Chapter 14: Q-14-1RQ (page 758)
Question: What does the statement of cash flows report?
Answer
The statement of cash flows reportscash received and cash utilized for payments.
Over 30 million students worldwide already upgrade their learning with Vaia!
All the tools & learning materials you need for study success - in one app.
Get started for free
Computing operating activities cash flow—indirect method
The accounting records of CD Sales, Inc. include the following accounts: Account Beginning Balance Ending Balance Cash \( 7,500 \) 6,500 Accounts Receivable 21,000 17,500 Merchandise Inventory 20,000 30,000 Accounts Payable 15,000 19,000 Accumulated Depreciation— Equipment
2,000 Depr. Exp.
56,000 Jul. 1
58,000 Jul. 31
Retained Earnings
Dividends 15,000
63,000 Jul. 1
50,000 Net Inc.
98,000 Jul. 31
Compute CD’s net cash provided by (used for) operating activities during July 2018. Use the indirect method.
Question: Owl, Inc.’s accountants have assembled the following data for the year ended December 31, 2018: Cash receipt from sale of equipment \( 20,000
Depreciation expense 12,000
Cash payment of dividends 4,000
Cash receipt from issuance of common stock 12,000
Net income 30,000
Cash purchase of land 25,000
Increase in current liabilities 10,000
Decrease in current assets other than cash 8,000
Prepare Owl’s statement of cash flows using the indirect method for the year ended December 31, 2018. Assume beginning and ending Cash are \)12,000 and $75,000 respectively
Preparing the direct method statement of cash flows Red Toy Company reported the following comparative balance sheet:
Requirements
1. Compute the collections from customers during 2018 for Red Toy Company. Sales Revenue totaled \(134,000.
2. Compute the payments for inventory during 2018. Cost of Goods Sold was \)79,000.
The comparative balance sheet of Jackson Educational Supply at December 31, 2018, reported the following:
| 2018 | 2017 | |
| Current | Assets: | |
| Cash | \( 87,700 | \) 23,500 |
| Accounts Receivable | 15,300 | 22,000 |
| Merchandise Inventory | 62,600 | 60,400 |
| Current | Liabilities: | |
| Accounts Payable | 28,100 | 26,100 |
| Accrued Liabilities | 10,600 | 11,300 |
Jackson’s transactions during 2018 included the following:
Payment of cash dividends \( 16,200
Depreciation expense \) 16,700
Purchase of equipment with cash 54,700
Purchase of building with cash 98,000
Issuance of long-term notes payable to borrow cash 48,000
Net income 57,600
Issuance of common stock for cash 105,000
Requirements
Question: Muench, Inc.’s accountant has partially completed the spreadsheet for the statement of cash flows. Fill in the remaining missing information.
What do you think about this solution?
We value your feedback to improve our textbook solutions.
