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The net income reported on the income statement for the current year was $80,100. Depreciation recorded on fixed assets and amortization of patents for the year were $10,200 and $2,300, respectively. The company purchased equipment for $85,100 and an acre of land for $49,200. What amount of cash flows from (used for) investing activities is reported on the statement of cash flows?
a. $(41,900)
b. $146,800
c. $(134,300)
d.
$134,300
When preparing its statement of cash flows, Novelty Game Creators, Inc., reported net income of $280,000, a decrease in accounts payable of $39,000, an increase in bonds payable of $98,000, and an increase in depreciation expense of $26,000. The Financing Activities section would show net cash flows of
a. $(98,000).
b. $378,000.
c. $98,000.
d. $404,000.
When preparing its statement of cash flows, Simon Says Games, Inc., reported net income of $89,000, a decrease in accounts receivable of $24,200, an increase in mortgage note payable of $431,000, and an increase in depreciation expense of $25,100. The Financing Activities section of the statement of cash flows would show net cash flows of
a. $431,000.
b. $(342,000).
c. $(341,100).
d. $(431,000).
The cost of merchandise sold during the year was $45,500. Merchandise inventories were $12,700 and $10,800 at the beginning and end of the year, respectively. Accounts payable were $6,100 and $5,200 at the beginning and end of the year, respectively. Using the direct method of reporting cash flows from operating activities, cash payments for merchandise total
a. $42,600.
b. $48,300.
c. $44,500.
d. $47,300.
c. $44,500.
Using the direct method, cash payments for merchandise are computed by taking the cost of merchandise sold plus an increase in merchandise inventory or minus a decrease in merchandise inventory, and plus a decrease in accounts payable or minus an increase in accounts payable. Here, it is $45,500 - $1,900 ($12,700 - $10,800) + $900 ($6,100 - $5,200) = $44,500.
The net income reported on the income statement for the current year was $255,100. Depreciation recorded on fixed assets and amortization of patents for the year were $30,200 and $4,200, respectively. Balances of current asset and current liability accounts at the end and beginning of the year are as follows:
End Beginning
Cash $50,300 $60,200
Accounts receivable 112,200 108,100
Inventories 105,100 93,300
Prepaid expenses 4,600 6,700
Accounts payable (merchandise creditors) 75,300 89,300
What amount of cash flows from (used for) operating activities is reported on the statement of cash flows prepared by the indirect method?
a. $251,800
b.
$317,400
c. $289,600
d. $261,700
d. $261,700
Leave out cash change
An increase in a current asset and a decrease in current liabilities must be deducted from net income, while the opposite is added. Noncash items must be added back to net income. This results in the following: Net Income + Depreciation + Amortization - Increase in Accounts Receivable - Increase in Inventory + Decrease in Prepaid Expenses - Decrease in Accounts Payable = $255,100 + $30,200 + $4,200 - $4,100 - $11,800 + $2,100 - $14,000 = $261,700.
Balances of certain asset accounts at the end and beginning of the year are as follows:
End Beginning
Cash $20,200 $40,300
Land 125,200 75,200
Equipment 87,400 87,300
Accumulated Depreciation 18,300 12,300
What amount of cash flows from (used for) investing activities is reported on the statement of cash flows?
a. $50,100
b. $(87,400)
c.
$(70,300)
d. $(50,100)