Using Financial Accounting Information
10th Edition
ISBN: 9781337276337
Author: Porter, Gary A.
Publisher: Cengage Learning,
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Chapter 12, Problem 12.22MCE
To determine
Introduction:The net inflow and outflow of cash and its related equivalents in the business is termed as cash flows and the statement in which this to and fro movement of cash is recorded is termed as cash flow statements.
To indicate:The effect of given transactions on the cash flow statement.
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Use the following information from Dubuque Company's financial statements to prepare the operating activities section of the
statement of cash flows (indirect method) for the year 2018:
2018 Income
Statement
Balance Sheets
Sales
Cost of Goods Sold
Operating Expenses, other than depreciation expense
Depreciation Expense
Gain on Sale of Plant Assets
$ 299,000
(135,000)
(27,000)
(17,000)
16,500
136,500
Net Income
Dec. 31, 2018
$45,300
1,600
22,500
900
Accounts Receivable
Inventory
Accounts Payable
Accrued Liabilities
Accounts Receivable
Inventory
Accounts Payable
Accrued Liabilities
Dec. 31, 2017
$43,400
1,800
21,250
1,150
PLEASE NOTE: Use the account and term names exactly, as shown above and the accounts will be listed in the same order as shown
in the textbook examples. All dollar amounts will be rounded to whole dollars using "$" and commas as needed (i.e. $12,345) and
decreases will be shown with parentheses - $(12,345).
An analysis of the general ledger accounts indicates that delivery equipment, which cost P80,000 and on which accumulated depreciationtotaled 36,000 on the date of sale, was sold for P37,200 during the year. Using this information, indicate the items to be reported on thestatement of cash flows
Using a spreadsheet to prepare the statement of cash flows—indirect method
The 2018 comparative balance sheet and income statement of Attleboro Group, Inc. follow. Attleboro disposed of a plant asset at book value in 2018.
Prepare the spreadsheet for the 2018 statement of cash flows. Format cash flows from operating activities by the indirect method. A plant asset was disposed of for $0. The cost and accumulated depreciation of the disposed asset was $13,600. There were no sales of land, no retirement of common stock, and no treasury stock transactions. Assume plant asset and land acquisitions were for cash.
Chapter 12 Solutions
Using Financial Accounting Information
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- Statement of cash flowsindirect method The comparative balance sheet of Yellow Dog Enterprises Inc. at December 31, 20Y8 and 20Y7, is as follows: Additional data obtained from the income statement and from an examination of the accounts in the ledger for 20Y8 are as follows: a. Net income, 250,000. b. Depreciation reported on the income statement, 135,000. c. Equipment was purchased at a cost of 420,000 and fully depreciated equipment costing 90,000 was discarded, with no salvage realized. d. The mortgage note payable was not due for six years, but the terms permitted earlier payment without penalty. e. 30,000 shares of common stock were issued at 20 for cash. f. Cash dividends declared and paid, 45,000. Instructions Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities.arrow_forwardAnalyzing Cash Flow Effects of Equipment Sale Frontier Company sold equipment on June 30, 2020, for $30,000. The equipment had been depreciated $1,500 for the first six months of 2020, contributing to an accumulated depreciation balance of $10,000 on June 30, 2020. The original cost of the equipment was $50,000. Assuming the indirect method in presenting cash flows from operating activities, indicate any adjustments to net income in the operating activities section and any additions or subtractions in the investing and financing activities sections. • Note: Indicate a subtraction in the cash flow statement with a negative sign in the Amount column. • Note: If an item is not included in the cash flow statement, enter a zero in the Amount column and "N/A" in the Cash Flow Section column. Item Amount Cash Flow Section Depreciation of equipment Loss on sale of equipment Gain on sale of equipment Proceeds from sale of equipment $arrow_forwardUsing the Exhibit below, assume that the depreciation expense on the Income Statement for the year was $38,000. When preparing the Statement of Cash Flow using the indirect method for the current year, which of the following statements would describe the proper presentation of depreciation expense on the Cash flow from operating activities section? EXHIBIT Increase (Decrease) Net Income (loss) $XXX Adjustments to reconcile net income to net cash flow from operating activities: Depreciation of fixed assets XXX Losses on disposal of assets XXX Gains on disposal of assets (XXX) Changes in current operating assets and liabilities:…arrow_forward
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