Beruflich Dokumente
Kultur Dokumente
1. The following information is available regarding the ending and beginning balances in
Accounts Payable, Inventory, and Accounts Receivable:
Accounts Accounts
Payable Inventory Receivable
Ending 80,000 40,000 80,000
Beginning 100,000 50,000 85,000
Change (20,000) (10,000) (5,000)
Net income for the period was $480,000, which included depreciation expense of
$100,000.
Required: Assuming that no other relevant changes took place, determine cash flows
from operating activities.
3. The McGill Company has made the following balance sheet information available for use
in this problem:
Ending Beginning
Balance Balance
Accounts receivable $12,000 $19,000
Inventory 4,000 11,000
Supplies 1,000 2,500
Prepaid rent 3,500 3,000
Accounts payable 15,000 14,000
Unearned rent revenue 6,000 1,500
Salaries payable 1,000 2,000
During the year, the company recorded the following activities:
- the purchase of investment securities; $12,000
- the payment of cash dividends; $3,000
- the sale of land costing $40,000 for proceeds of $54,000
- the annual depreciation of plant and equipment; $9,000
- the issue of common stock for cash; $5,000
- annual accrual net income; $156,000
Required: Prepare McGill's annual statement of cash flows using the indirect method of
disclosing cash flows from operations.
2
Case: Scott Company
The following are balance sheets for Scott Company as of the end of Years 1 and 2:
Balance Sheet
Year 2 Year 1
Cash 189 50
Accounts receivable 950 750
Inventory 500 300
Prepaid expenses 40 30
Plant assets 3,200 3,000
Accumulated depreciation (1,740) (1,800)
Total assets 3,139 2,330
3
3- ANS: The cash flows statement is as follows:
4 -case : . Refer to Scott Company. Determine the amount of cash provided by Scott's
operating activities.
ANS: Cash provided by operations:
Net income 180
Add back depreciation 240
Less increase in other assets:
ARs (200)
Inventory (200)
Prepaid expenses (10)
Add increase in liabilities:
APs 200
Taxes Payable 50
Less decrease in liabilities:
Interest Payable (6)
Net from Operating 254
investing activities.
4
financing activities.