Ravenna Company is a merchandiser that uses the indirect method to prepare the o
ID: 2475417 • Letter: R
Question
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:
During the year, Ravenna paid a $7,800 cash dividend and it sold a piece of equipment for $3,900 that had originally cost $8,400 and had accumulated depreciation of $5,600. The company did not retire any bonds or repurchase any of its own common stock during the year.
What is the amount of the net increase or decrease in cash and cash equivalents that would be shown on the company’s statement of cash flows?
Answer: Net decrease in cash and cash equivalents 12,500
If the company debited Accounts Receivable and credited Sales for $780,000 during the year, what is the total amount of credits recorded in Accounts Receivable during the year?
If the company debited cost of goods sold and credited inventory for $520,000 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?
What is the total amount of the debits recorded in the Accounts Payable T-account during the year?
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:
Explanation / Answer
Inventory Purchases 526400
Statement of cash flows for the year Operating activities Net Income for the Year(-5000+7800) 2800 Adj. for non cash items: Add: Depreciation for the Year(64000+5600-45500) 24100 Less: Gain on sale of eqp.8400-5600-3900 -1100 23000 Add Decrease in A/cs. Rec(57200-53200) 4000 Less: Increase in Inventory(65000-71400) -6400 Less: Decrease inA/cs. Pay. (41600-74000) -32400 Less: Decrease in I.T. payable(32400-39600) -7200 Net cash used in Operating Activities -16200 Investing Activities Purchase of PP&E(182000-192000-8400) -18400 Sale of Equipment 3900 Net cash used in Investing Activities -14500 Financing Activities Issue of bonds(78000-65000) 13000 Issue of Common stock(91000-78000) 13000 Payment of dividend -7800 Net cash generated by Financing Activities 18200 -12500 Add: opening Cash balance 76900 Ending cash balance 64400Related Questions
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