112 prepare the cash flows from operating activities

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11.2Prepare the cash flows from operating activities section of the statement of cash flows for HawkeyeCompany using the indirect method.(Amounts to be deducted should be indicated with a minus sign.)38
The comparative balance sheets for 2013 and 2012 are given below for Surmise Company. Net incomefor 2013 was $70 million.SURMISE COMPANYComparative Balance SheetsDecember 31, 2013 and 2012($ in millions)20132012AssetsCash$86$Accounts receivable84Less: Allowance for uncollectible accounts(19)(4)Prepaid expenses14Inventory167150Long-term investment104Land88Buildings and equipment352245Less: Accumulated depreciation(122)(98)Patent20$774$621LiabilitiesAccounts payable$18$Accrued liabilities(3)Notes payable38Lease liability107Bonds payable59117Shareholders’EquityCommon stock64Paid-in capitalexcess of par259205Retained earnings232202$774$62112.Prepare the statement of cash flows of Surmise Company for the year ended December 31,2013. Use the indirect method to present cash flows from operating activities because you do nothave sufficient information to use the direct method. You will need to make reasonable assumptionsconcerning the reasons for changes in some account balances. A spreadsheet or T-account analysiswill be helpful.(Enter your answers in millions.Amounts to be deducted should be indicatedwith a minus sign.)41961170882232150050
SURMISE COMPANYStatement of Cash FlowsFor year ended December 31, 2013($ in millions)Cash flows from operating activities:Net income$70Adjustments for noncash effects:Depreciation expense24Bad debt expense15Patent amortization expense2Changes in operating assets and liabilities:Decrease in accountsreceivable12Increase in inventory-17

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Term
Fall
Professor
MarieMain

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