ACCT 2102 Chapter Notes - Chapter 13: Financial Statement, Cash Flow, Current Asset

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jaderaccoon449

30 Mar 2018

School

University of Georgia

Department

Accounting

Course

ACCT 2102

Professor

Farmer

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Document Summary

In this chapter, we will discuss the preparation and interpretation of the statement of cash flows. The statement of cash flows is one of the four basic financial statements prepared by companies. The statement readily provides information about how cash is generated and used during the period, in addition to reporting the overall increase or decrease in cash during the period. Three types of activities that generate and use cash. The statement of cash flows categorizes cash transactions into one of three activities. The operating activities section consists of transactions that affect net income. This section can be prepared using one of two methods: the direct method or the indirect method. The total cash flow from operating activities is the same regardless of the presentation method used. The direct method lists the receipts and payments of cash for specific operating activities by restating the income statement to a cash basis.

Related Questions

16. Mendes Charters reported the following information atDecember 31, 2015:

Preferred stock, $100 par, 500 shares authorized, andoutstanding;

cumulative; nonparticipating; callable at par value $50,000

Common stock, $12 par, 50,000shares authorized and outstanding 600,000

Additional paid-incapital--Common 25,000

Retained earnings825,000

Mendesâ total contributed capitalis

a. $ 650,000 b. $ 675,000 c. $1,500,000 d. $ 625,000

17. Which of the following should be considered when a companydecides to declare a cash dividend on common stock?

a. The retained earnings balance only

b. The amount of authorized shares of common stock

c. The book value of the company's stock

d. The cash available and the retained earnings balance

18. The primary reason for a stock split is to

a. distribute cash to the investor.

b. decrease the market value of the stock.

c. decrease the number of shares outstanding.

d. increase the contributed capital of the corporation.

19. Nordic Exports Inc. reported net income of $150,000 for2015, but its cash balance decreased $40,000. Which financialstatement should Nordic Exportsâ management refer to for anexplanation of this situation? a

. Balance Sheet

b. Income Statement

c. Statement of Retained Earnings

d. Statement of Cash Flows

20. The primary purpose of the statement of cash flows is toprovide information about

a. the financial position of the company.

b. the profitability of the company.

c. the investing and financing activities of the company.

d. the cash inflows and outflows of the company.

21. Cash flows from acquiring and disposing of long-term assetsare classified as

a. operating activities.

b. investing activities

. c. financing activities.

d. purchasing activities.

22. Cash flows from borrowing and paying off a 90-day bank loanare classified as

a. operating activities. b. investing activities. c. financingactivities. d. purchasing activities.

23. Cash flows from issuing and repurchasing stock or issuingand repaying (retiring) debt are classified as

a. operating activities. b. investing activities. c. financingactivities. d. borrowing activities.

24. Cash flows from acquiring and selling products areclassified as

a. operating activities. b. investing activities. c. financingactivities. d. distribution activities.

25. Presented below is the operating activities section of thestatement of cash flows for Golden Consulting for 2016:

Operating activities:

Net income $ 92,000

Add: Depreciation 20,000

Decrease in accounts receivable 8,000

__________

$120,000

Deduct: Decrease in accounts payable (6,000)

Net cash inflow from operating activities $114,000

Which method of preparing the operating activities section hasGolden Consulting used?

a. The direct method b. The indirect method c. Either method d.Cannot be determined without further information

redcaribou302

To compare statement of cash flows reporting under the direct andindirect methods, select "Direct", "Indirect" or "Both" indicatingthe method in which the line items are reported on the statement ofcash flows.

Cash Flows (and Related Changes) Statement of Cash FlowsMethod
1. Net income
2. Receipts from customers
3. Accounts receivable increase or decrease
4. Payments to suppliers
5. Inventory increase or decrease
6. Accounts payable increase or decrease
7. Payments to employees
8. Wages payable, increase or decrease
9. Depreciation expense
10. Cash flows from operating activities
11. Cash flows from investing activities
12. Cash flows from financing activities
13. Net increase or decrease in cash during the period

* you are going to get statement of cash flows method(choose one ofdirect, indirect, both)

peachalligator40

The comparative balance sheet of Cromme Inc. for December 31,2016 and 2015, is shown as follows:

Question not attempted.

1		Dec. 31, 2016	Dec. 31, 2015
2	Assets
3	Cash	$626,640.00	$585,760.00
4	Accounts receivable (net)	226,900.00	208,390.00
5	Inventories	641,350.00	616,130.00
6	Investments	0.00	239,300.00
7	Land	328,730.00	0.00
8	Equipment	705,940.00	553,530.00
9	Accumulated depreciation-equipment	(166,970.00)	(148,000.00)
10	Total assets	$2,362,590.00	$2,055,110.00
11	Liabilities and Stockholdersâ Equity
12	Accounts payable (merchandise creditors)	$425,140.00	$404,540.00
13	Accrued expenses payable (operating expenses)	42,020.00	52,750.00
14	Dividends payable	23,580.00	19,500.00
15	Common stock, $4 par	154,000.00	100,000.00
16	Paid-in capital: Excess of issue price over parâcommon stock	416,600.00	279,400.00
17	Retained earnings	1,301,250.00	1,198,920.00
18	Total liabilities and stockholdersâ equity	$2,362,590.00	$2,055,110.00

Additional data obtained from an examination of the accounts inthe ledger for 2016 are as follows:

A.	The investments were sold for $279,880 cash.
B.	Equipment and land were acquired for cash.
C.	There were no disposals of equipment during the year.
D.	The common stock was issued for cash.
E.	There was a $198,010 credit to Retained Earnings for netincome.
F.	There was a $95,680 debit to Retained Earnings for cashdividends declared.

Prepare a statement of cash flows, using the indirect method ofpresenting cash flows from operating activities

The section of the statement of cash flows that reports the cashtransactions affecting the determination of net income.

. Refer to the Labels and Amount Descriptions list provided forthe exact wording of the answer choices for text entries. Be sureto complete the heading of the statement. In the operatingactivities section, use the minus sign to indicate cash outflows,decreases in cash and a net cash outflow, if required. In theinvesting and financing activities section, use a minus sign onlyto indicate a NET cash outflow for the section.

Labels

In CengageNOW, a Label is a text entry that does not have anamount associated with it.

and Amount Descriptions

In CengageNOW, an Amount Description is a text entry other thanan Account that has an amount associated with it.

Cash paid for dividends

Cash paid for merchandise

Cash paid for purchase of equipment

Cash paid for purchase of land

Cash received from customers

Cash received from sale of common stock

Cash received from sale of investments

December 31, 2016

Decrease in accounts payable

Decrease in accounts receivable

Decrease in accrued expenses payable

Decrease in inventories

Decrease in cash

Depreciation

For the Year Ended December 31, 2016

Gain on sale of investments

Increase in accounts payable

Increase in accounts receivable

Increase in accrued expenses payable

Increase in cash

Increase in inventories

Loss on sale of investments

Net cash flow from operating activities

Net cash flow used for operating activities

Net cash flow from investing activities

Net cash flow used for investing activities

Net cash flow from financing activities

Net cash flow used for financing activities

Net income

Prepare a statement of cash flows, using the indirect method ofpresenting cash flows from operating activities

The section of the statement of cash flows that reports the cashtransactions affecting the determination of net income.

Question not attempted.

Cromme Inc.

Statement of Cash Flows

1	Cash flows from operating activities:
2
3	Adjustments to reconcile net income to net cash flow fromoperating activities:
4
5
6	Changes in current operating assets and liabilities:
7
8
9
10
11
12
13	Cash flows from investing activities:
14
15
16
17
18
19	Cash flows from financing activities:
20
21
22
23
24	Cash at the beginning of the year
25	Cash at the end of the year

scarletkoala290

ACCT 2102 Chapter Notes - Chapter 13: Financial Statement, Cash Flow, Current Asset

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