"03-15SCF Examples

"03-15SCF Examples - 3 Cash A/R Inventory...

Info iconThis preview shows pages 1–5. Sign up to view the full content.

View Full Document Right Arrow Icon
Statement of Cash Flows Example Problem 2011 Sales 10,000 Cost of Goods Sold (6,000) Depreciation Expense (900) Gain on sale machinery 480 Net income 3,580 12/31/11 12/31/10 Accounts Receivable 1,000 950 Inventory 1,500 1,200 Accounts Payable 800 710 Machinery 2,100 2,000 Accumulated Depreciation (1,100) (530) Machinery with a cost of $400 and accumulated depreciation of $330 was sold for $550 cash. Required: 1. Using the data above, prepare a statement of cash flows 2. Reconcile the SCF with a T-account analysis 1
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Cash A/R Inv. Machinery Acc. Depr. A/P Sales Gain Depr. Exp. COGS 2
Background image of page 2
Net Income Add: depreciation, depletion, amortization Add: Losses Deduct: Gains Add: decreases in current assets (not investments) Deduct: Increases in current assets (not investments) Add: increases in current liabilities (not debt) Deduct: decreases in current liabilities (not debt) Indirect method Cash Flow From Operations
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 4
Background image of page 5
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 3 Cash A/R Inventory Machinery Acc. Depr. f 9,950 6,210 e 950 1,200 2,000 530 h 550 500 i a10,000 9,950 f d 1,500 1,200 c i 500 400 h h 330 900 g 3,790 1,000 1,500 2,100 1,100 A/P 710 e6,210 6,300 b 800 Sales Gain Depr. Exp. COGS 10,000 a 480 h g 900 b 6,300 1,500 d c 1,200 6,000 4 Net Income $3,580 Add: depreciation, depletion, amortization 900 Add: Losses Deduct: Gains (480) Add: decreases in current assets (not investments) Deduct: Increases in current assets (not investments) (50 + 300) (350) Add: increases in current liabilities (not debt) 90 Deduct: decreases in current liabilities (not debt) Indirect method Cash Flow From Operations 3,470 Cash Flow From Investing Sale machine $550 Purchase machine (500 ) 50 Net cash flow $3,790 5...
View Full Document

Page1 / 5

"03-15SCF Examples - 3 Cash A/R Inventory...

This preview shows document pages 1 - 5. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online