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Concept explainers
Statement of
Description | |
Cash receipt from sale of property, plant, and equipment | $ 4,000 |
Cash payment to acquire investment securities | (24,000) |
Cash receipt from issuance of common stock | 4,334 |
Cash receipt from issuance of loan | 5,000 |
P6-10. Statement of Cash Flows, Operating Activities Section. Indirect Method. Repeat the requirements of P6-9 under the indirect method.
P6-9. Statement of Cash Flows, Operating Activities Section, Direct Method. Snail Company provided the following balance sheet and income statement for the current year. Prepare the operating activities section of the cash flow statement using the direct method Accrued expenses relate to Selling, General and Administrative Expenses.
Snail Company Balance Sheet At December 31 | ||
Assets | Ending | Beginning |
Current Assets | ||
Cash | $ 1,000 | $ 5,000 |
Accounts Receivable | 5,500 | 7,000 |
Merchandise Inventory | 4,000 | 1,800 |
Total Current Assets | $10,500 | $13,800 |
Noncurrent Assets | ||
Investments in Bonds | $30,000 | $ 6,000 |
Property, Plant, and Equipment – net | $50,000 | $60,000 |
Total Noncurrent Assets | $80,000 | $66,000 |
Total Assets | $90,500 | $79,800 |
Liabilities | ||
Current Liabilities | ||
Accounts Payable | $ 3,200 | $ 4,400 |
Accrued Expenses | 6,700 | 6,550 |
Income Taxes Payable | 1,500 | 450 |
Total Current Liabilities | $11,400 | $11,400 |
Noncurrent Liabilities | ||
Notes Payable | $35,000 | $30,000 |
Total Noncurrent Liabilities | $35,000 | $30,000 |
Total Liabilities | $46,400 | $41,400 |
Stockholders’ Equity | ||
Common Stock, $1 Par Value | $10,000 | $ 9,000 |
Additional Paid-in Capital | 15,334 | 12,000 |
18,766 | 17,400 | |
Total Stockholders’ Equity | $44,100 | $38,400 |
Total Liabilities and Stockholders’ Equity | $90,500 | $79,800 |
Snail Company Income Statement For the year ended December 31 | |
Sales | $56,000 |
Cost of Goods Sold | 33,600 |
Gross Profit | $22,400 |
Selling, General, and Administrative Expenses | $11,600 |
6,000 | |
Total Operating Expenses | $17,600 |
Income Before Interest and Taxes | $ 4,800 |
Interest Expense | $ (2,100) |
Income Before Tax | $ 2,700 |
Income Tax Expense | (1,334) |
Net Income | $ 1,366 |
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Chapter 6 Solutions
Intermediate Accounting - Myaccountinglab - Pearson Etext Access Card Student Value Edition
- Preparing Net Cash Flows from Operating Activities-Direct Method Colassard Industries has the following data available for preparation of its statement of cash flows: Required: Prepare the cash flows from operating activities section of the statement of cash flows using the direct method.arrow_forwardUse the following cash transactions relating to Warthoff Company to determine the cash flows from operating, using the direct method.arrow_forwardRefer to the information for Cornett Company above. What amount should Cornett report on its statement of cash flows as net cash flows provided by investing activities? a. $(5,200) b. $55,200 c. $144,800 d. None of thesearrow_forward
- List the three operating cash inflows that a company reports under the direct method.arrow_forwardPreparing Net Cash Flows from Operating Activities-Direct Method Refer to the information for Granville Manufacturing Company. Required: Prepare the cash flows from operating activities section of the statement of cash flows using the direct method.arrow_forwardClassification of Cash Flows Patel Company reported the following items in its statement of cash flows presented using the indirect method. a. Issuance of common stock b. Cash paid for interest c. Sold equipment for cash d. Receipt of cash dividend on investment e. Repayment of principal on long-term debt f. Loss on disposal of equipment. Required: Indicate whether each item should be classified as a cash flow from operating activities, a cash flow from investing activities, a cash flow from financing activities. Use the following information for Cornerstone Exercises 11-16 and 11-17: A review of the balance sheet of Peterson Inc. revealed the following changes in the account balances: a. Increase in long-term investment b Increase in accounts receivable c. Increase in common stock d. Increase in long-term debt e. Decrease in accounts payable f. Decrease in supplies inventory g. Increase in prepaid insurance h. Decrease in retained earningsarrow_forward
- Use the following information from Acorn Companys financial statements to determine operating net cash flows (indirect method).arrow_forwardUse the following information from Kentucky Companys financial statements to determine operating net cash flows (indirect method).arrow_forwardUse the following information from Albuquerque Companys financial statements to determine operating net cash flows (indirect method).arrow_forward
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