Cash Flows from Operating Activities—Indirect Method
The income statement disclosed the following items for year:
| Depreciation expense | $36,900 |
| Gain on disposal of equipment | 21,510 |
| Net income | 222,200 |
The changes in the current asset and liability accounts for the year are as follows:
| Increase (Decrease) |
||
|---|---|---|
| Accounts receivable | $5,740 | |
| Inventory | (3,270) | |
| Prepaid insurance | (1,230) | |
| Accounts payable | (3,890) | |
| Income taxes payable | 1,230 | |
| Dividends payable | 860 |
a. Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.
| Statement of Cash Flows (partial) | ||
| For the year ended xxx | ||
| Cash flows from operating activities: | ||
| Net income | $fill in the blank edc573f62020fa6_2 | |
| Adjustments to reconcile net income to net cash flow from operating activities: | ||
| Depreciation | fill in the blank edc573f62020fa6_4 | |
| Gain on disposal of equipment | fill in the blank edc573f62020fa6_6 | |
| Changes in current operating assets and liabilities: | ||
| Increase in accounts receivable | fill in the blank edc573f62020fa6_8 | |
| Decrease in inventory | fill in the blank edc573f62020fa6_10 | |
| Decrease in prepaid insurance | fill in the blank edc573f62020fa6_12 | |
| Decrease in accounts payable | fill in the blank edc573f62020fa6_14 | |
| Increase in income taxes payable | fill in the blank edc573f62020fa6_16 | |
| Net cash flow from operating activities | $fill in the blank edc573f62020fa6_17 |
Cash Flows from Operating Activities—Indirect Method
The net income reported on the income statement for the current year was $127,200. Depreciation recorded on store equipment for the year amounted to $21,000. 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 | $50,630 | $46,070 | ||
| Accounts receivable (net) | 36,300 | 34,050 | ||
| Inventories | 49,570 | 51,830 | ||
| Prepaid expenses | 5,570 | 4,380 | ||
| Accounts payable (merchandise creditors) | 47,440 | 43,580 | ||
| Wages payable | 25,920 | 28,470 |
a. Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.
| Statement of Cash Flows (partial) | ||
| Cash flows from operating activities: | ||
| Net income | $fill in the blank ec5d5a033f89031_2 | |
| Adjustments to reconcile net income to net cash flow from operating activities: | ||
| Depreciation | fill in the blank ec5d5a033f89031_4 | |
| Changes in current operating assets and liabilities: | ||
| Increase in accounts receivable | fill in the blank ec5d5a033f89031_6 | |
| Decrease in inventories | fill in the blank ec5d5a033f89031_8 | |
| Increase in prepaid expenses | fill in the blank ec5d5a033f89031_10 | |
| Increase in accounts payable | fill in the blank ec5d5a033f89031_12 | |
| Decrease in wages payable | fill in the blank ec5d5a033f89031_14 | |
| Net cash flow from operating activities | $fill in the blank ec5d5a033f89031_15 |
Cash Flows from Operating Activities—Indirect Method
The net income reported on the income statement for the current year was $131,700. Depreciation recorded on store equipment for the year amounted to $21,700. 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 | $51,230 | $47,130 | ||
| Accounts receivable (net) | 36,730 | 34,830 | ||
| Inventories | 50,150 | 53,020 | ||
| Prepaid expenses | 5,640 | 4,480 | ||
| Accounts payable (merchandise creditors) | 48,000 | 44,580 | ||
| Wages payable | 26,230 | 29,130 |
a. Prepare the “Cash flows from operating activities” section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments.
Cash Flows from Operating Activities—Indirect Method
Selected data derived from the income statement and balance sheet of National Beverage Co. for a recent year are as follows:
| Income statement data (in thousands): |
| Net income | $149,774 |
| Loss on disposal of property | (149) |
| Depreciation expense | 13,226 |
| Other items involving noncash expense | 837 |
| Balance sheet data (in thousands): | |
| Increase in accounts receivanle | 13,041 |
| Increase in inventory | 7,565 |
| Increase in prepaid expense | 10,548 |
| Increase in accounts payable and other current liabilities | 17,464 |
a. Prepare the Cash Flows from (used for) Operating Activities section of the statement of cash flows, using the indirect method for National Beverage Co. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments. Enter the amounts in thousands of dollars, as shown above.
| National Beverage Co. |
| Cash Flows from Operating Activities |
| (in thousands) |
| Cash flows from (used for) operating activities: | — |
| Net Income | $ |
| Adjustment to reconcile net income to net cash flows from (used for) operating activities: | — |
| Depreciation expense | $ |
| Loss on disposal of property | $ |
| Other items involving noncash expense | 4 |
| Changes in current operating assests and liabilities: | — |
| Increase in accounts receivable | $ |
| Increase in inventory | $ |
| Increase in prepaid expenses | $ |
| Increase in accounts payable and other current liabilities | $ |
| Net cash flows from operating activities | $ |
b. The company has positive earnings and positive net cash flow from operating activities. The increase in accounts receivable indicates a(n) increase in sales. In addition, the company is using its cash to decrease its accounts payable balance, which indicates that the company is generating enough cash from operations to pay for its inventory in cash . Overall, National Beverage is doing well financially.
Cash flows from operating activities—indirect method
Cash Flows from Operating Activities—Indirect Method
Staley Inc. reported the following data:
| Net income | $461,400 |
| Depreciation expense | 55,200 |
| Loss on disposal of equipment | 40,000 |
| Increase in accounts receivable | 21,800 |
| Increase in accounts payable | 10,500 |
Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.
| Staley Inc. | ||
| Statement of Cash Flows (partial) | ||
| Cash flows from operating activities: | ||
| Net income | $fill in the blank 2 | |
| Adjustments to reconcile net income to net cash flow from operating activities: | ||
| Depreciation | fill in the blank 4 | |
| Loss on disposal of equipment | fill in the blank 6 | |
| Changes in current operating assets and liabilities: | ||
| Increase in accounts receivable | fill in the blank 8 | |
| Increase in accounts payable | fill in the blank 10 | |
| Net cash flow from operating activities | $fill in the blank 11 |
Please help the book I have does a very poor job of explaining how to get from the info below to a no kidding operating cash flow!
The 2010 accounting records of Spaulding Transport reveal these transactions:
Payment of interest $10,000
Cash Sales 48,000
Receipt of dividend revenue 18,000
Payment of income taxes 12,000
Net Income 38,000
Payment for merchandise 105,000
Payment for land 74,000
collection of accounts recievable 192,000
Payment of saleries and wages 53,000
Depreciation expense 16,000
Proceedes from sale vehicles 812,000
Purchase of equipment for cash 22,000
loss on sale of vehicles 3,000
payment of dividends 14,000
payment of operating expenses 28,000
Prepare the cash flows from operating activities section using the direct method (not all othe items will be used)
Timber firewood company reported the following numbers in its 2010 income statement:
EBIT $520,000
Depreciation $35,000
Interest expenses $24,000
General expenses $110,000
If it’s marginal tax rate was 30%, what were Timber’s cash flows from operating activities for 2010?
a.) $347,200
b.) $382,200
c.) $496,000
20,000 Depreciation expense
10,000 Gain on sale of equipment
70,000 Accrual based net income
20,000 begining accounts receivable balance
30,000 ending accounts receivable balance
40,000 beginning accounts payable balance
10,000 ending accounts payable balance
How much is cash flows from operating activities?
Please show how you calculated it.
Bloom Corporation had the following 2010 income statement.
Sales $200,000
Cost of goods sold 120,000
Gross profit 80,000
Operating expense (including depreciation of $21,000) 50,000
Net income $30,000
The following accounts increased during 2011: accounts receivable $12,000; inventory $11,000; accounts payable $13,000. Complete the cash flows from operating activities section of Bloom’s 2011 statement of cash flows using the direct method. (List amounts from largest to smallest eg 10, 5, 3, 2.)
Cash flows from operating activities
$
$
$ $
Net cash provided/used by operating activities $.
Please see pdf file.
Exercise 12-4: Cash flows from operating activities (indirect) L.O. P2
Olhstead Company’s calendar-year 2008 income statement shows the following: Net Income, $374,000;
Depreciation Expense, $44,000; Amortization Expense, $7,200; Gain on Sale of Plant Assets, $6,000. An
examination of the company’s current assets and current liabilities reveals the following changes (all from
operating activities): Accounts Receivable decrease, $17,100; Merchandise Inventory decrease, $42,000;
Prepaid Expenses increase, $4,700; Accounts Payable decrease, $8,200 Other Payables increase, $1,200. Use
the indirect method to compute cash flow from operating activities. (Negative amount should be indicated by
a minus sign. Omit the “$” sign in your response.)
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.
Read moreEach paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.
Read moreThanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.
Read moreYour email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.
Read moreBy sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.
Read more
Recent Comments