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sleet_krkn [62]
3 years ago
12

Burns Corporation's net income last year was $98,300. Changes in the company's balance sheet accounts for the year appear below:

Increases (Decreases) Asset and Contra-Asset Accounts: Cash and cash equivalents $ 20,500 Accounts receivable $ 13,400 Inventory $ (16,500 ) Prepaid expenses $ 4,400 Long-term investments $ 10,300 Property, plant, and equipment $ 74,900 Accumulated depreciation $ 32,200 Liability and Equity Accounts: Accounts payable $ (18,700 ) Accrued liabilities $ 17,100 Income taxes payable $ 4,300 Bonds payable $ (64,800 ) Common stock $ 42,800 Retained earnings $ 94,100 The company did not dispose of any property, plant, and equipment, sell any long-term investments, issue any bonds payable, or repurchase any of its own common stock during the year. The company declared and paid a cash dividend of $4,200. Required: a. Prepare the operating activities section of the company's statement of cash flows for the year. (Use the indirect method.) b. Prepare the investing activities section of the company's statement of cash flows for the year. c. Prepare the financing activities section of the company's statement of cash flows for the year.
Business
1 answer:
klio [65]3 years ago
4 0

Answer:

a. $131,900

b. -$85,200

c. -$26,200

Explanation:

The preparation of the Cash Flows from Operating Activities—Indirect Method is shown below:

a. Cash flow from Operating activities - Indirect method

Net income $98,300

Adjustment made:

Add : Depreciation expense $32,200

Less: Increase in accounts receivable -$13,400

Add: Decrease in inventory $16,500

Less: Decrease in accounts payable -$18,700

Add: Increase in income tax payable $4,300

Add: Increase in accrued liabilities$17,100

Less: Increase in prepaid expenses -$4,400

Total of Adjustments $33,600

Net Cash flow from Operating activities $131,900

b. Cash flow from Investing activities  

Purchase of Long-term investments - $10,300

Purchase of Property, plant, and equipment -$74,900

Net Cash flow from Investing activities -$85,200

c. Cash flow from Financing activities  

Cash dividends declared and paid -$4,200

Repayment of bonds payable -$64,800

Issuance of common stock $42,800

Net Cash flow from Financing activities -$26,200

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D. Helps managers to act rapidly and with autonomy

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Therefore the management control system provides to work with sovereignty so that the work runs in a smooth and inefficient and effective manner. It also helps the managers to take the action quickly before things go out of control.

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Unity of command provides that an employee is responsible to only one supervisor, who in turn is responsible to another supervisor, and so on up the organizational hierarchy.

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Operating Income                                                             <u>$18,900</u>

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