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Complied list of problems Statment of Cash Flow.docx

Complied list of problems Statment of Cash Flow.docx -...

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Case #1: Classifying a Statement of Cash Flows Using the codes below indicate how each item will affect a statement of cash flows. Code Letter Effect O-A Added to net income in the operating section O-S Subtracted from net income in the operating section I-R Cash receipt in investing section I-P Cash payment in investing section F-R Cash receipt in financing section F-P Cash payment in financing section N Noncash investing and/or financing activity Code Letter Item Event a) Increase in accounts receivable b) Decreases in accounts payable c) Issuance of stock d) Depreciation expense e) Sale of land at book value f) Sale of land at gain g) Payment of dividends h) Purchase of land and building i) Purchase of long term investment (stock) j) Increase in accounts payable k) Decrease in accounts receivable l) Loan from bank by signing note m) Purchase of equipment using note n) Increase in inventory o) Issuance of bonds p) Retirement of bonds payable q) Sale of equipment at a loss
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r) Purchase of treasury stock Case #2: Simple Statement – Cash Flow from Operations Consider the following income statement and additional information to determine Cash Flow from Operations for the Wills Company: Sales $1,000,000 Cost of Goods Sold 750,000 Gross Margin $ 250,000 Selling and Administrative Expenses: Salary Expense $50,000 Depreciation Expense 25,000 Administrative Expense 25,000 100,000 Net Income $ 150,000 Additional Information: Decrease in Inventories $9,000 Increase in Accounts Receivables 5,000 Increase in Accounts Payable 6,000 Required: Compute Cash Flows from Operating Activities: $__________ Case #3: Simple Statement – Cash Flow from Operations Below is the income statement for Lopes Company for the year ending December 31, 2016: Sales (net) $500,000 Cost of Goods Sold: Beginning Inventory $50,000 Purchases 300,000 Goods Available for Sale 350,000 Ending Inventory -40,000 Cost of Goods Sold -310,000 Gross Margin $190,000 Expenses: Wages -35,000 Depreciation -30,000 Advertising -15,000 Administrative -5,000 -85,000 Income from Operations $105,000 Gain on Sale of Equipment 50,000 Net Income $155,000 The following balances were derived from the balance sheet: December 31 2016 2015 Accounts Receivable $100,000 $90,000 Accounts Payable 30,000 50,000
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Prepaid Advertising Expense 5,000 3,000 Wages Payable 5,000 4,000 Inventory 40,000 50,000 Required: Prepare the Cash Flows from Operating Activities using the Indirect Method
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