1. Prepare the operating activities section of the statement of cash flows, using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)
Net Income Increase in Accounts Receivable Decrease in Inventory Increase in Salaries and Wages Payable Dividends paid Net Cash Flow from Operating Activities
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Suppose your company reports $200 of net income and $48 of cash dividends paid, and its comparative balance sheet indicates the following.
Beginning Ending Cash $ 43 $ 243 Accounts Receivable 115 213 Inventory 285 173 Total $ 443 $ 629 Salaries and Wages Payable $ 18 $ 90 Common Stock 140 102 Retained Earnings 285 437 Total $ 443 $ 629
Suppose your company reports $200 of net income and $48 of cash dividends paid, and its comparative balance sheet indicates the following. | |||||||||||||||||||||||||||||||
| Beginning | Ending | |||||
| Cash | $ | 43 | $ | 243 | ||
| Accounts Receivable | 115 | 213 | ||||
| Inventory | 285 | 173 | ||||
| Total | $ | 443 | $ | 629 | ||
| Salaries and Wages Payable | $ | 18 | $ | 90 | ||
| Common Stock | 140 | 102 | ||||
| Retained Earnings | 285 | 437 | ||||
| Total | $ | 443 | $ | 629 | ||
Related questions
Suppose your company sells goods for $390, of which $245 is received in cash and $145 is on account. The goods cost your company $143 and were paid for in a previous period. Your company also recorded salaries and wages of $115, of which only $39 has been paid in cash
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| 1. | Prepare the journal entries to record these transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) | |||||||||||||||||||||||||||||||||||||
| 1 Record the sales revenue of $245 for cash and $145 on account and record the cost of goods sold of $143 using one journal entry. 2 Record the salaries and wages expense of $115 .
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Soft Touch Company was started several years ago by two golf instructors. The companyâs comparative balance sheets and income statement are presented below, along with additional information.
| Current Year | Previous Year | |||||
| Balance Sheet at December 31 | ||||||
| Cash | $ | 13,740 | $ | 8,250 | ||
| Accounts Receivable | 2,400 | 3,600 | ||||
| Equipment | 12,100 | 11,000 | ||||
| Accumulated DepreciationâEquipment | (3,110 | ) | (2,600 | ) | ||
| $ | 25,130 | $ | 20,250 | |||
| Accounts Payable | $ | 1,100 | $ | 2,100 | ||
| Salaries and Wages Payable | 1,040 | 1,550 | ||||
| Note Payable (long-term) | 3,100 | 1,000 | ||||
| Common Stock | 11,000 | 11,000 | ||||
| Retained Earnings | 8,890 | 4,600 | ||||
| $ | 25,130 | $ | 20,250 | |||
| Income Statement | ||||||
| Service Revenue | $ | 75,400 | ||||
| Salaries and Wages Expense | 68,500 | |||||
| Depreciation Expense | 510 | |||||
| Income Tax Expense | 2,100 | |||||
| Net Income | $ | 4,290 | ||||
| Additional Data: |
| a. | Bought new golf clubs using cash, $1,100. |
| b. | Borrowed $2,100 cash from the bank during the year. |
| c. | Accounts Payable includes only purchases of services made on credit for operating purposes. Because there are no liability accounts relating to income tax, assume that Income Tax Expense was fully paid in cash. |
| Required: | |
| 1. | Prepare the statement of cash flows for the current year ended December 31 using the indirect method. (Amounts to be deducted should be indicated with a minus sign.) |