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 $ 97,200 $ 116,700 Accounts receivable 77,600 83,600 Inventory 104,200 95,000 Total current assets 279,000 295,300 Property, plant, and equipment 276,000 266,000 Less accumulated depreciation 92,000 66,500 Net property, plant, and equipment 184,000 199,500 Total assets $ 463,000 $ 494,800 Accounts payable $ 60,800 $ 108,000 Income taxes payable 47,200 62,800 Bonds payable 114,000 95,000 Common stock 133,000 114,000 Retained earnings 108,000 115,000 Total liabilities and stockholders equity $ 463,000 $ 494,800 During the year, Ravenna paid a $11,400 cash dividend and it sold a piece of equipment for $5,700 that had originally cost $13,200 and had accumulated depreciation of $8,800 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 a If the company debited Accounts Receivable and credited Sales for $1,140,000 during the year, what is the total amount of credits recorded in Accounts Receivable during the year 4 b What does the amount of these credits represent Payment to suppliers Cash sales Credit sales Total sales Cash collections from customers 5 a 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 5 b What does this adjustment represent Cash payments Cash collected Cash collected from customers Credit sales Cash collected from customers Credit sales 6 a If the company debited cost of goods sold and credited inventory for $760,000 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 6 c What does the amount of these debits represent Cash collections Sales Supplier payments Purchase 7 a 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 7 b What does this amount represent Cash paid to suppliers Cost of goods sold Cash paid to suppliers Cost of goods sold Cash paid to suppliers Purchases 8 a If the company debited income tax expense and credited income taxes payable $1,420 during the year, what is the total amount of the debits recorded in the Income Taxes Payable account 8 b What does the amount of these debits represent Cash paid for income taxes Tax refunds Taxes payable 9 a 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 9 b What does this adjustment represent Tax paid Income tax expenses No taxes are payable Tax paid Income tax expenses 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 12 value 1 33 points Required information 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 References 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

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Sep 15, 2024

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

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	$	97,200	$	116,700
Accounts receivable		77,600		83,600
Inventory		104,200		95,000

Total current assets		279,000		295,300

Property, plant, and equipment		276,000		266,000
Less accumulated depreciation		92,000		66,500

Net property, plant, and equipment		184,000		199,500

Total assets	$	463,000	$	494,800

Accounts payable	$	60,800	$	108,000
Income taxes payable		47,200		62,800
Bonds payable		114,000		95,000
Common stock		133,000		114,000
Retained earnings		108,000		115,000

Total liabilities and stockholders equity	$	463,000	$	494,800

During the year, Ravenna paid a $11,400 cash dividend and it sold a piece of equipment for $5,700 that had originally cost $13,200 and had accumulated depreciation of $8,800. 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-a.	If the company debited Accounts Receivable and credited Sales for $1,140,000 during the year, what is the total amount of credits recorded in Accounts Receivable during the year?

4-b.

What does the amount of these credits represent?

	Payment to suppliers
	Cash sales
	Credit sales
	Total sales
	Cash collections from customers

5-a.	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?

5-b.

What does this adjustment represent?

	Cash payments > Cash collected
	Cash collected from customers > Credit sales
	Cash collected from customers < Credit sales

6-a.	If the company debited cost of goods sold and credited inventory for $760,000 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?

6-c.

What does the amount of these debits represent?

	Cash collections
	Sales
	Supplier payments
	Purchase

7-a.	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?

7-b.

What does this amount represent?

	Cash paid to suppliers < Cost of goods sold
	Cash paid to suppliers > Cost of goods sold
	Cash paid to suppliers > Purchases

8-a.	If the company debited income tax expense and credited income taxes payable $1,420 during the year, what is the total amount of the debits recorded in the Income Taxes Payable account?

8-b.

What does the amount of these debits represent?

	Cash paid for income taxes
	Tax refunds
	Taxes payable

9-a.	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?

9-b.

What does this adjustment represent?

	Tax paid > Income tax expenses
	No taxes are payable
	Tax paid < Income tax expenses

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?