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Chapter 23: Q19E (page 1381)

Data for Anita Baker Company are presented in E23-18.

Instructions

Prepare entries in journal form for all adjustments that should be made on a worksheet for a statement of cash flows.

Short Answer

Expert verified

The journal entries are recorded in Step 2.

Step by step solution

01

Step1:Definition of retained earnings

The retained earnings are defined as the accumulation of part of profits which are left after paying the dividends to the shareholders of the company.

02

Step 2:Preparation statement of cash flows

Journal

Date

Particulars

Debit ($)

Credit ($)

Retained Earnings

15,000

Financing- Cash Dividends

15,000

(Payment of dividends)

Operating – Net Income

40,000

Retained Earnings

40,000

(Net Income recorded)

Operating - Depreciation Expense

16,800

Accumulated Depreciation - Equipment

16,800

(Depreciation expense recorded)

Equipment

110,000

Investing – Purchase of equipment

62,000

Investing – Construction of equipment

48,000

(Equipment purchased and constructed)

Equipment

21,000

Investing – Extraordinary repairs to equipment

21,000

(Major repairs recorded)

Operating – Loss on sale of equipment

5,800

Accumulated depreciation - Equipment

25,200

Investing – sales of equipment

25,000

Equipment

56,000

(Sale of equipment recorded)

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Most popular questions from this chapter

Question: . Classify the following items as (1) operating, (2) investing, (3) financing, or (4) significant noncash investing and financing activities, using the direct method.

(a) Cash payments to employees.

(b) Redemption of bonds payable.

(c) Sale of building at book value.

(d) Cash payments to suppliers.

(e) Exchange of equipment for furniture.

(f) Issuance of preferred stock.

(g) Cash received from customers.

(h) Purchase of treasury stock.

(i) Issuance of bonds for land.

(j) Payment of dividends.

(k) Purchase of equipment.

(l) Cash payments for operating expenses.

Question: Stan Conner and Mark Stein were discussing the presentation format of the statement of cash flows of Bombeck Co. At the bottom of Bombeck’s statement of cash flows was a separate section entitled “Noncash investing and financing activities.” Give three examples of significant noncash transactions that would be reported in this section.

Data for Brecker Inc. are presented in E23-13. Instructions Prepare a statement of cash flows using the indirect method.

Stan Conner and Mark Stein were discussing the statement of cash flows of Bombeck Co. In the notes to the statement of cash flows was a schedule entitled “Non-cash investing and financing activities.” Give three examples of significant non-cash transactions that would be reported in this schedule.

Of what use is the statement of cash flows?
See all solutions

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