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Chapter 14: Q4RQ (page 768)
Question: What types of transactions are reported in the non-cash investing and financing activities section of the statement of cash flows?
Answer
The non-cash investing and financing activities record those transaction which does not involve cash
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Use the Rouse Exercise Equipment data in Exercises E14-23 and E14-24. Rouse plansto purchase a truck for \(23,000 and a forklift for \)125,000 next year. In addition, itplans to pay cash dividends of $3,500. Assuming Rouse plans similar activity for 2019,what would be the amount of free cash flow?
Question: Preparing the statement of cash flows—indirect method Use the Preston Media Corporation data in Short Exercise S14-7 and the results you calculated from the requirements. Prepare Preston Media’s statement of cash flows— indirect method—for the year ended December 31, 2018.
A-One Mobile Homes reported the following in its financial statements for the year Ended December 31, 2018:
2018 2017
Income Statement
Net Sales Revenue \( 25,118 \) 21,893
Cost of Goods Sold 18,074 15,501
Depreciation Expense 271 234
Other Operating Expenses 4,632 4,277
Income Tax Expense 530 482
Net Income \( 1,611 \) 1,399
Balance Sheet
Cash \( 21 \) 19
Accounts Receivable 798 615
Merchandise Inventory 3,483 2,832
Property, Plant, and Equipment, net 4,351 3,437
Accounts Payable 1,547 1,364
Accrued Liabilities 938 851
Long-term Liabilities 477 461
Common Stock, no par 670 443
Retained Earnings 5,021 3,784
Requirements
1. Compute the collections from customers.
2. Compute payments for merchandise inventory.
3. Compute payments of other operating expenses.
4. Compute the acquisitions of property, plant, and equipment (no sales of property during 2018).
5. Compute the amount of borrowing, with A-One paying no long-term liabilities.
6. Compute the cash receipt from issuance of common stock.
7. Compute the payment of cash dividends.
Question: Describe the five steps used to prepare the statement of cash flows by the indirect method.
Preparing operating activities using the direct method Amy’s Learning Center has assembled the following data for the year ended June 30, 2018:
Payments to suppliers $ 115,000
Cash payment for purchase of equipment 39,000
Payments to employees 66,000
Payment of notes payable 34,000
Payment of dividends 7,500
Cash receipt from issuance of stock 22,000
Collections from customers 188,000
Cash receipt from sale of land 58,000
Cash balance, June 30, 2017 41,000 Prepare the operating activities section of the business’s statement of cash flows for the year ended June 30, 2018, using the direct method.
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