chap12 handout - Decrease in income taxes payable 2,000...

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I. Classification of cash flows exe.: Classify these activities as Operating, investing, or financing. 1. Issued 100,000 shares of $5 par value common stock for $800,000 cash. Financing 2. Paid utilities expense. Operating 3. Purchased two semi-trailer trucks for $170,000 cash. Investing 4. Paid employees $12,000 for salaries and wages. Operating 5. Lent $30,000 to Dear Co. Investing 6. Collected $20,000 cash for services provided. Operating 7. Sold land for $250,000. Investing 8. Issued $200,000 of bonds payable Financing II. Indirect Method Example: Allen Co. has the following data: Net income $ 200,000 Depreciation expense 40,000 Loss on sale of land 10,000 Decrease in accounts receivable 20,000 Increase in merchandise inventory 5,000 Increase in prepaid expenses 8,000 Increase in accounts payable 30,000
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Unformatted text preview: Decrease in income taxes payable 2,000 What is the Net cash provided by operating activities (CFO)? Net Income Adjustments for: 1) Non cash expense 2) Gain/Loss on sale 3) Non cash current assets & current liab. Cash flow from Operations (CFO) = ________________________ III. Indirect Method Exercise: JMB Photography reported net income of $ 100,000 for 2010. Included in the income statement were depreciation expense of $ 6,000, patent amortization expense of $ 2,000, and a gain on sale of equipment of $ 3,600. JMBs comparative balance sheets show the following balances. 12/ 31/ 10 12/ 31/ 09 Accounts receivable $ 21,000 $ 27,000 Accounts payable 9,200 6,000 Calculate net cash provided by operating activities for JMB Photography....
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This note was uploaded on 02/24/2011 for the course BUS 310 taught by Professor Markbambach during the Fall '10 term at University of Delaware.

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chap12 handout - Decrease in income taxes payable 2,000...

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