Determining Operating Cash Flows-Direct MethodAdjusted trial balances for Garboz Company, an industrial recycler, at December 31 of the current and prior year follow.Debits, December 31Current Year Prior YearCash$14,000$12,800Accounts receivable13,20012,000Inventory12,40018,800Property, plant, and equipment40,00038,000Discount on bonds payable1,8002,000Cost of goods sold100,000152,000Selling expenses56,60068,800General and administrative expenses54,80060,520Interest expense1,7201,040Income tax expense8,16024,480Total debits$302,680 $390,440Credits, December 31Current Year Prior YearAllowance for doubtful accounts$ 520$ 440Accumulated depreciation6,6006,000Trade accounts payable10,0007,000Income taxes payable8,40010,840Deferred income tax liability2,1201,840Callable bonds payable, 8%18,0008,000Common stock20,00016,000Additional paid-in capital3,6403,000Retained earnings17,88025,840SalesTotal credits215,520 311,480$302,680 $390,440

From the given trial balances, we can identify the relevant information needed to calculate the…

Answered: Determining Operating Cash Flows-Direct…

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter13: Statement Of Cash Flows

Section: Chapter Questions

Problem 20E

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COMPUTE CASH PROVIDED BY OPERATING ACTIVITIES Powell Companys condensed income statement for the year ended December 31, 20-2, was as follows: Additional information obtained from Powells comparative balance sheet and auxiliary records as of December 31, 20-2 and 20-1, was as follows: Depreciation expense for 20-2, included in operating expenses on the income statement, was 29,000. REQUIRED Prepare a partial statement of cash flows reporting cash provided by operating activities for the year ended December 31, 20-2.
Which item is added to net income when computing cash flows from operating activities? a. Gain on the disposal of property, plant, and equipment b. Increase in wages payable c. Increase in inventory d. Increase in prepaid rent Use the following information for Multiple-Choice Questions 11-9 and 11-10: Cornett Company reported the following information: cash received from the issuance of common stock, $150,000; cash received from the sale of equipment, $14,800; cash paid to purchase an investment, $20,000; cash paid to retire a note payable, $50,000; and cash collected from sales to customers, $225,000.
COMPUTE CASH PROVIDED BY OPERATING ACTIVITIES Horn Companys condensed income statement for the year ended December 31, 20-2, was as follows: Additional information obtained from Horns comparative balance sheet and auxiliary records as of December 31, 20-2 and 20-1, was as follows: Depreciation expense for 20-2, included in operating expenses on the income statement, was 32,000. REQUIRED Prepare a partial statement of cash flows reporting cash provided by operating activities for the year ended December 31, 20-2.
COMPUTE CASH PROVIDED BY OPERATING ACTIVITIES Horn Companys condensed income statement for the year ended December 31, 20-2, was as follows: Additional information obtained from Horns comparative balance sheet and auxiliary records as of December 31, 20-2 and 20-1, was as follows: Depreciation expense for 20-2, included in operating expenses on the income statement, was 32,000. REQUIRED Prepare a partial statement of cash flows reporting cash provided by operating activities for the year ended December 31, 20-2. SCHEDULE FOR CALCULATION OF CASH GENERATED FROM OPERATING ACTIVITIES Using the information provided in Problem 23-9A for Horn Company, prepare the following: 1. A schedule for the calculation of cash generated from operating activities for Horn Company for the year ended December 31, 20-2. 2. A partial statement of cash flows for Horn Company reporting cash from operating activities under the direct method for the year ended December 31, 20-2.
COMPUTE CASH PROVIDED BY OPERATING ACTIVITIES Powell Companys condensed income statement for the year ended December 31, 20-2, was as follows: Additional information obtained from Horns comparative balance sheet and auxiliary records as of December 31, 20-2 and 20-1, was as follows: Depreciation expense for 20-2, included in operating expenses on the income statement, was 32,000. REQUIRED Prepare a partial statement of cash flows reporting cash provided by operating activities for the year ended December 31, 20-2. SCHEDULE FOR CALCULATION OF CASH GENERATED FROM OPERATING ACTIVITIES Using the information provided in Problem 23-11B for Powell Company, prepare the following: 1. A schedule for the calculation of cash generated from operating activities for Powell Company for the year ended December 31, 20-2. 2. A partial statement of cash flows for Powell Company reporting cash from operating activities under the direct method for the year ended December 31, 20-2.
Cash flows from operating activities-indirect methodThe net income reported on the income statement for the current yearwas $93,700. Depreciation recorded on store equipment for the yearamounted to $31,200. Balances of the current asset and current liabilityaccounts at the beginning and end of the year are as follows: End of Year Beginning of Year CashAccounts receivable (net)InventoriesPrepaid expensesAccounts payable (merchandise creditors)Wages payable $24,10065,00047,2003,25023,4005,300 $19,70056,00050,0008,00017,2006,400 a. Prepare the "Cash flows from operating activities" section of thestatement of cash flows, using the indirect methodb. Briefly explain why net cash flow from operating activities isdifferent than net income.
Cash Flows from Operating Activities-Indirect Method The net income reported on the income statement for the current year was $154,900. Depreciation recorded on store equipment for the year amounted to $25,600. 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 $60,720 $55,860 Accounts receivable (net) 43,540 41,280 Inventories 59,440 62,840 Prepaid expenses 6,680 5,310 Accounts payable (merchandise creditors) 56,890 52,840 Wages payable 31,090 34,520 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.
Determining Operating Cash Flows—Direct Method Adjusted trial balances for Garboz Company, an industrial recycler, at December 31, 2020, and 2019, follow. Debits, December 31 2020 2019 Cash $31,500 $28,800 Accounts receivable 29,700 27,000 Inventory 27,900 43,200 Property, plant, and equipment 90,000 85,500 Discount on bonds payable 4,050 4,500 Cost of goods sold 225,000 342,000 Selling expenses 127,350 154,800 General and administrative expenses 123,300 136,170 Interest expense 3,870 2,340 Income tax expense 18,360 55,080 Total debits $681,030 $878,490 Credits, December 31 2020 2019 Allowance for doubtful accounts $ 1,170 $ 990 Accumulated depreciation 14,850 13,500 Trade accounts payable 22,500 15,750 Income taxes payable 18,900 24,390 Deferred income tax liability 4,770 4,140 Callable bonds payable, 8% 40,500 18,000 Common stock 45,000 36,000 Additional paid-in capital 8,190 6,750 Retained earnings 40,230 58,140 Sales 484,920…
Determining Operating Cash Flows-Direct Method Adjusted trial balances for Garboz Company, an industrial recycler, at December 31, 2020, and 2019, follow. Debits, December 31 2020 2019 Cash $42.000 $38,400 Accounts receivable 39,600 36.000 Inventory 37.200 56,400 Property. plant, and equipment 120,000 114,000 Discount on bonds payable 5,400 6,000 Cost of goods sold 300,000 456.000 Selling expenses 169,800 206,400 General and administrative expenses 164,400 181,560 Interest expense 5,160 3,120 Income tax expense 24,480 73,440 Total debits $908,040 $1,171,320 Credits, December 31 2020 2019 Allowance for doubtful accounts $ 1,560 $ 1,320 Accumulated depreciation 19,800 18,000 Trade accounts payable 30,000 21,000 Income taxes payable 25,200 32,520 Deferred income tax liability 6,360 5,520 Callable bonds payable, 8% 54,000 24,000 Common stock 60,000 48,000 Additional paid-in capital 10,920 9,000 Retained earnings 53,640 77,520 Sales 646,560 934,440 Total credits 5908,040 $1,171,320…
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 The net income reported on the income statement for the current year was $154,100. Depreciation recorded on store equipment for the year amounted to $25,400. 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 $58,560 $53,290 Accounts receivable (net) 41,990 39,380 Inventories 57,330 59,950 Prepaid expenses 6,440 5,060 Accounts payable (merchandise creditors) 54,870 50,410 Wages payable 29,980 32,930 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. Statement of Cash Flows (partial) Cash flows from operating activities: Net income Adjustments to reconcile net income to net cash flow…
Cash Flows from Operating Activities-Indirect Method The net income reported on the income statement for the current year was $147,000. Depreciation recorded on store equipment for the y amounted to $24,300. 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 $59,090 $53,770 Cash Accounts receivable (net) 42,370 39,740 57,850 60,490 Inventories 6,500 5,110 Prepaid expenses 55,370 50,870 Accounts payable (merchandise creditors) 30,250 33,230 Wages payable a. Prepare the "Cash flows from operating activities" section of the statement of cash flows, using the indirect method. Use the minus sigr indicate cash outflows, cash payments, decreases in cash, or any negative adjustments.

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