ACC 221 Chapter Notes -Net Income
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Natalie Daniels has completed the basic format to be used inpreparing the statement of cash flows (indirect method) for CPUHardware Designers. All amounts are in thousands (000s). |
CPU HARDWARE DESIGNERS Statement of Cash Flows For the year ended December 31, 2015 | ||
Cash Flows fromOperating Activities | ||
Netincome | ||
Adjustments for noncash effects: | ||
Changesin current assets and current liabilities: | ||
Net cash flows from operatingactivities | ||
Cash Flows fromInvesting Activities | ||
Netcash flows from investing activities | ||
Cash Flows fromFinancing Activities | ||
Net cash flows from financingactivities | ||
Net increase(decrease) in cash | $ | (28,000) |
Cash at thebeginning of the period | 90,000 | |
Cash at the end ofthe period | $ | 62,000 |
Below, in random order, are line items to be included in thestatement of cash flows. |
Cash received fromthe sale of land | $ 4,000 |
Issuance of commonstock | 300,000 |
Depreciationexpense | 30,000 |
Increase in accountsreceivable | 70,000 |
Increase in accountspayable | 11,000 |
Loss on sale ofland | 8,000 |
Purchase ofequipment | 230,000 |
Increase ininventory | 40,000 |
Increase in prepaidrent | 11,000 |
Payment ofdividends | 50,000 |
Net income | 80,000 |
Repayment of notespayable | 60,000 |
Required: |
Prepare the statement of cash flows for CPU Hardware Designersusing the indirect method. (List cash outflows and any decrease in cashas negative amounts. Enter your answers inthousands.) |
CPU HARDWARE DESIGNERS | ||
Statement of Cash Flows | ||
For the Year Ended December 31, 2015 | ||
Cash Flows from Operating Activities: | ||
Adjustments to reconcile net income to net cash flows fromoperating activities | ||
Net cash flows from operating activities | $0 | |
Cash Flows from Investing Activities: | ||
Net cash flows from investing activities | 0 | |
Cash Flows from Financing Activities: | ||
Net cash flows from financing activities | 0 | |
Cash at the beginning of the period | ||
Cash at the end of the period | $0 |
The income statement and a schedule reconciling cash flows from operating activities to net income are provided below for Macrosoft Corporation.
MACROSOFT CORPORATION Income Statement For the Year Ended December 31, 2016 ($ in millions) |
Revenues and gains: | ||||||
Sales | $ | 324.00 | ||||
Gain on sale of cash equivalents | 2.70 | |||||
Gain on sale of investments | 24.70 | $ | 351.40 | |||
Expenses and loss: | ||||||
Cost of goods sold | $ | 127.00 | ||||
Salaries | 40.70 | |||||
Interest expense | 12.70 | |||||
Insurance | 20.70 | |||||
Depreciation | 10.70 | |||||
Patent amortization | 4.70 | |||||
Loss on sale of land | 6.70 | 223.20 | ||||
Income before tax | 128.20 | |||||
Income tax expense | 64.10 | |||||
Net income | $ | 64.10 | ||||
Reconciliation of Net Income to Net Cash Flows from Operating Activities ($ in millions) | |||
Net income | $ | 64.10 | |
Adjustments for noncash effects: | |||
Depreciation expense | 10.70 | ||
Patent amortization expense | 4.70 | ||
Loss on sale of land | 6.70 | ||
Gain on sale of investment | (24.70 | ) | |
Decrease in accounts receivable | 6.70 | ||
Increase in inventory | (12.70 | ) | |
Increase in accounts payable | 18.70 | ||
Decrease in bond discount | 1.70 | ||
Increase in salaries payable | 6.70 | ||
Decrease in prepaid insurance | 4.70 | ||
Increase in income tax payable | 10.70 | ||
Net cash flows from operating activities | $ | 98.00 | |
Required: |
Prepare the cash flows from operating activities section of the statement of cash flows (direct method). (Enter your answers in millions rounded to 2 decimal places (i.e., 5,500,000 should be entered as 5.50). Amounts to be deducted should be indicated with a minus sign.) |