60000 stockse 1 casha c o mmo n 60000

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Unformatted text preview: from Operating Activities For the Years Ended December 31, 2010, 2011, and 2012 Cash collections from customers and sales $ Cash payments for expenses and to suppliers (8,000) Net cash increase (decrease) due to operating activities $ 2012 $ 8,000 2011 9,000 2010 $ 9,000 (12,000) (4,000) $ (3,000) 4,000 c. Pendleton Enterprises Statement of Cash Flows from Operating Activities For the Years Ended December 31, 2010, 2011, and 2012 $ 1,000 2012 2010 Cash collections from customers and sales 13,000 Cash payments for expenses and to suppliers (11,000) Net cash increase (decrease) due to operating activities $ d. $ $ 4,000 2011 _ 9,000 $ (12,000) (1,000) $ (3,000) $ 2,000 3,000 Managers can manipulate cash flows from operating activities by manipulating the timing of cash collections and cash payments associated with operating activities. By comparing parts (b) and (c) with part (a), it is obvious that these types of manipulations offset themselves in the next period. So if a manager wants to continue manipulating cash flows from operating activities, the manager will have to manipulate the timing of cash inflows and outflows every year. P14–13 Watson and Holmes Detective Agency Statement of Cash Flows – Direct Method For the Year Ended December 31, 2012 Cash flows from operating activities: Cash collections from customers Cash paid for inventory Cash paid for interest Cash paid for other expenses Net cash increase (decrease) due to operating activities Cash flows from investing activities: Purchase of long­lived assets Net cash increase (decrease) due to investing activities Cash flows from financing activities: Cash paid for dividends Proceeds from issuance of common stock Net cash increase (decrease) due to financing activities Net increase in cash Beginning cash balance, January 1, 2012 Ending cash balance, December 31, 2012 10,000 * $35,500 $ $ 34,500* (23,000) (2,800) (9,000) (3 0 0 ) $ (1,000) (1,000) $ (7 0 0 ) 6,000 5,300 $ 4,000 6,000 $ = $42,000 revenues – $5,000 increase in accounts receivable + $500 increase in allowance for doubtful accounts – $2,000 bad debt expense – $1,000 decrease in deferred revenues P14–13 Concluded Watson and Holmes Detective Agency Statement of Cash Flows – Direct Method For the Year Ended December 31, 2012 Cash flows from operating activities: Net income Adjustments: $ 2,000 Depreciation $ 2,000 Incr...
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