Bandc transaction 1 2 3 4 5 6 7 8 9 10 11 12 13 p143

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Unformatted text preview: payable Decrease in unearned revenue Total adjustments (13,400) Net cash increase due to operating activities 10,900 $ E14–22 Standard Center Manufacturing Operating Section – Statement of Cash Flows (Direct Method) For the Year Ended December 31, 2012 Cash from operating activities: Cash receipts from sales revenue Cash receipts from service revenue Cash receipts from interest revenue Cash payments for inventory Cash payments for wages Cash payments for rent Cash payments for interest Cash payments for taxes Net cash increase (decrease) due to operating activities $ 73,500 25,800 9,500 (14,600) (28,800) (24,200) (7,500) _(3,400) $ 30,300 E14–22 Concluded Standard Center Manufacturing Operating Section – Statement of Cash Flows (Indirect Method) For the Year Ended December 31, 2012 Cash flows from operating activities: Net income Adjustments: Depreciation expense Loss on sale of investments Decrease in accounts receivable Decrease in inventory Decrease in interest receivable Increase in prepaid rent Increase in accounts payable Decrease in wages payable Decrease in interest payable Decrease in taxes payable Decrease in unearned revenue Total adjustments 27,500 Net cash increase due to operating activities $30,300 $2,800 $ 4,300 17,900 6,000 1,000 2,200 (2,700) 3,900 (400) (3 0 0 ) (2,000) _(2,400) E14–23 An estimate of net cash from operations would be: Income before tax Less: Tax Plus: Provision for amortization Less: Net gains on sales of assets Plus: Provision for impairment Less: Net increase in working capital Cash from operations 2,214 (624) 1,946 (2 1 9 ) 642 (9 6 4 ) 2,995 Taxes are deducted because they represent an operating cash outflow, while the non­cash charges for amortization and impairment are added back. The sale of assets is an investing activity, so it should not be included in the operating section, while the increase in working capital represents a use of cash and is therefore deducted. PROBLEMS P14–1 a., b., and c. Transaction 1. 2....
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