Question
Exercise 122 Presented below is the income statement of Cowan, Inc.: Sales revenue$378,100 Cost of goods sold 225,100 Gross profit$153,000 Operating expenses 83,000 Income before
Exercise 122
Presented below is the income statement of Cowan, Inc.:
Sales revenue$378,100 Cost of goods sold 225,100 Gross profit$153,000 Operating expenses 83,000 Income before income taxes 70,000 Income taxes 27,900 Net income$42,100
In addition, the following information related to netchangesin working capital is presented:
DebitCredit Cash$12,700 Accounts receivable 21,600 Inventories$19,500 Salaries payable (operating expenses)8,100 Accounts payable 13,000 Income taxes payable 2,800
The company also indicates that depreciation expense for the year was $18,400 and that the deferred tax liability account increased $4,300.
Prepare schedule computing the net cash flow from operating activities by using the indirect method that would be shown on a statement of cash flows.(Show amounts that decrease cash flow with either a - sign e.g. -10,000 or in parenthesis e.g. (10,000).)
Cowan, Inc.
Statement of Cash Flows (Partial)
(Indirect Method)
Cash at Beginning of Period
Cash at End of Period
Cash Flows from Financing Activities
Cash Flows from Investing Activities
Cash Flows from Operating Activities
Net Cash Provided by Financing Activities
Net Cash Provided by Investing Activities
Net Cash Provided by Operating Activities
Net Cash Used by Financing Activities
Net Cash Used by Investing Activities
Net Cash Used by Operating Activities
Net Decrease in Cash
Net Increase in Cash
Decrease in Trade Accounts Payable
Increase in Deferred Tax Liability
Increase in Trade Accounts Receivable
Increase in Salaries Payable
Decrease in Trade Accounts Receivable
Increase in Income Taxes Payable
Increase in Inventories
Decrease in Salaries Payable
Increase in Trade Accounts Payable
Decrease in Inventories
Decrease in Income Taxes Payable
Depreciation expense
Decrease in Deferred Tax Liability
Net Income
$
Adjustments to reconcile net income to
Cash at Beginning of Period
Cash at End of Period
Cash Flows from Financing Activities
Cash Flows from Investing Activities
Cash Flows from Operating Activities
Net Cash Provided by Financing Activities
Net Cash Provided by Investing Activities
Net Cash Provided by Operating Activities
Net Cash Used by Financing Activities
Net Cash Used by Investing Activities
Net Cash Used by Operating Activities
Net Decrease in Cash
Net Increase in Cash
Increase in Deferred Tax Liability
Decrease in Salaries Payable
Decrease in Income Taxes Payable
Depreciation Expense
Increase in Income Taxes Payable
Increase in Trade Accounts Payable
Net Income
Decrease in Trade Accounts Payable
Increase in Trade Accounts Receivable
Decrease in Trade Accounts Receivable
Increase in Inventories
Decrease in Inventories
Increase in Salaries Payable
Decrease in Deferred Tax Liability
$
Decrease in Deferred Tax Liability
Decrease in Inventories
Decrease in Salaries Payable
Increase in Inventories
Net Income
Decrease in Trade Accounts Payable
Increase in Income Taxes Payable
Increase in Trade Accounts Receivable
Increase in Trade Accounts Payable
Increase in Salaries Payable
Decrease in Income Taxes Payable
Increase in Deferred Tax Liability
Depreciation Expense
Decrease in Trade Accounts Receivable
Increase in Deferred Tax Liability
Decrease in Trade Accounts Receivable
Decrease in Trade Accounts Payable
Increase in Trade Accounts Receivable
Decrease in Deferred Tax Liability
Increase in Inventories
Increase in Income Taxes Payable
Decrease in Income Taxes Payable
Net Income
Increase in Salaries Payable
Decrease in Inventories
Depreciation Expense
Decrease in Salaries Payable
Increase in Trade Accounts Payable
Decrease in Inventories
Net Income
Decrease in Trade Accounts Receivable
Increase in Salaries Payable
Decrease in Trade Accounts Payable
Increase in Deferred Tax Liability
Depreciation Expense
Decrease in Salaries Payable
Increase in Trade Accounts Receivable
Increase in Inventories
Decrease in Income Taxes Payable
Increase in Trade Accounts Payable
Increase in Income Taxes Payable
Decrease in Deferred Tax Liability
Decrease in Deferred Tax Liability
Decrease in Trade Accounts Payable
Increase in Inventories
Decrease in Salaries Payable
Decrease in Inventories
Net Income
Depreciation Expense
Increase in Income Taxes Payable
Increase in Trade Accounts Payable
Increase in Trade Accounts Receivable
Decrease in Trade Accounts Receivable
Increase in Salaries Payable
Decrease in Income Taxes Payable
Increase in Deferred Tax Liability
Decrease in Salaries Payable
Decrease in Inventories
Decrease in Trade Accounts Receivable
Depreciation Expense
Decrease in Trade Accounts Payable
Increase in Inventories
Decrease in Income Taxes Payable
Increase in Trade Accounts Receivable
Increase in Deferred Tax Liability
Increase in Salaries Payable
Decrease in Deferred Tax Liability
Increase in Income Taxes Payable
Net Income
Increase in Trade Accounts Payable
Depreciation Expense
Decrease in Trade Accounts Payable
Decrease in Deferred Tax Liability
Increase in Trade Accounts Receivable
Increase in Income Taxes Payable
Increase in Deferred Tax Liability
Decrease in Inventories
Net Income
Decrease in Salaries Payable
Decrease in Income Taxes Payable
Increase in Salaries Payable
Increase in Trade Accounts Payable
Decrease in Trade Accounts Receivable
Increase in Inventories
Cash at Beginning of Period
Cash at End of Period
Cash Flows from Financing Activities
Cash Flows from Investing Activities
Cash Flows from Operating Activities
Net Cash Provided by Financing Activities
Net Cash Provided by Investing Activities
Net Cash Provided by Operating Activities
Net Cash Used by Financing Activities
Net Cash Used by Investing Activities
Net Cash Used by Operating Activities
Net Decrease in Cash
Net Increase in Cash
$
Prepare schedule computing the net cash flow from operating activities by using the direct method that would be shown on a statement of cash flows.
Cowan, Inc.
Statement of Cash Flows (Partial)
Direct Method
Cash at Beginning of Period
Cash at End of Period
Cash Flows from Financing Activities
Cash Flows from Investing Activities
Cash Flows from Operating Activities
Net Cash Provided by Financing Activities
Net Cash Provided by Investing Activities
Net Cash Provided by Operating Activities
Net Cash Used by Financing Activities
Net Cash Used by Investing Activities
Net Cash Used by Operating Activities
Net Decrease in Cash
Net Increase in Cash
Cash Paid to Suppliers
Increase in Inventories
Increase in Salaries Payable
Decrease in Inventories
Cash Received from Customers
Dividends Received
Cash Payments for Operating Expenses
Decrease in Salaries Payable
Increase in Accounts Receivable
Taxes Paid
Operating Expenses Paid
Decrease in Accounts Receivable
$
Decrease in Inventories
Cash Paid to Suppliers
Cash Payments for Operating Expenses
Operating Expenses Paid
Increase in Inventories
Cash Received from Customers
Increase in Accounts Receivable
Decrease in Accounts Receivable
Increase in Salaries Payable
Decrease in Salaries Payable
Dividends Received
Taxes Paid
$
Decrease in Salaries Payable
Operating Expenses Paid
Taxes Paid
Cash Received from Customers
Dividends Received
Decrease in Inventories
Cash Paid to Suppliers
Cash Payments for Operating Expenses
Increase in Inventories
Increase in Accounts Receivable
Decrease in Accounts Receivable
Increase in Salaries Payable
Increase in Inventories
Cash Paid to Suppliers
Cash Payments for Operating Expenses
Decrease in Inventories
Increase in Accounts Receivable
Dividends Received
Taxes Paid
Decrease in Accounts Receivable
Operating Expenses Paid
Increase in Salaries Payable
Decrease in Salaries Payable
Cash Received from Customers
Cash at Beginning of Period
Cash at End of Period
Cash Flows from Financing Activities
Cash Flows from Investing Activities
Cash Flows from Operating Activities
Net Cash Provided by Financing Activities
Net Cash Provided by Investing Activities
Net Cash Provided by Operating Activities
Net Cash Used by Financing Activities
Net Cash Used by Investing Activities
Net Cash Used by Operating Activities
Net Decrease in Cash
Net Increase in Cash
$
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Principles of Accounting
Authors: Belverd E. Needles, Marian Powers and Susan V. Crosson
12th edition
978-1133603054, 113362698X, 9781285607047, 113360305X, 978-1133626985
