Direct method)
Year Ended December 31, 2018
ParticularsAmount ($)Amount ($)
Cash flows from operating activities:  
Receipts:  
Collections from customers$61,700  
Interest and dividends collected$6,300  
Total cash receipts $68,000
Payments:  
Payment to...

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

Why should policymakers care about GDP?

Brief Principles of Macroeconomics (MindTap Course List)

Should an economic model describe reality exactly?

Essentials of Economics (MindTap Course List)

Are securities that provide for a sinking fund more or less risky from the bondholders perspective than those w...

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