1000002000010000 90000 b

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Unformatted text preview: 00,000 $ (250,000) (250,000) (175,000) 10,000 Depreciation exp. expense Insurance expense prepaid insurance Rent expense rent payable provided by operating Net income (100,000) 100,000 (60,000) (40,000) (120,000) 12,000 $ 295,000 $ 332,000 Increase 955,000 None 0 in Decrease in inventory (165,000) Depreciation 0 Increase in (100,000) Increase in (108,000) Cash activities P14–16 Direct method Bower Manufacturing Industries Statement of Cash Flows For the Year Ended December 31, 2012 Cash flows from operating activities: Cash collections from sales and accounts receivable Cash paid to suppliers for inventory Cash paid for wages Cash paid for supplies Cash paid for interest $ 90,000a (90,000) (12,000) (5,000) (5,000) Net cash decrease due to operating activities $ (22,000) Cash flows from investing activities: Proceeds $ from Proceeds from Net sale of fixed assets 125,000b cash sale of marketable securities 51,000c increase due to investing activities 176,000 Net cash flow from financing activities 0 Net increase in cash $ 154,000 Beginning cash balance, January 1, 2012 593,000 Ending cash balance, December 31, 2012 $ 747,000 a Cash collections include changes in both Accounts and Notes Receivable. b Proceeds from sale of fixed assets is computed as follows: Cost of machinery and equipment sold Less: Related accumulated depreciation Book value of machinery and equipment sold Less: Loss on sale of fixed assets (per income statement) Proceeds from sale of fixed assets c Proceeds from sale of marketable securities is computed as follows: Decrease in marketable securities Less: Loss on sale of marketable securities (per income statement) Proceeds from sale of marketable securities $ $ 150,000 15,000 135,000 10,000 125,000 $ 55,000 $ 4,000 51,000 $ P14–16 Concluded Indirect method Bower Manufacturing Industries Statement of Cash Flows For the Year Ended December 31, 2012 Cash flows from operating activities: Net income $ 37,000 Adjustments: Decrease in inventory $ 25,000 Depreciation 30,000 Decrease in discount on bonds payable Decrease in supplies inventory Loss on sale of fixed assets Loss on sale of marketable securities Increase in accounts receivable Increase in notes receivable Decrease in accounts payable Total adjustments Net cash decrease due to operating activities Cash flows from investing activities: Proceeds from sale of fixed assets Proceeds from sale of marketable securities Net cash increase due to investing ac...
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This homework help was uploaded on 03/03/2014 for the course ACCT 5053 taught by Professor Staff during the Fall '08 term at Oklahoma State.

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