College Accounting, Chapters 1-27
23rd Edition
ISBN: 9781337794756
Author: HEINTZ, James A.
Publisher: Cengage Learning,
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Chapter 23A, Problem 7SPB
EXPANDED STATEMENT OF CASH FLOWS Financial statements for McGinnis Company as well as additional information relevant to cash flows during the period are given below and on the next page.
Additional information:
1. Office equipment was sold in 20-2 for $35,000. Additional information on the office equipment sold is provided below.
2. Depreciation expense for the year was $70,000.
3. The following purchases were made for cash:
4. Declared and paid cash dividends of $40,000.
5. Issued 10,000 shares of $10 par common stock for $22 per share.
6. Acquired additional office equipment by issuing a note payable for $8,000.
REQUIRED
Prepare a statement of cash flows explaining the change in cash and cash equivalents for the year ended December 31, 20-2.
STATEMENT OF CASH FLOWS UNDER THE DIRECT METHOD Using the information provided in Problem 23-12B for McGinnis Company, prepare the following:
1. A schedule for the calculation of cash generated from operating activities for McGinnis Company for the year ended December 31, 20-2.
2. A statement of cash flows for McGinnis Company prepared under the direct method for the year ended December 31, 20-2.
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Students have asked these similar questions
Net Cash Provided by Operating Activities
Wiley Company’s income statement for Year 2 follows:
The company’s selling and administrative expense for Year 2 includes $7,500 of depreciation expense. Selected balance sheet accounts for Wiley at the end of Years 1 and 2 are as follows:
Required:
1. Using the direct method, convert the company’s income statement to a cash basis.
2. Assume that during Year 2 Wiley had a $9,000 gain on sale of investments and a $3,000 loss on the sale of equipment. Explain how these two transactions would affect your computations in (1) above.
The following information pertains to Peak Heights Company:
Income Statement for Current Year
Sales
Expenses
Cost of goods sold $ 51,775
Depreciation
6,800
11,900
expense
Salaries expense
Net income
Partial Balance Sheet
Accounts receivable
Inventory
Salaries payable
$ 86,900
70,475
$16,425
Cash flows from operating activities:
Current year
$ 11,400
12,800
1,720
Required:
Present the operating activities section of the statement of cash flows for Peak Heights Company using the indirect method.
Note: List cash outflows as negative amounts.
PEAK HEIGHTS COMPANY
Statement of Cash Flows (Partial)
Prior year
$14,500
8,600
840
$
0
Chapter 23A Solutions
College Accounting, Chapters 1-27
Ch. 23A - Describe the direct method of reporting cash flows...Ch. 23A - Prob. 2RQCh. 23A - Prob. 3RQCh. 23A - Under the direct method of preparing a statement...Ch. 23A - Under the direct method of preparing a statement...Ch. 23A - CASH RECEIVED FROM CUSTOMERS Potts Companys sales...Ch. 23A - Prob. 2SEACh. 23A - Prob. 3SEACh. 23A - Prob. 4SEACh. 23A - Prob. 5SPA
Ch. 23A - COMPUTE CASH PROVIDED BY OPERATING ACTIVITIES Horn...Ch. 23A - EXPANDED STATEMENT OF CASH FLOWS Financial...Ch. 23A - CASH RECEIVED FROM CUSTOMERS Boyd Companys sales...Ch. 23A - Prob. 2SEBCh. 23A - Prob. 3SEBCh. 23A - Prob. 4SEBCh. 23A - Prob. 5SPBCh. 23A - COMPUTE CASH PROVIDED BY OPERATING ACTIVITIES...Ch. 23A - EXPANDED STATEMENT OF CASH FLOWS Financial...
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