Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Item 1: Classify each transaction as either an operating activity OA, an investing activity IA, or a financing activity FA, or a noncash investing and

image text in transcribedimage text in transcribedimage text in transcribed Item 1: Classify each transaction as either an operating activity "OA", an investing activity "IA," or a financing activity "FA," or a noncash investing and financing activity "NC." Selected transactions for the Entity A are listed below. 1. Sold stock investment (Amazon) for cash. 2. Paid cash interest on a note payable. 3. Land is purchased by signing a 3-year, 15% note payable. 4. Cash dividends paid. 5. Paid cash for salaries and wages. 6. Pay off a long-term bank loan. 7. Common stock is exchanged for equipment. 8. Land was sold for its book value. 9. Paid cash for property taxes on building. 10. Purchased a new warehouse for the land (see 3 above). Item 2: Entity B reported net income of $88,000 for the current year. Depreciation recorded on buildings and equipment amounted to $45,000 for the year. Balances of needed current asset and current liability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year Change Accounts receivable 101,000 64,000 Inventory 32,000 44,000 Prepaid insurance 4,000 0 Accounts payable 20,600 14,000 Taxes payable 6,500 10,000 37,000 inc Also, a gain on the sale of land of $5,000 was reported. Instructions: Compute the changes in the accounts for each year and then prepare the cash flows from the operating activities section of the statement of cash flows using the indirect method. +1/2 each item (must have sign correct) can omit a total adjustments amount Net income Adjustments to reconcile net income to cash flow from operating activities 88,000

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_2

Step: 3

blur-text-image_3

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

Financial and Managerial Accounting

Authors: Belverd E. Needles, Marian Powers, Susan V. Crosson

10th edition

978-1285441979, 1285441974, 978-1133626992, 1133626998, 978-1133940593

More Books

Students also viewed these Accounting questions

Question

18-36 only, requires information from 18-35. FIFO method, spoilage

Answered: 1 week ago