Question
Reconciling Net Income and Cash Flow from Operations Using FSET For the year, Beyer GmbH had the following summary information available concerning its operating activities.
Reconciling Net Income and Cash Flow from Operations Using FSET
For the year, Beyer GmbH had the following summary information available concerning its operating activities. The company had no investing or financing activities this year.
| 1. Sales of merchandise to customers on credit | 253,700 |
| 2. Sales of merchandise to customers for cash | 45,750 |
| 3. Cost of merchandise sold on credit | 160,050 |
| 4. Cost of merchandise sold for cash | 31,700 |
| 5. Purchases of merchandise from suppliers on credit | 175,800 |
| 6. Purchases of merchandise from suppliers for cash | 23,850 |
| 7. Collections from customers on accounts receivable | 241,700 |
| 8. Cash payments to suppliers on accounts payable | 170,100 |
| 9. Operating expenses (all paid in cash) | 86,150 |
Required
a. Enter the items above into the Financial Statement Effects Template.
Note: Use negative signs with answers, when appropriate.
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b. What was the companys net income for the year?
What was the cash flow from operating activities? (Use the direct method.)
Indicate the direction and amounts by which each of the following accounts changed during the year. If the account decreased, enter as a negative number.
| 1. Accounts receivable | Answer
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| 2. Merchandise inventory | Answer
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| 3. Accounts payable | Answer
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d. Using your results above, prepare the operating activities section of the statement of cash flows using the indirect format.
Note: Use negative signs with answers, when appropriate.
| Net income | Answer
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| Change in accounts receivable | Answer
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| Change in inventories | Answer
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| Change in accounts payable | Answer
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| Cash flow from operating activities | Answer
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Financial And Managerial Accounting The Basis For Business Decisions
Authors: Jan Williams, Sue Haka, Mark S Bettner
13th Edition
0072942827, 978-0072942828
