🏷️ LIMITED TIME OFFER: GET 20% OFF GRADE+ YEARLY SUBSCRIPTION →
Log in
Accounting
1
answer
0
watching
219
views
27 Sep 2018

E12-12 Inferring Balance Sheet Changes from the Cash FlowStatement (Indirect Method) [LO 12-2]

A statement of cash flows contained the followinginformation:

Operating Activities
Net Income $ 14,013
Depreciation 1,027
Changes in CurrentAssets and Current Liabilities
Accounts Receivable (2,142 )
Inventory 596
Accounts Payable 6,307
Accrued Liabilities (1,217 )
Net CashProvided by Operations $ 18,584
Required:

For each of the four current asset and liability accounts listedin the operating activities section of the statement of cash flows,determine whether the following accounts increased or decreasedduring the period:

Watch
1
answer
0
watching
219
views

For unlimited access to Homework Help, a Homework+ subscription is required.

Elin Hessel
Elin HesselLv2
28 Sep 2018

Unlock all answers

Get 1 free homework help answer.
Already have an account? Log in
Share

Related questions

Cash Flows from Operating Activities—Indirect Method
The net income reported on the income statement for the currentyear was $229,700. Depreciation recorded on equipment and abuilding amounted to $68,700 for the year. Balances of the currentasset and current liability accounts at the beginning and end ofthe year are as follows:
End of Year Beginning of Year
Cash $62,940 $67,350
Accounts receivable (net) 79,810 83,110
Inventories 157,350 143,190
Prepaid expenses 8,750 9,500
Accounts payable (merchandise creditors) 70,300 75,160
Salaries payable 10,130 9,360

Hide
a. Prepare the Cash Flows from Operating Activities section of thestatement of cash flows, using the indirect method. Use the minussign to indicate cash out flows, cash payments, decreases in cashand for any adjustments, if required.



Statement of Cash Flows (partial)

Cash flows from operating activities:


$

Adjustments to reconcile net income to net cash flow from operatingactivities:




Changes in current operating assets and liabilities:




















Net cash flow from operating activities
$


b. If the direct method had been used, would the net cash flowfrom operating activities have been the same?

Kennedy, Inc. reported the following data:

Net income $127,659
Depreciation expense 16,038
Loss on disposal of equipment 11,080
Gain on sale of building 18,917
Increase in accounts receivable 7,995
Decrease in accounts payable 3,476
Prepare the cash flows from operating activities section of the statement of cash flows using the indirect method. Use the minus sign to indicate cash outflows, a decrease in cash, cash payments, or any negative adjustments.

Kennedy, Inc.
Statement of Cash Flow

Cash flows from operating activities:
Net income
$
Adjustments to reconcile net income to net cash flow from operating activities:
Depreciation expense

Loss on disposal of equipment

Gain on sale of building

Changes in current operating assets and liabilities:
Increase in accounts receivable

Decrease in accounts payable

Net cash flow from operating activities

Burns Corporation's net income last year was $94,600. Changes in the company's balance sheet accounts for the year appear below: Increases (Decreases) Asset and Contra-Asset Accounts: Cash and cash equivalents $ 24,200 Accounts receivable $ 13,700 Inventory $ (17,300 ) Prepaid expenses $ 4,300 Long-term investments $ 10,600 Property, plant, and equipment $ 71,400 Accumulated depreciation $ 32,600 Liability and Equity Accounts: Accounts payable $ (19,600 ) Accrued liabilities $ 17,400 Income taxes payable $ 4,400 Bonds payable $ (62,400 ) Common stock $ 44,000 Retained earnings $ 90,500 The company did not dispose of any property, plant, and equipment, sell any long-term investments, issue any bonds payable, or repurchase any of its own common stock during the year. The company declared and paid a cash dividend of $4,100. Required: a. Prepare the operating activities section of the company's statement of cash flows for the year. (Use the indirect method.) b. Prepare the investing activities section of the company's statement of cash flows for the year. c. Prepare the financing activities section of the company's statement of cash flows for the year.

Related Documents

ACC 252 Chapter Notes - Chapter 12: Accounts Payable, Accounts Receivable, Common Stock
tealreindeer986
ACC 113 Lecture Notes - Lecture 17: Accounts Payable, Cash Flow, Free Cash Flow
amaranthjellyfish619
ACC 201
Final Exam
Study Guide
ACC 201 Study Guide - Final Guide: Payroll Tax, Petty Cash, Bank Statement
graycrow489

Weekly leaderboard

Home
Homework Help 3,900,000
Accounting 580,000
Start filling in the gaps now
Log in