The 2020 income statement and comparative balance sheet of Mandarin Design Ltd. follow: Mandarin Design Ltd. had
Question:
The 2020 income statement and comparative balance sheet of Mandarin Design Ltd. follow:
Mandarin Design Ltd. had no non-cash financing and investing transactions during 2020. During the year, there were no sales of land or plant and equipment, and no issuances of notes payable.
Required
1. Prepare the 2020 cash flow statement by the indirect method.
2. Evaluate the cash flow for this company.
MANDARIN DESIGN LTD. Income Statement For the Year Ended June 30, 2020 Revenues Sales revenue $257,000 Interest revenue 13,600 Total revenues 270,600 Expenses Cost of goods sold $76,600 Salaries expense 27,800 Amortization expense 4,000 Other operating expenses 10,500 Interest expense 16,600 Income tax expense 27,800 Total expenses 163,300 Net income $107,300
Step by Step Answer:
ANSWER 1 Calculation of Cash Flows using the Indirect Method Mandarin Design Ltd Statement of Cash F...View the full answer
Horngrens Accounting
ISBN: 9780135359785
11th Canadian Edition Volume 2
Authors: Tracie Miller Nobles, Brenda Mattison, Ella Mae Matsumura, Carol A. Meissner, Jo Ann Johnston, Peter R. Norwood
Related Video
In order to determine the amount of cash created by operating operations, the indirect technique for preparing the statement of cash flows entails adjusting net income with changes in balance sheet.
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