Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Calculating Net Cash Flow from Operating Activities (Indirect Method) Lincoln Company owns no plant assets and reported the following income statement for the current year:

Calculating Net Cash Flow from Operating Activities (Indirect Method)

Lincoln Company owns no plant assets and reported the following income statement for the current year:

Sales $755,000
Cost of Goods Sold $470,000
Wages Expense 110,000
Rent Expense 42,000
Insurance Expense 15,000 637,000
Net Income $118,000

Additional balance sheet information about the company follows:

End of Year Beginning of Year
Accounts Receivable $54,000 $49,000
Inventory 60,000 66,000
Prepaid Insurance 8,000 7,000
Accounts Payable 22,000 18,000
Wages Payable 9,000 11,000

Use the information to

a. Calculate the net cash flow from operating activities under the indirect method.
$Answer

b. Compute Lincoln Company's operating cash flow to current liabilities (OCFCL) ratio. (Assume current liabilities consist of accounts payable and wages payable.)
(Round your answer to two decimal places.)
Answer

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Internal Auditing Principles And Techniques

Authors: Richard L. Ratliff, W. Wallace, Walter B. Mcfarland, J. Loeboecke

2nd Edition

0894133268, 978-0894133268

More Books

Students also viewed these Accounting questions

Question

Write a program to check an input year is leap or not.

Answered: 1 week ago

Question

Write short notes on departmentation.

Answered: 1 week ago

Question

What are the factors affecting organisation structure?

Answered: 1 week ago

Question

What are the features of Management?

Answered: 1 week ago

Question

Briefly explain the advantages of 'Management by Objectives'

Answered: 1 week ago

Question

How does teacher immediacy affect learning?

Answered: 1 week ago