MChapter 12 HW ,,GM12-12 Computing × Inbox (1 977).jehadevv : × MACC-2013-008-Fa

Question

MChapter 12 HW ,,GM12-12 Computing × Inbox (1 977).jehadevv : × MACC-2013-008-Fall-201 7x Cezto.mheducation.com/hm.tpx pps QChapter 10 Learnsma 50 points E12-7 Preparing and Evaluating a Simple Statement of Cash Flows (ndirect Method) ILO 12-1, LO 12-2, LO 12-5 Suppose the income statement for Goggle Company reports $96 of net income, aner deducting depreciation of $35. The company bought equpment costng s60 and oblained a long-eem bank loan for $70 Required 1. Calculate the change in each balance sheet account and indicate whether each account relates to operating, investing andlor financing activities (+for increase and-for decrease) (Select "NE" if there is no effect Enter all amounts as positive values.) 351 75 260 500 (45) Accounts Receivable 175 135 5G0 (80) Equipment Total Salaries and Wages Payable Notes Payable (ong-term) Common Retained Earnings 10 $ Stock Total 825 2. Prepare a statement of cash tows using the indrect method (Amounts to be deducted should be indicated with a minus sign) Statement of Cash Flows 31 F5

Explanation / Answer

Google Company Previous Year Current year Changes Type Cash $35 $240 $205 Cash Accounts receivables $75 $175 $100 operating Inventory $260 $135 -$125 operating Equipment $500 $560 $60 investing Accumulated Depreciation -$45 -$80 -$35 operating Total $825 $1,030 Wages payable $10 $50 $40 operating Long term Debt $445 $515 $70 financing Contributed Capital $10 $10 $0 financing Retained Earnings $360 $455 $95 operating Total $825 $1,030 Google Company Statement of Cash flows For the Current Year Cash Flows from Operating Activities Net Income $95 Add: Depreciation $35 (Increase) decrease in Current Assets Accounts receivables -$100 Inventory $125 Increase (Decrease ) current liabilities Wages payable $40 Net cash provided (used) by operating activities $195 Cash Flows from Investing Activities Equipment purchased -$60 Net cash provided (used) by investing activities -$60 Cash Flows from Financing Activities Obtained long-term bank loan $70 Net cash provided (used) by financing activities $70 Net change in cash $205 Cash, Beginning $35 Cash, End $240

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