ADMS 3531 Lecture Notes - Commercial Paper, Office Supplies, Common Stock

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pucewildebeest131

2 Nov 2012

School

York University

Department

Administrative Studies

Course

ADMS 3531

Professor

Dale Domian

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Document Summary

Ifrs questions are available at the end of this chapter. Net income and net cash flow from operating activities. Converting net income to net cash flow from operating activities. Primary purpose of the statement of cash flows. Answers provided by the statement of cash flows. Cash flow effect of a short-term nontrade note payable. Reporting revenues and expenses on a cash basis. The effect of an inventory increase on cash flows from operating activities. Effect of cash dividend declaration on operating cash flows. Cash flow effects of major repairs on machinery. Answer c c c b d d c b b b d c c b b c b. Test bank for intermediate accounting, thirteenth edition c c. Adjustment to cost of goods sold under the direct method. Answer a a b c c b b d a d c. Events not shown on statement of cash flows. P these questions also appear in the problem-solving survival guide.

Related Questions

Kennedy, Inc. reported the following data:

Net income $127,659
Depreciation expense 16,038
Loss on disposal of equipment 11,080
Gain on sale of building 18,917
Increase in accounts receivable 7,995
Decrease in accounts payable 3,476
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, a decrease in cash, cash payments, or any negative adjustments.

Kennedy, Inc.
Statement of Cash Flow

Cash flows from operating activities:
Net income
$
Adjustments to reconcile net income to net cash flow from operating activities:
Depreciation expense

Loss on disposal of equipment

Gain on sale of building

Changes in current operating assets and liabilities:
Increase in accounts receivable

Decrease in accounts payable

Net cash flow from operating activities

jaderaven672

Cash Flows from Operating ActivitiesâIndirect Method
The net income reported on the income statement for the currentyear was $229,700. Depreciation recorded on equipment and abuilding amounted to $68,700 for the year. Balances of the currentasset and current liability accounts at the beginning and end ofthe year are as follows:
End of Year Beginning of Year
Cash $62,940 $67,350
Accounts receivable (net) 79,810 83,110
Inventories 157,350 143,190
Prepaid expenses 8,750 9,500
Accounts payable (merchandise creditors) 70,300 75,160
Salaries payable 10,130 9,360

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a. Prepare the Cash Flows from Operating Activities section of thestatement of cash flows, using the indirect method. Use the minussign to indicate cash out flows, cash payments, decreases in cashand for any adjustments, if required.

Statement of Cash Flows (partial)

Cash flows from operating activities:

$

Adjustments to reconcile net income to net cash flow from operatingactivities:

Changes in current operating assets and liabilities:

Net cash flow from operating activities
$

b. If the direct method had been used, would the net cash flowfrom operating activities have been the same?

crimsoncod794

The net income reported on the income statement for the currentyear was $364,000. Depreciation recorded on store equipment for theyear amounted to $14,500. Balances of the current asset and currentliability accounts at the beginning and end of the year are asfollows:

	End of Year	Beginning of Year
Cash	$43,210	$38,400
Accounts receivable (net)	31,360	29,020
Merchandise inventory	39,590	45,160
Prepaid expenses	4,740	3,670
Accounts payable (merchandise creditors)	41,480	35,590
Wages payable	21,910	22,970

Required:

Prepare the Cash Flows from Operating Activities section of thestatement of cash flows, using the indirect method. Refer to theAmount Descriptions list provided for the exact wording of theanswer choices for text entries. Use the minus sign to indicatecash outflows, cash payments, decreases in cash and for anyadjustments, if required.

Amount Descriptions

Amortization of intangible assets

Decrease in accounts payable

Decrease in accounts receivable

Decrease in merchandise inventory

Decrease in prepaid expenses

Decrease in wages payable

Depreciation

Increase in accounts payable

Increase in accounts receivable

Increase in merchandise inventory

Increase in prepaid expenses

Increase in wages payable

Net cash flow from operating activities

Net cash flow used for operating activities

Net income

Net loss

A. Prepare the Cash Flows from Operating Activities section ofthe statement of cash flows, using the indirect method. Refer tothe Amount Descriptions list provided for the exact wording of theanswer choices for text entries. Use the minus sign to indicatecash outflows, cash payments, decreases in cash and for anyadjustments, if required.

Statement of Cash Flows (partial)

1	Cash flows from operatinactivities:
2
3	Adjustments to reconcile net income to net cash flow fromoperating activities:
4
5	Changes in current operating assets and liabilities:
6
7
8
9
10
11

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ADMS 3531 Lecture Notes - Commercial Paper, Office Supplies, Common Stock

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