Question
Please answer ALL questions. PLEASE.. Help me understand. Ravenna Company is a merchandiser that uses the indirect method to prepare the operating activities section of
Please answer ALL questions. PLEASE.. Help me understand. Ravenna Company is a merchandiser that uses the indirect method to prepare the operating activities section of its statement of cash flows. Its balance sheet for this year is as follows: |
Ending Balance | Beginning Balance | |||
Cash | $ | 93,800 | $ | 112,450 |
Accounts receivable | 75,600 | 81,400 | ||
Inventory | 101,500 | 92,500 | ||
Total current assets | 270,900 | 286,350 | ||
Property, plant, and equipment | 270,000 | 259,000 | ||
Less accumulated depreciation | 90,000 | 64,750 | ||
Net property, plant, and equipment | 180,000 | 194,250 | ||
Total assets | $ | 450,900 | $ | 480,600 |
Accounts payable | $ | 59,200 | $ | 105,200 |
Income taxes payable | 46,000 | 59,900 | ||
Bonds payable | 111,000 | 92,500 | ||
Common stock | 129,500 | 111,000 | ||
Retained earnings | 105,200 | 112,000 | ||
Total liabilities and stockholders equity | $ | 450,900 | $ | 480,600 |
During the year, Ravenna paid a $11,100 cash dividend and it sold a piece of equipment for $5,550 that had originally cost $12,600 and had accumulated depreciation of $8,400. The company did not retire any bonds or repurchase any of its own common stock during the year. |
Required: |
1. | What is the amount of the net increase or decrease in cash and cash equivalents that would be shown on the companys statement of cash flows? |
2. | What net income would the company include on its statement of cash flows? |
3. | How much depreciation would the company add to net income on its statement of cash flows? |
4. | If the company debited Accounts Receivable and credited Sales for $1,110,000 during the year, what is the total amount of credits recorded in Accounts Receivable during the year? |
5. | What is the amount and direction (+ or ) of the accounts receivable adjustment to net income in the operating activities section of the statement of cash flows? |
6-a. | If the company debited cost of goods sold and credited inventory for $740,000 during the year, what is the total amount of inventory purchases recorded on the debit side of the Inventory T-account and the credit side of the Accounts Payable T-account? |
6-b. | What is the total amount of the debits recorded in the Accounts Payable T-account during the year? |
7. | What is the combined amount and direction (+ or ) of the inventory and accounts payable adjustments to net income in the operating activities section of the statement of cash flows? |
8. | If the company debited income tax expense and credited income taxes payable $1,390 during the year, what is the total amount of the debits recorded in the Income Taxes Payable account? |
9. | What is the amount and direction (+ or ) of the income taxes payable adjustment to net income in the operating activities section of the statement of cash flows? |
10. | Would the operating activities section of the companys statement of cash flows contain an adjustment for a gain or a loss? What would be the amount and direction ( + or ) of the adjustment? |
11. | What is the amount of net cash provided by (used in) operating activities in the companys statement of cash flows? |
12. | What is the amount of gross cash outflows reported in the investing section of the companys statement of cash flows? |
13. | What is the companys net cash provided by (used in) investing activities? |
14. | What is the amount of gross cash inflows reported in the financing section of the companys statement of cash flows? |
15. | What is the companys net cash provided by (used in) financing activities? |
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