Prepare a statement of cash flows, using the indirect method of presenting cash flows from (used for) operating activities. Be sure to complete the heading of the statement. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Use the minus sign to indicate cash outflows, decreases in cash and a net cash outflow for each section, if required. b. Was Hirayama Industries Inc.’s net cash flows from operations more or less than net income? What is the source of this difference?
Prepare a statement of cash flows, using the indirect method of presenting cash flows from (used for) operating activities. Be sure to complete the heading of the statement. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Use the minus sign to indicate cash outflows, decreases in cash and a net cash outflow for each section, if required. b. Was Hirayama Industries Inc.’s net cash flows from operations more or less than net income? What is the source of this difference?
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter15: Statement Of Cash Flows
Section: Chapter Questions
Problem 3BE
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Question
The comparative balance sheet of Hirayama Industries Inc. for December 31, 20Y2 and 20Y1, is as follows:
1
|
|
Dec. 31, 20Y2
|
Dec. 31, 20Y1
|
2
|
Assets
|
|
|
3
|
Cash
|
$488.00
|
$163.00
|
4
|
Accounts receivable (net)
|
283.00
|
203.00
|
5
|
Inventories
|
171.00
|
110.00
|
6
|
Land
|
396.00
|
455.00
|
7
|
Equipment
|
225.00
|
171.00
|
8
|
|
(56.00)
|
(26.00)
|
9
|
Total assets
|
$1,507.00
|
$1,076.00
|
10
|
Liabilities and
|
|
|
11
|
Accounts payable (merchandise creditors)
|
$173.00
|
$164.00
|
12
|
Dividends payable
|
26.00
|
|
13
|
Common stock, $1 par
|
98.00
|
47.00
|
14
|
Excess of paid-in capital over par
|
254.00
|
122.00
|
15
|
|
956.00
|
743.00
|
16
|
Total liabilities and stockholders’ equity
|
$1,507.00
|
$1,076.00
|
The following additional information is taken from the records:
1. | Land was sold for $122. |
2. | Equipment was acquired for cash. |
3. | There were no disposals of equipment during the year. |
4. | The common stock was issued for cash. |
5. | There was a $313 credit to Retained Earnings for net income. |
6. | There was a $100 debit to Retained Earnings for cash dividends declared. |
Required:
a. | Prepare a statement of |
b. | Was Hirayama Industries Inc.’s net cash flows from operations more or less than net income? What is the source of this difference? |
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