AddEx LO5 - Chapter 12 The Statement of Cash Flows 12-1...

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© 2008 Nelson, a division of Thomson Canada Limited. Chapter 12 The Statement of Cash Flows 12-1 EXERCISE 12-7 DETERMINATION OF MISSING AMOUNTS—CASH FLOW FROM OPERATING ACTIVITIES LO 4 Case 1: Accounts Receivable, Net Beginning balance 150,000 Credit sales 175,000 X = Cash collections Ending balance 65,000 $150,000 + $175,000 – X = $65,000 X = $260,000 $260,000 + $60,000 (Cash sales) = $320,000 . Case 2: Inventory Beginning balance 80,000 X = Purchases 175,000 Cost of goods sold expense Ending balance 55,000 $80,000 + X – $175,000 = $55,000 X = $150,000 . Accounts Payable 25,000 Beginning balance X = Cash payments 150,000 Purchases 15,000 Ending balance $25,000 + $150,000 – X = $15,000 X = $160,000 .
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© 2008 Nelson, a division of Thomson Canada Limited. Chapter 12 The Statement of Cash Flows 12-2 Case 3: Prepaid Insurance Beginning balance 17,000 X = Cash payments 15,000 Insurance expense Ending balance 20,000 $17,000 + X – $15,000 = $20,000 X = $18,000 . Case 4: Income Taxes Payable 95,000 Beginning balance X = Cash payments 300,000 Tax expense 115,000 Ending balance $95,000 + $300,000 – X = $115,000 X = $280,000 .
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© 2008 Nelson, a division of Thomson Canada Limited. Chapter 12 The Statement of Cash Flows 12-3 PROBLEM 12-2 STATEMENT OF CASH FLOWS—INDIRECT METHOD LO 4 Changes in account balances and explanations (in thousands of dollars):
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AddEx LO5 - Chapter 12 The Statement of Cash Flows 12-1...

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