Chapter 14A - Solution Manual

Chapter 14A - Solution Manual - Chapter 14A The Direct...

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Chapter 14A The Direct Method of Determining the Net Cash Provided by Operating Activities Appendix 14A The Direct Method of Determining the Net Cash  Provided by Operating Activities Exercise 14A-1  (15 minutes) Sales. ................................................................. $1,000,000 Adjustments to a cash basis: Plus decrease in accounts receivable. .........     +       25,000     $1,025,000 Cost of goods sold. ............................................ 580,000 Adjustments to a cash basis: Plus increase in inventory. ............................ + 77,000 Plus decrease in accounts payable. .............     +       20,000     677,000 Selling and administrative expenses. ................. 300,000 Adjustments to a cash basis: Less decrease in prepaid expenses. ............ – 2,000 Plus decrease in accrued liabilities. .............. + 4,000 Less depreciation. ........................................     – 50,000     252,000 Income taxes. ..................................................... 36,000 Adjustments to a cash basis: Less increase in deferred income taxes. ......       – 6,000           30,000     Net cash provided by operating activities. .......... $       66,000     Note that the $66,000 agrees with the net cash provided by operating  activities figure under the indirect method in the previous exercise. 14A-1
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Chapter 14A The Direct Method of Determining the Net Cash Provided by Operating Activities Exercise 14A-2  (15 minutes) Sales. ........................................................... $500 Adjustments to a cash basis: Increase in accounts receivable. ............       –7     $493 Cost of goods sold. ...................................... 300 Adjustments to a cash basis: Increase in inventory. ............................. +14 Increase in accounts payable. ................       –6     308 Selling and administrative expenses. ........... 180 Adjustments to a cash basis: Depreciation. ..........................................   –10       170     Net cash provided by operating activities. ... $ 15 14A-2
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Chapter 14A The Direct Method of Determining the Net Cash Provided by Operating Activities Exercise 14A-3  (15 minutes) Sales. ............................................................. $600 Adjustments to a cash basis: Decrease in accounts receivable. .............   +10     $610 Cost of goods sold. ........................................ 250 Adjustments to a cash basis: Increase in inventory. ............................... +30 Increase in accounts payable. ..................   –20     260 Selling and administrative expenses. ............. 280 Adjustments to a cash basis: Decrease in prepaid expenses. ................ –5 Decrease in accrued liabilities. ................. +10 Depreciation. ............................................   –40     245 Income taxes. ................................................. 30 Adjustments to a cash basis: Increase in income taxes payable. ...........     –15           15     Net cash provided by operating activities. ...... $ 90 14A-3
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This note was uploaded on 12/14/2011 for the course ACCOUNTING 2301 taught by Professor Sarah during the Fall '10 term at HCCS.

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Chapter 14A - Solution Manual - Chapter 14A The Direct...

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