Question 14.CP.4: 1. What are the advantages of a worksheet approach for prepa...

Managerial Accounting The Cornerstone of Business Decision-Making

1. What are the advantages of a worksheet approach for preparing the statement of cash flows?

2. Explain how selling manufacturing equipment for a loss can affect both operating and investing cash.

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Question: 14.CP.2

1. Retained earnings were $120,000 at the beginning of the year and $160,000 at the end of the year. Net income for the current year was $$100,000. Calculate the dividends paid and explain why they are presented in the financing section of the statement of cash flows.2. Explain why “gain on sale of ...

Verified Answer:

1. Dividends paid = $120,000 + $100,000 – $160,000...

Question: 14.7

How to Calculate Operating Cash Flows Using the Direct Method Exhibit 14.2 (p. 795) showed the following information on current assets and liabilities for Lemmons Company: ...

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Cash Flows Adjustments Income Statement $ 50750...

Question: 14.RP.2

Statement of Cash Flows: Direct Method The following balance sheets are taken from the records of Golding: Additional information is as follows: Equipment costing $10,000 was purchased at year-end. No equipment was sold. Net income for the year was calculated as follows: Revenues $ 500,000 Cost of ...

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Cash flows from operating activities: Income ...

Question: 14.RP.1

Statement of Cash Flows: Indirect Method The following balance sheets are taken from the records of Golding Inc.:Additional information is as follows: Equipment costing $10,000 was purchased at year-end. No equipment was sold. Net income for the year was $25,000, and $10,000 in dividends were paid. ...

Verified Answer:

1. Cash flow change: $150,000 – $130,000 = $20,000...

Question: 14.8

How to Prepare a Statement of Cash Flows Using a Worksheet Approach Refer to the comparative balance sheets for Portermart Company in Exhibit 14.3. Other (20X2) transactions include the following: a. Cash dividends of $10,000 were paid. b. Equipment was sold for $8,000. It had an original cost of ...

Verified Answer:

Worksheet: Portermart Company Transactions ...

Question: 14.CP.3

1. What is the difference between the indirect method and the direct method for calculating operating cash flows? 2. Is a company required to use the direct method? ...

Verified Answer:

1. The indirect method arrives at operating cash f...

Question: 14.6

How to Prepare the Statement of Cash Flows Refer to the information for Lemmons Company in Examples 14.2 (p. 796) through 14.5. Required: Prepare a statement of cash flows for Lemmons. ...

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Lemmons Company Statement of Cash Flows For the Ye...

Question: 14.5

How to Compute Financing Cash Flows In 20X2, net income of $180,000 was earned, and dividends of $80,000 were paid. Exhibit 14.2 showed the following information on financing transactions for Lemmons Company: Required: Compute the financing cash flows for 20X2. ...

Verified Answer:

Issuance of mortgage ...

Question: 14.4

How to Compute Investing Cash Flows Equipment with a book value of $50,000 was sold for $70,000 (original purchase cost of $90,000). New equipment was purchased. Exhibit 14.2 showed the following information on investing transactions for Lemmons Company: ...

Verified Answer:

Sale of equipment ...

Question: 14.3

How to Calculate Operating Cash Flows Using the Indirect Method Exhibit 14.2 (p. 795) showed the following information on current assets and liabilities for Lemmons Company: ...

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Net income ...