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masya89 [10]
3 years ago
13

Required information E12-3 Understanding the Computation of Cash Flows from Operating Activities (Indirect Method) [LO 12-2] [Th

e following information applies to the questions displayed below.] Suppose your company sells services for $485 cash this month. Your company also pays $340 in salaries and wages, which includes $175 that was payable at the end of the previous month and $165 for salaries and wages of this month. E12-3 Part 2, 3 and 4 Calculate the amount that should be reported as net cash flow from operating activities. Calculate the amount that should be reported as net income. Show how the indirect method would convert net income (requirement 3) to net cash flow from operating activities (requirement 2).
Business
1 answer:
kompoz [17]3 years ago
4 0

Answer:

Net income = $320

Net cash flow from Operating activity = $145

Explanation:

The journal entries are shown below:

1. Cash A/c Dr $485

        To Service revenue A/c $485

(Being sales service is provided for cash)

2. Salary expense A/c Dr $165

   Outstanding salary expense A/c Dr $175

              To Salary and wages payable A/c  $340

(Being salary expense is recorded)

Salary and wages payable A/c  $340

       To Cash $340

(Being salary and wages are paid)

The net cash flow from operating activities would be

= Service revenue - salaries and wages payable

= $485 - $340

= $145

The net income would be

= Sales - salary expense

= $485 - $165

= $320

Cash flow from Operating activities under the indirect method  

Net income $320

Less: Decrease in salary payable - $175

Net Cash flow from Operating activities $145

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natta225 [31]

Answer:

inventory value=$ 377,000.00  

Explanation:

In applying the rule of the lower cost of cost or net realizable value,we compare NRV(selling price minus cost to sell) with the replacement cost(current price), where the lower of the two is then compared against the original cost of the inventory item as done in the attached.

Value of inventory=$120,000+$126,000+$90,000+$41,000=$377,000.00  

 

Download xlsx
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3 years ago
Describe at least three ways you will implement your project to soften the impact of the issue on the community
brilliants [131]
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If the financial statements include an income statement and a balance sheet but exclude the statement of cash flows, the auditor
USPshnik [31]

Answer:

The auditor should issue a qualified report for the departure from generally accepted accounting principles.

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A company issued 6%, 10-year bonds with a face amount of $90 million. The market yield for bonds of similar risk and maturity is
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Answer:

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time 20  10 years and 2 payment per year

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time            10 years

rate             0.07

\frac{90}{(1 + 0.07)^{10} } = PV  

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PV coupon  $76.3551

PV maturity  $45.7514

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