Direct and Indirect Cash Flow Statements
Not what you're looking for?
A) Prepare a statement of cash flow using the indirect method, including all required disclosures.
b) Prepare a "cash provided by (or used in) operating activities" section under the direct method.
c) Comment on the company's cash flow activities during the year.
See the attached EXCEL file for all of the figures and appropriate information.
Purchase this Solution
Solution Summary
The direct and indirect cash flow statements are examined.
Solution Preview
Direct Method - Statement of Cash Flows
Cash flow from Operating activities
Income before taxes $112,000
Adjustments:
Bad debt expense $2,000
Loss on sale of equipment $3,000
Gain on sale of investments (AFS) $(15,000)
Deprecaition and amortization $20,000 $10,000
Cash flow before working capital changes $122,000
Working capital changes:
Increase in accounts receivable $(17,500)
Increase in merchandise inventory $(14,000)
Reduction in accrued pension liability $(2,500)
Increase in accounts payable $12,500 $(21,500)
$100,500
Income taxes paid $(38,500)
Cash flow from Operating activities $62,000
Cash flow from Investing activities
Sale of investments $52,000
Proceeds from sale of equipment $3,000
Purchase of equipment $(32,000)
Cash flow from Investing activities $23,000
Cash flow from Financing activities
Issue of shares $35,000
Repayment of long term notes $(8,000)
Dividends paid $(74,000)
Change in other comprehensive income $(9,000)
Cash flow from ...
Purchase this Solution
Free BrainMass Quizzes
Managing the Older Worker
This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce
Six Sigma for Process Improvement
A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.
Business Processes
This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.
Lean your Process
This quiz will help you understand the basic concepts of Lean.
Cost Concepts: Analyzing Costs in Managerial Accounting
This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.