Exam 31: the Direct Method of Determining the Net Cash Provided by Operating Activities

(Appendix 14A) The change in each of Kendall Corporation's balance sheet accounts last year follows: Kendall Corporation's income statement for the year was: There were no sales or retirements of property, plant, and equipment and no dividends paid during the year. The company pays no income taxes and it did not purchase any long-term investments, issue any bonds payable, or repurchase any of its own common stock. The net cash provided by (used in) operating activities on the statement of cash flows is determined using the direct method. -Using the direct method,the cost of goods sold adjusted to a cash basis would be:

Maloney Corporation's balance sheet and income statement appear below: Cash dividends were $42.The company did not dispose of any property,plant,and equipment during the year. Required: Prepare the operating activities section of the statement of cash flows using the direct method.

Freeport Corporation's income statement for last year appears below: The beginning and ending balances for last year are available for the following selected accounts (the company did not dispose of any property,plant,and equipment during the year): Ending Beginning Balance Balance Accounts receivable \ 32,000 \ 40,000 Inventory. \ 60,000 \ 50,000 Prepaid expenses \ 12,000 \ 8,000 Accumulated depreciation \ 40,000 \ 30,000 Accounts payable \ 30,000 \ 45,000 Accrued liabilities. \ 16,000 \ 10,000 Income taxes pavable \ 2,000 \ 5,000 Required: Using the direct method,prepare in good form the operating activities section of the statement of cash flows.

Dorris Corporation's balance sheet and income statement appear below: Cash dividends were $7.The company sold equipment for $18 that was originally purchased for $8 and that had accumulated depreciation of $6.The net cash provided by (used in)operating activities for the year was:

Comparative balance sheets and the income statements for Ellis Corporation are presented below: The following additional information is available for the year: * During the year,the company sold long-term investments for $35,500 that had been purchased for $38,000. * The company did not sell any property,plant,and equipment during the year or repurchase any of its own common stock. * All sales were on credit. * The company paid a cash dividend of $25,000. * The company paid cash to retire $15,000 of bonds payable. Required: a.Using the indirect method,determine the net cash provided by (used in)operating activities. b.Using the direct method,determine the net cash provided by (used in)operating activities. c.Using the net cash provided by (used in)operating activities amount from either part a or b,prepare a statement of cash flows.

(Appendix 14A) Van Beeber Corporation's comparative balance sheet and income statement for last year appear below: The company declared and paid $49,000 in cash dividends during the year. It did not sell or retire any property, plant, and equipment during the year. The company uses the direct method to determine the net cash provided by (used in) operating activities. -On the statement of cash flows,the selling and administrative expense adjusted to a cash basis would be:

Brew Corporation's most recent comparative balance sheet and income statement appear below: Cash dividends were $37.The company did not retire or sell any property,plant,and equipment during the year.The net cash provided by (used in)operating activities for the year was:

(Appendix 14A) Hayward Corporation had net sales of $610,000 and cost of goods sold of $360,000 for the just completed year. Shown below are the beginning and ending balances for the year of various accounts: The company prepares its statement of cash flows using the direct method. -On its statement of cash flows,what amount should Howard show for its cost of goods sold adjusted to a cash basis (i.e.,cash paid to suppliers)?

Carson Corporation's comparative balance sheet and income statement for last year appear below: $\text { Comparative Balance Sheet }$ Ending Beginning Balance Balance Cash. \ 20,000 \ 15,000 Accounts receivable 27,000 25,000 Inventory. 32,000 35,000 Prepaid expenses 8,000 5,000 Long-term investments 36,000 38,000 Property, plant and equipment 108,000 92,000 Less accumulated depreciation. 49,000 30,000 Total assets. \1 82,000 \1 80,000 Accounts payable \ 30,000 \ 38,000 Income taxes payable 17,000 35,000 Bonds payable 40,000 32,000 Common stock 45,000 40,000 Retained earnings 50,000 35,000 Total liabilities and stockholders' equity \ 182,000 \ 180,000 Carson did not dispose of any property,plant,and equipment during the year.It constructs its statement of cash flows using the direct method. Required: Using the direct method,prepare in good form the operating activities section of the statement of cash flows.

(Appendix 14A) The change in each of Kendall Corporation's balance sheet accounts last year follows: Kendall Corporation's income statement for the year was: There were no sales or retirements of property, plant, and equipment and no dividends paid during the year. The company pays no income taxes and it did not purchase any long-term investments, issue any bonds payable, or repurchase any of its own common stock. The net cash provided by (used in) operating activities on the statement of cash flows is determined using the direct method. -The net cash provided by (used in)financing activities would be:

(Appendix 14A) The most recent balance sheet and income statement of Oldaker Corporation appear below: The company paid a cash dividend of $42 and it did not dispose of any property, plant, and equipment. The company did not retire any bonds payable or repurchase any of its own common stock. The following questions pertain to the company's statement of cash flows. -The net cash provided by (used in)financing activities for the year was:

(Appendix 14A) Van Beeber Corporation's comparative balance sheet and income statement for last year appear below: The company declared and paid $49,000 in cash dividends during the year. It did not sell or retire any property, plant, and equipment during the year. The company uses the direct method to determine the net cash provided by (used in) operating activities. -On the statement of cash flows,the income tax expense adjusted to a cash basis would be:

Under the direct method of determining the net cash provided by (used in)operating activities on the statement of cash flows,an increase in accounts receivable would be added to sales revenue to convert revenue to a cash basis.

The most recent balance sheet and income statement of Dallavalle Corporation appear below: Cash dividends were $12.The company did not retire or sell any property,plant,and equipment during the year.The net cash provided by (used in)operating activities for the year was:

Sales reported on the income statement totaled $750,000.The beginning balance in accounts receivable was $70,000.The ending balance in accounts receivable was $80,000.Under the direct method of determining the net cash provided by (used in)operating activities on the statement of cash flows,sales adjusted to a cash basis are:

(Appendix 14A) The change in each of Kendall Corporation's balance sheet accounts last year follows: Kendall Corporation's income statement for the year was: There were no sales or retirements of property, plant, and equipment and no dividends paid during the year. The company pays no income taxes and it did not purchase any long-term investments, issue any bonds payable, or repurchase any of its own common stock. The net cash provided by (used in) operating activities on the statement of cash flows is determined using the direct method. -The net cash provided by (used in)investing activities would be:

The net cash provided by (used in)operating activities for the year was:

(Appendix 14A) Kilduff Corporation's balance sheet and income statement appear below: The company sold equipment for $19 that was originally purchased for $10 and that had accumulated depreciation of $5. The company paid a cash dividend of $44 and it did not issue any bonds payable or repurchase any of its own common stock. -The net cash provided by (used in)operating activities for the year was:

Last year Cumberland Corporation reported a cost of goods sold of $120,000.Inventories increased by $35,000 during the year,and accounts payable increased by $20,000.The company uses the direct method to determine the net cash provided by (used in)operating activities on the statement of cash flows.The cost of goods sold adjusted to a cash basis would be:

(Appendix 14A) Van Beeber Corporation's comparative balance sheet and income statement for last year appear below: The company declared and paid $49,000 in cash dividends during the year. It did not sell or retire any property, plant, and equipment during the year. The company uses the direct method to determine the net cash provided by (used in) operating activities. -On the statement of cash flows,the sales adjusted to a cash basis would be: