Exam 29: The Direct Method of Determining the Net Cash Provided by Operating Activities

The changes in Tener Company's balance sheet account balances for last year appear below: The company's income statement for the year appears below: The company declared and paid $67,000 in cash dividends during the year. It did not dispose of any property, plant, and equipment during the year. The company uses the direct method to determine the net cash provided by operating activities. -On the statement of cash flows,the selling and administrative expense adjusted to a cash basis would be:

Under the direct method of determining the net cash provided by operating activities on the statement of cash flows,an increase in accounts payable would be added to cost of goods sold to convert cost of goods sold to a cash basis.

Prejean Corporation's most recent comparative balance sheet and income statement appear below: Cash dividends were $32.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:

Kelln Corporation's most recent comparative balance sheet and income statement appear below: The company paid a cash dividend and it did not dispose of any property, plant, and equipment. The company did not issue 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)operating activities for the year was:

Baldock Corporation's balance sheet and income statement appear below: Cash dividends were $23.The company sold equipment for $14 that was originally purchased for $10 and that had accumulated depreciation of $10.The net cash provided by (used in)operating activities for the year was:

Alkine Company's comparative balance sheet appears below: Alkine reported the following net income for the year: Dividends were declared and paid during the year. A gain of $8,000 was recorded on the sale of the long-term investments. The company did not purchase any long-term investments or dispose of any property, plant, and equipment during the year. It also did not issue any bonds payable or repurchase any of its own common stock. -Under the direct method,the sales adjusted to a cash basis would be:

The following information is taken from the operating activities section of the statement of cash flows for the Parks Company for the year just ended: The following information is taken from the company's income statement for the year just ended: Required: a.For each of the adjustments to convert net income to the cash basis,indicate whether the account increased or decreased. b.Determine the net cash provided by operating activities using the direct method.You need not prepare the formal operating activities section of the statement of cash flows but you should show the adjustments that must be made to sales,expenses,and so forth and the cash flow balances of sales,expenses,etc.

Under the direct method of determining net cash provided by operating activities on the statement of cash flows,the net income figure is adjusted for changes in current assets and liabilities.

Kren Corporation's balance sheet and income statement appear below: Cash dividends were $35.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 in good form using the direct method.

Severn Corporation prepares its statement of cash flows using the direct method.Last year,Severn reported Income Tax Expense of $27,000.At the beginning of last year,Severn had a $2,000 balance in the Income Taxes Payable account.At the end of last year,Severn had a $5,000 balance in the account.On its statement of cash flows for last year,what amount should Severn have shown for its Income Tax Expense adjusted to a cash basis (i.e. ,income taxes paid)?

Alkine Company's comparative balance sheet appears below: Alkine reported the following net income for the year: Dividends were declared and paid during the year. A gain of $8,000 was recorded on the sale of the long-term investments. The company did not purchase any long-term investments or dispose of any property, plant, and equipment during the year. It also did not issue any bonds payable or repurchase any of its own common stock. -The net cash provided (used)by operating activities would be:

The most recent balance sheet and income statement of Woodside Corporation appear below: Cash dividends were $13.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:

The changes in Tener Company's balance sheet account balances for last year appear below: The company's income statement for the year appears below: The company declared and paid $67,000 in cash dividends during the year. It did not dispose of any property, plant, and equipment during the year. The company uses the direct method to determine the net cash provided by operating activities. -On the statement of cash flows,the income tax expense adjusted to a cash basis would be:

Van Aalst Company's comparative balance sheet and income statement for last year appear below: The company declared and paid $77,000 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 operating activities. -On the statement of cash flows,the income tax expense adjusted to a cash basis would be:

Carston Company's comparative balance sheet and income statement for last year appear below: The company declared and paid $27,000 in cash dividends during the year.It did not dispose of any property,plant,and equipment during the year. Required: Construct in good form the operating activities section of the company's statement of cash flows for the year using the direct method.

During the year the balance in the Inventory account increased by $4,000.In order to adjust the company's net income to a cash basis using the direct method on the statement of cash flows,it would be necessary to:

The changes in Tener Company's balance sheet account balances for last year appear below: The company's income statement for the year appears below: The company declared and paid $67,000 in cash dividends during the year. It did not dispose of any property, plant, and equipment during the year. The company uses the direct method to determine the net cash provided by operating activities. -On the statement of cash flows,the sales revenue adjusted to a cash basis would be:

Alkine Company's comparative balance sheet appears below: Alkine reported the following net income for the year: Dividends were declared and paid during the year. A gain of $8,000 was recorded on the sale of the long-term investments. The company did not purchase any long-term investments or dispose of any property, plant, and equipment during the year. It also did not issue any bonds payable or repurchase any of its own common stock. -Under the direct method,the cost of goods sold adjusted to a cash basis would be:

Wesi Corporation prepares its statement of cash flows using the direct method.Which of the following should Wesi classify as an operating activity on its statement?

Bennett Company reported sales on its income statement last year of $345,000.On the company's statement of cash flows,sales adjusted to a cash basis were $337,000.(The company uses the direct method to determine the net cash provided by operating activities. )Bennett Company reported the following account balances on its comparative balance sheet: Based on this information,the beginning Accounts Receivable balance was: