A review of the statement of financial position of Matvei Company revealed the following changes in the account balances:

Required:

1.  For each of the above items, indicate whether it produces a cash inflow or a cash outflow.

a. Increase in accounts receivable Cash inflow Cash outflow b. Increase in retained earnings Cash inflow Cash outflow c. Decrease in salaries payable Cash inflow Cash outflow d. Increase in common shares Cash inflow Cash outflow e. Decrease in inventory Cash inflow Cash outflow f. Increase in accounts payable Cash inflow Cash outflow g. Decrease in long-term debt Cash inflow Cash outflow h. Increase in property, plant, and equipment Cash inflow Cash outflow

2.  Classify each change as a cash flow from operating activities (indirect method), a cash flow from investing activities, or a cash flow from financing activities.

a. Increase in accounts receivable Operating activities Investing activities Financing activities b. Increase in retained earnings Operating activities Investing activities Financing activities c. Decrease in salaries payable Operating activities Investing activities Financing activities d. Increase in common shares Operating activities Investing activities Financing activities e. Decrease in inventory Operating activities Investing activities Financing activities f. Increase in accounts payable Operating activities Investing activities Financing activities g. Decrease in long-term debt Operating activities Investing activities Financing activities h. Increase in property, plant, and equipment Operating activities Investing activities Financing activities

 

Erroneous Statement of Cash Flows

Ryan Company's bookkeeper prepared the following 2016 statement of cash flows:

After a thorough investigation, you have determined that the amounts of the items listed on the statement are correct. However, you notice several items that are incorrectly classified and reported.

Required

Prepare a corrected 2016 statement of cash flows for the Ryan Company. Use the minus sign to indicate cash outflows, a decrease in cash or cash payments.

Operating Activities

________________ __________

Adjustment for non cash income items:

________________ __________

________________ __________

________________ __________

________________ __________

Adjustments for cash flow effects from working capital items:

________________ __________

________________ __________

________________ __________

________________ __________

________________ __________

Net cash provided by operating activities ____________

Investing Activities:

________________ __________

________________ __________

________________ __________

________________ __________

Net cash used for investing activities _________

Financing Activities:

________________ __________

________________ __________

________________ __________

________________ __________

Net cash provided by financing activies _________

Net increase in cash _________

Cash, january 1, 2016 _________

Cash, december 31, 2016 _________

Investing and Financing Activities not Affecting Cash

Investing Activities:

Acquistion of patent by issuing commons stock ______________

Financing Activities:

Issuance of common stock for patent ____________

The comparative balance sheet of Cromme Inc. for December 31,2016 and 2015, is shown as follows:

Question not attempted.

Additional data obtained from an examination of the accounts inthe ledger for 2016 are as follows:

Prepare a statement of cash flows, using the indirect method ofpresenting cash flows from operating activities

The section of the statement of cash flows that reports the cashtransactions affecting the determination of net income.

. Refer to the Labels and Amount Descriptions list provided forthe exact wording of the answer choices for text entries. Be sureto complete the heading of the statement. In the operatingactivities section, use the minus sign to indicate cash outflows,decreases in cash and a net cash outflow, if required. In theinvesting and financing activities section, use a minus sign onlyto indicate a NET cash outflow for the section.

EXERCISE 14-3 Calculating Free Cash Flow (L014-3] Apex Company prepared the statement of cash flows for the current year that is shown below: i $ 40,000 (6,000 34,000 Apex Company Statement of Cash Flows-Indirect Method Operating activities: Net income ................................ Adjustments to convert net income to cash basis: Depreciation ...... $ 22,000 Increase in accounts receivable .......... (60,000) Increase in inventory .... (25,000) Decrease in prepaid expenses .......... 9,000 Increase in accounts payable ............... 55,000 Decrease in accrued liabilities .......... (12,000) Increase in income taxes payable ......... 5,000 Net cash provided by operating activities ......... Investing activities: Proceeds from the sale of equipment ............. 14,000 Loan to Thomas Company ........ (40,000) Additions to plant and equipment ................ (110,000 Net cash used for investing activities ......... Financing activities: Increase in bonds payable .. 90,000 Increase in common stock ........... 40,000 Cash dividends (30,000) Net cash provided by financing activities. Net decrease in cash ..... Beginning cash balance........... Ending cash balance ...................... (136,000) 100,000 (2,000) 27,000 $ 25,000 Required: Compute Apex Company's free cash flow for the current year.