Log out Go to App
Go to App

Learning Materials

Features

Discover

Chapter 23: Q11BE (page 1374)

In 2017, Wild Corporation reported a net loss of \(70,000. Wild’s only net income adjustments were depreciation expense \)81,000, and increase in accounts receivable $8,100. Compute Wild’s net cash provided (used) by operating activities.

Short Answer

Expert verified

The net cash provided by operating activities is computed as $2,900.

Step by step solution

01

Definition of Accounts Receivables

Accounts Receivables are defined as the balance sheet items which show the balance of money due to business for goods or services sold.

02

Computation of net cash provided by operating activities

Particulars

Amount ($)

Amount ($)

Cash flows from Operating Activities

Net Loss

-$70,000

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation Expense

81,000

Increase in accounts receivables

-8,100

72,900

Net cash provided by operating activities

$2,900

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Start your free trial

Over 30 million students worldwide already upgrade their learning with Vaia!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

Identify and explain the major steps involved in preparing the statement of cash flows.

Unlike the other major financial statements, the statement of cash flows is not prepared from the adjusted trial balance. From what sources does the information to prepare this statement come, and what information does each source provide?

Question: Which of the following is true regarding the statement of cash flows under IFRS?

  1. The statement of cash flows has two major sections— operating and non-operating.
  2. The statement of cash flows has two major sections— financing and investing.
  3. The statement of cash flows has three major sections— operating, investing, and financing.
  4. The statement of cash flows has three major sections— operating, non-operating, and financing

The accounts below appear in the ledger of Anita Baker Company.

Retained Earnings Dr. Cr. Bal.

Jan. 1, 2017 Credit Balance \( 42,000

Aug. 15 Dividends (cash) \)15,000 27,000

Dec. 31 Net Income for 2017 \(40,000 67,000

Equipment Dr. Cr. Bal.

Jan. 1, 2017 Debit Balance \)140,000

Aug. 3 Purchase of Equipment \(62,000 202,000

Sept. 10 Cost of Equipment Constructed 48,000 250,000

Nov. 15 Equipment Sold \)56,000 194,000

Accumulated Depreciation— Equipment Dr. Cr. Bal.

Jan. 1, 2017 Credit Balance \( 84,000

Apr. 8 Major Repairs \)21,000 63,000

Nov. 15 Accum. Depreciation on Equipment Sold 25,200 37,800

Dec. 31 Depreciation for 2017 \(16,800 54,600

Instructions

From the postings in the accounts above, indicate how the information is reported on a statement of cash flows by preparing a partial statement of cash flows using the indirect method. The loss on sale of equipment (November 15) was \)5,800.

Red Hot Chili Peppers Co. had the following activity in its most recent year of operations.

(a) Purchase of equipment. (g) Amortization of intangible assets.

(b) Redemption of bonds payable. (h) Purchase of treasury stock.

(c) Sale of building. (i) Issuance of bonds for land.

(d) Depreciation. (j) Payment of dividends.

(e) Exchange of equipment for the furniture. (k) Increase in interest receivable on notes receivable.

(f) Issuance of common stock. (l) Pension expense exceeds the amount funded.

Instructions

Classify the items as (1) operating—add to net income; (2) operating—deduct from net income; (3) investing; (4) financing; or (5) significant noncash investing and financing activities. Use the indirect method.
See all solutions

Recommended explanations on Business Studies Textbooks

Business Operations

Read Explanation

Operational Management

Read Explanation

Strategic Analysis

Read Explanation

Intermediate Accounting

Read Explanation

Business Case Studies

Read Explanation

Strategic Direction

Read Explanation
View all explanations

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.

Sign-up for free