Homework Answers
1. Cash borrowed from another corporation would be reported in Financing Activities section in the Statement of Cash Flows.
Correct option is c.
2. Depreciation is deducted when calculating cash outflows for operating expenses when using the direct method because depreciation is not an expense we pay cash for.
Correct option is a.
3. A payment of Dividends to the stockholders would be reported in the Investing activities section of the statement of Cash flows.
The given statement is False.
Payment of Dividends to the stockholders is reported under financing activities section of the statement of cash flows.
4. Cash payments for new office furniture would be include in cash flows from investing activities.
Correct option is c.
5. Decrease in Prepaid expenses item would be added to operating expenses when using direct method to calculate cash payments for operating expenses.
Correct option is d.
6.
| Net Income | 210,000 |
| Prepaid expenses increase | -9,000 |
| Inventory decrease | 8,000 |
| Taxes payable decrease | -2,000 |
| Net cash provided by operating activities | $207,000 |
Correct option is a.
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1. Cash borrowed from another corporation would be reported in which section of the Statement of...
5. A purchase of Treasury stock from the stockholders would be reported in the Investing Activities section...
5. A purchase of Treasury stock from the stockholders would be reported in the Investing Activities section of the Statement of Cash Flows. True b. False 6. Jamison Company had Net Income for the year of $210,000. Prepaid Expenses increased by $9,000 during the year, Inventory decreased by $8,000, and Taxes Payable decreased by $2,000. What was the Net Cash Flow from Operating Activities using the Indirect Method (assume that no other account balances changed that would impact the computation). a. $207,000 c. $213,000 b. $211,000 d. $225,000
13. Depreciation on factory equipment would be reported in the statement of cash flows prepared by...
13. Depreciation on factory equipment would be reported in the statement of cash flows prepared by the indirect method in: (a) Cash flows from investing activities section. (b) Cash flows from financing activities section. (c) Schedule of noncash investing and financing activities. (d) Cash flows from operating activities section. 14. Preferred stock issued in exchange for land would be reported in the statement of cash flows in: (a) Cash flows from investing activities section. (b) Cash flows from financing activities...
Cash Flows from Operating Activities—Indirect Method The net income reported on the income statement for the...
Cash Flows from Operating Activities—Indirect Method The net income reported on the income statement for the current year was $139,400. Depreciation recorded on store equipment for the year amounted to $23,000. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year Cash $56,460 $51,940 Accounts receivable (net) 40,480 38,380 Merchandise inventory 55,270 58,430 Prepaid expenses 6,210 4,930 Accounts payable (merchandise creditors) 52,900 49,140 Wages...
WileyPLUS Problem 5-10 a (Indirect Method) The income statement of Tamache Corporation is shown below: TAMACHE CORPOR...
WileyPLUS Problem 5-10 a (Indirect Method)
The income statement of Tamache Corporation is shown below:
TAMACHE CORPORATION
Statement of Income
Year Ended December 31, 2020
Sales revenue
$7,216,000
Cost of goods sold
4,400,000
Gross profit
2,816,000
Operating expenses
$1,469,600
Depreciation expense
70,400
1,540,000
Profit before income tax
$1,276,000
Income tax expense
446,600
Net income
$829,400
Additional information:
1.
Accounts receivable decreased $264,000 during the year.
2.
Prepaid expenses increased $176,000 during the year.
3.
Inventory decreased $352,000 during the year....
Cash Flows from Operating Activities-Indirect Method The net income reported on the income statement for the...
Cash Flows from Operating Activities-Indirect Method The net income reported on the income statement for the current year was $128,100. Depreciation recorded on store equipment for the year amounted to $21,100. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year Cash $51,370 $46,750 Accounts receivable (net) 36,830 34,550 Merchandise inventory 50,290 52,590 Prepaid expenses 5,650 4,440 Accounts payable (merchandise creditors) 48,130 44,230 Wages...
Cash Flows from Operating Activities—Indirect Method The net income reported on the income statement for the...
Cash Flows from Operating Activities—Indirect Method The net income reported on the income statement for the current year was $144,300. Depreciation recorded on store equipment for the year amounted to $23,800. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year Cash $57,140 $52,570 Accounts receivable (net) 40,970 38,850 Inventories 55,940 59,140 Prepaid expenses 6,290 4,990 Accounts payable (merchandise creditors) 53,540 49,730 Wages payable...
41. Depreciation on factory equipment would be reported in the statement of cash flows prepared by...
41. Depreciation on factory equipment would be reported in the statement of cash flows prepared by the indirect method in a. the cash flows from investing activities section. b. a separate schedule. c. the cash flows from operating activities section. d. the cash flows from financing activities section. 42. Which of the following should be added to net income in calculating net cash flow from operating activities using the indirect method? a decrease in accounts receivable preferred dividends declared and...
Cash Flows from Operating Activities-Indirect Method Operating Activities Indirect Method The net income reported on the...
Cash Flows from Operating Activities-Indirect Method Operating Activities Indirect Method The net income reported on the income statement for the current year was $146,300. Depreciation recorded on store equipment for the year amounted to $24,100. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year Cash $56,760 $52,220 Accounts receivable (net) 40,700 38,590 Merchandise inventory 55,570 58,750 6,240 4,960 Prepaid expenses Accounts payable (merchandise...
Cash Flows from Operating Activities-Indirect Method The net income reported on the income statement for the...
Cash Flows from Operating Activities-Indirect Method The net income reported on the income statement for the current year was $128,100. Depreciation recorded on store equipment for the year amounted to $21,100. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year Cash $51,370 $46,750 Accounts receivable (net) 36,830 34,550 Merchandise inventory 50,290 52,590 Prepaid expenses 5,650 4,440 Accounts payable (merchandise creditors) 48,130 44,230 Wages...
Prepare the cash flows from operating activities section of the statement of cash flows for Myriad...
Prepare the cash flows from operating activities section of the
statement of cash flows for Myriad Products Company using the
indirect method.
25 points TIGER ENTERPRISES Statement of Cash Flows For the Year Ended December 31, 2018 (5 in thousands) Cash flows from operating activities Net income Adjustments for noncash effects Depreciation expense Changes in operating assets and abilities Decrease in accounts receivable Increase in inventory Increase in prepaid insurance Decrease in accounts payable Decrease in administrative and other payables...
13. Depreciation on factory equipment would be reported in the statement of cash flows prepared by the indirect method in: (a) Cash flows from investing activities section. (b) Cash flows from financing activities section. (c) Schedule of noncash investing and financing activities. (d) Cash flows from operating activities section. 14. Preferred stock issued in exchange for land would be reported in the statement of cash flows in: (a) Cash flows from investing activities section. (b) Cash flows from financing activities...
WileyPLUS Problem 5-10 a (Indirect Method)
The income statement of Tamache Corporation is shown below:
TAMACHE CORPORATION
Statement of Income
Year Ended December 31, 2020
Sales revenue
$7,216,000
Cost of goods sold
4,400,000
Gross profit
2,816,000
Operating expenses
$1,469,600
Depreciation expense
70,400
1,540,000
Profit before income tax
$1,276,000
Income tax expense
446,600
Net income
$829,400
Additional information:
1.
Accounts receivable decreased $264,000 during the year.
2.
Prepaid expenses increased $176,000 during the year.
3.
Inventory decreased $352,000 during the year....
Cash Flows from Operating Activities-Indirect Method The net income reported on the income statement for the current year was $128,100. Depreciation recorded on store equipment for the year amounted to $21,100. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year Cash $51,370 $46,750 Accounts receivable (net) 36,830 34,550 Merchandise inventory 50,290 52,590 Prepaid expenses 5,650 4,440 Accounts payable (merchandise creditors) 48,130 44,230 Wages...
Cash Flows from Operating Activities-Indirect Method Operating Activities Indirect Method The net income reported on the income statement for the current year was $146,300. Depreciation recorded on store equipment for the year amounted to $24,100. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year Cash $56,760 $52,220 Accounts receivable (net) 40,700 38,590 Merchandise inventory 55,570 58,750 6,240 4,960 Prepaid expenses Accounts payable (merchandise...
Cash Flows from Operating Activities-Indirect Method The net income reported on the income statement for the current year was $128,100. Depreciation recorded on store equipment for the year amounted to $21,100. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year Cash $51,370 $46,750 Accounts receivable (net) 36,830 34,550 Merchandise inventory 50,290 52,590 Prepaid expenses 5,650 4,440 Accounts payable (merchandise creditors) 48,130 44,230 Wages...
Prepare the cash flows from operating activities section of the
statement of cash flows for Myriad Products Company using the
indirect method.
25 points TIGER ENTERPRISES Statement of Cash Flows For the Year Ended December 31, 2018 (5 in thousands) Cash flows from operating activities Net income Adjustments for noncash effects Depreciation expense Changes in operating assets and abilities Decrease in accounts receivable Increase in inventory Increase in prepaid insurance Decrease in accounts payable Decrease in administrative and other payables...
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