Ravenna Company is a merchandiser that uses the indirect method to prepare the operating activities...
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Accounting
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
$
61,000
$
72,650
Accounts receivable
51,200
55,000
Inventory
68,700
62,500
Total current assets
180,900
190,150
Property, plant, and equipment
186,000
175,000
Less accumulated depreciation
62,000
43,750
Net property, plant, and equipment
124,000
131,250
Total assets
$
304,900
$
321,400
Accounts payable
$
40,000
$
71,200
Income taxes payable
31,200
36,700
Bonds payable
75,000
62,500
Common stock
87,500
75,000
Retained earnings
71,200
76,000
Total liabilities and stockholders equity
$
304,900
$
321,400
During the year, Ravenna paid a $7,500 cash dividend and it sold a piece of equipment for $3,750 that had originally cost $7,800 and had accumulated depreciation of $5,200. The company did not retire any bonds or repurchase any of its own common stock during the year.
1.
value: 10.00 points
Required information
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?
References
eBook & Resources
WorksheetLearning Objective: 14-01 Classify cash inflows and outflows as relating to operating, investing, or financing activities.
Difficulty: 2 MediumLearning Objective: 14-02 Prepare a statement of cash flows using the indirect method to determine the net cash provided by operating activities.
Check my work
2.
value: 10.00 points
Required information
2.
What net income would the company include on its statement of cash flows?
rev: 12_09_2014_QC_CS-1017
References
eBook & Resources
WorksheetLearning Objective: 14-01 Classify cash inflows and outflows as relating to operating, investing, or financing activities.
Difficulty: 2 MediumLearning Objective: 14-02 Prepare a statement of cash flows using the indirect method to determine the net cash provided by operating activities.
Check my work
3.
value: 10.00 points
Required information
3.
How much depreciation would the company add to net income on its statement of cash flows?
References
eBook & Resources
WorksheetLearning Objective: 14-01 Classify cash inflows and outflows as relating to operating, investing, or financing activities.
Difficulty: 2 MediumLearning Objective: 14-02 Prepare a statement of cash flows using the indirect method to determine the net cash provided by operating activities.
Check my work
4.
value: 10.00 points
Required information
4-a.
If the company debited Accounts Receivable and credited Sales for $750,000 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?
Cash sales
Credit sales
Total sales
Payment to suppliers
Cash collections from customers
References
eBook & Resources
WorksheetLearning Objective: 14-01 Classify cash inflows and outflows as relating to operating, investing, or financing activities.
Difficulty: 2 MediumLearning Objective: 14-02 Prepare a statement of cash flows using the indirect method to determine the net cash provided by operating activities.
Check my work
5.
value: 10.00 points
Required information
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 collected from customers > Credit sales
Cash collected from customers < Credit sales
Cash payments > Cash collected
References
eBook & Resources
WorksheetLearning Objective: 14-01 Classify cash inflows and outflows as relating to operating, investing, or financing activities.
Difficulty: 2 MediumLearning Objective: 14-02 Prepare a statement of cash flows using the indirect method to determine the net cash provided by operating activities.
Check my work
6.
value: 10.00 points
Required information
6-a.
If the company debited cost of goods sold and credited inventory for $500,000 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
Purchases
References
eBook & Resources
WorksheetLearning Objective: 14-01 Classify cash inflows and outflows as relating to operating, investing, or financing activities.
Difficulty: 2 MediumLearning Objective: 14-02 Prepare a statement of cash flows using the indirect method to determine the net cash provided by operating activities.
Check my work
7.
value: 10.00 points
Required information
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
References
eBook & Resources
WorksheetLearning Objective: 14-01 Classify cash inflows and outflows as relating to operating, investing, or financing activities.
Difficulty: 2 MediumLearning Objective: 14-02 Prepare a statement of cash flows using the indirect method to determine the net cash provided by operating activities.
Check my work
8.
value: 10.00 points
Required information
8-a.
If the company debited income tax expense and credited income taxes payable $910 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
References
eBook & Resources
WorksheetLearning Objective: 14-01 Classify cash inflows and outflows as relating to operating, investing, or financing activities.
Difficulty: 2 MediumLearning Objective: 14-02 Prepare a statement of cash flows using the indirect method to determine the net cash provided by operating activities.
Check my work
9.
value: 10.00 points
Required information
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
References
eBook & Resources
WorksheetLearning Objective: 14-01 Classify cash inflows and outflows as relating to operating, investing, or financing activities.
Difficulty: 2 MediumLearning Objective: 14-02 Prepare a statement of cash flows using the indirect method to determine the net cash provided by operating activities.
Check my work
10.
value: 10.00 points
Required information
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 effect of the adjustment?
References
eBook & Resources
WorksheetLearning Objective: 14-01 Classify cash inflows and outflows as relating to operating, investing, or financing activities.
Difficulty: 2 MediumLearning Objective: 14-02 Prepare a statement of cash flows using the indirect method to determine the net cash provided by operating activities.
Check my work
11.
value: 10.00 points
Required information
11.
What is the amount of net cash provided by (used in) operating activities in the companys statement of cash flows?
References
eBook & Resources
WorksheetLearning Objective: 14-01 Classify cash inflows and outflows as relating to operating, investing, or financing activities.
Difficulty: 2 MediumLearning Objective: 14-02 Prepare a statement of cash flows using the indirect method to determine the net cash provided by operating activities.
Check my work
12.
value: 10.00 points
Required information
12.
What is the amount of gross cash outflows reported in the investing section of the companys statement of cash flows?
References
eBook & Resources
WorksheetLearning Objective: 14-01 Classify cash inflows and outflows as relating to operating, investing, or financing activities.
Difficulty: 2 MediumLearning Objective: 14-02 Prepare a statement of cash flows using the indirect method to determine the net cash provided by operating activities.
Check my work
13.
value: 10.00 points
Required information
13.
What is the companys net cash provided by (used in) investing activities?
References
eBook & Resources
WorksheetLearning Objective: 14-01 Classify cash inflows and outflows as relating to operating, investing, or financing activities.
Difficulty: 2 MediumLearning Objective: 14-02 Prepare a statement of cash flows using the indirect method to determine the net cash provided by operating activities.
Check my work
14.
value: 10.00 points
Required information
14.
What is the amount of gross cash inflows reported in the financing section of the companys statement of cash flows?
References
eBook & Resources
WorksheetLearning Objective: 14-01 Classify cash inflows and outflows as relating to operating, investing, or financing activities.
Difficulty: 2 MediumLearning Objective: 14-02 Prepare a statement of cash flows using the indirect method to determine the net cash provided by operating activities.
Check my work
15.
value: 10.00 points
Required information
15.
What is the companys net cash provided by (used in) financing activities?
Answer & Explanation
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