Chapter 1, Problem 20E

Analysis of Longmind Companys accounts revealed the following activity for Equipment, with descriptions added for clarity of analysis. How would these two transactions be reported for cash flow purposes? Note the section of the statement of cash flow, if applicable, and if the transaction represents a cash source, cash use, or noncash transaction.

Suppose your company sells goods for $300, of which $200 is received in cash and $100 is onaccount. The goods cost your company $125 and were paid for in a previous period. Your companyalso recorded salaries and wages of $70, of which only $30 has been paid in cash.Required:1. Show the journal entries to record these transactions.2. Calculate the amount that should be reported as net cash flow from operating activities.3. Calculate the amount that should be reported as net income.4. Show how the indirect method would convert net income (requirement 3) to net cash flowfrom operating activities (requirement 2).5. What general rule about converting net income to operating cash flows is revealed by youranswer to requirement 4?

Los Angeles Company provided the following information during the current information. What amount should be reported as net cash provided by operating activities using direct method?

The following information on cash transactions were reported by FDNACCT Co.: Receipts from sale of goods = P390,000 Investment of owner = P28,000 Purchase of equipment = P658,000 Receipt of interest income = P8,000 Purchase of office supplies - P53,000 = Withdrawal by owner = P13,000 How much is cash provided by (used in) Financing Activities? Enter as a negative number if the answer is used in Financing Activities.

[The following information applies to the questions displayed below.]   Ravenna Company is a merchandiser that uses the indirect method to prepare the operating activities section of its statement of cash flows. Its balance sheet for this year is as follows:     Ending Balance   Beginning Balance Cash and cash equivalents $ 102,000   $ 122,400 Accounts receivable   81,700     88,000 Inventory   109,700     100,000 Total current assets   293,400     310,400 Property, plant, and equipment   291,000     280,000 Less accumulated depreciation   97,000     70,000 Net property, plant, and equipment   194,000     210,000 Total assets $ 487,400   $ 520,400             Accounts payable $ 64,000   $ 113,700 Income taxes payable   49,700     65,700 Bonds payable   120,000     100,000 Common stock   140,000     120,000 Retained earnings   113,700     121,000 Total liabilities and stockholders’ equity $ 487,400   $ 520,400     During the year, Ravenna paid a…

Required information [The following information applies to the questions displayed below.] Golden Corp's curent year income statement, comparative balance sheets, and additional information follow. For the year, (1) all sales are credit sales, (2) all credits to Accounts Recelvable reflect cash recelpts from customers, (3) all purchases of Inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for Inventory. (5) Other Expenses are all cash expenses, and (6) any change In Income Taxes Payable reflects the accrual and cash payment of taxes. GOLDEN CORPORATION Comparative Balance Sheets December 31 Current Year Prior Year Assets $ 177,000 102,5e0 620,5e0 9ee,000 370,000 $ 121,300 84,00e Cash Accounts receivable Inventory 539,000 744,300 Total current assets Equipment Accum. depreciation-Equipment 312,00e (11e,500) $ 945,800 (164,500) Total assets $1,185,500 Liabilities and Equity Accounts payable Income taxes payable Total current liabilities Equity Connon…

An intern at Block Financials, specializing in block chain transactions is preparing the operating activities section of the statement of cash flows. How is a decrease in current liabilities handled? Multiple Choice It is subtracted from net income in the cash flows fror operating activities section. It is added to inventory purchases in the cash flows from investing activities section. It is added to net income in the cash flows from operating activities section. It is subtracted from current assets in the cash flows from financing activities section.

Classifying items on the statement of cash flows Cash flow items must be categorized into one of four categories. Identify each item as operating (O), investing (I), financing (F), or non-cash (N). a. Cash purchase of merchandise inventory b. Cash payment of dividends c. Cash receipt from the collection of long-term notes receivable d. Cash payment for income taxes e. Purchase of equipment in exchange for notes payable f. Cash receipt from the sale of land g. Cash received from borrowing money h. Cash receipt for interest income i. Cash receipt from the issuance of common stock j. Cash payment of salaries

Prepare a complete statement of cash flows using the indirect method for the current year. Note: Amounts to be deducted should be indicated with a minus sign.   Golden Corporation's current year income statement, comparative balance sheets, and additional information follow. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) any change in Income Taxes Payable reflects the accrual and cash payment of taxes. GOLDEN CORPORATION Comparative Balance Sheets December 31   Current Year Prior Year Assets     Cash $ 178,000 $ 122,400 Accounts receivable 104,000 85,000 Inventory 622,000 540,000 Total current assets 904,000 747,400 Equipment 372,700 313,000 Accumulated depreciation—Equipment (165,000) (111,000) Total assets $ 1,111,700 $ 949,400 Liabilities and Equity…