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Marina86 [1]
2 years ago
11

The following is the operating section of the statement of cash flows (direct method) of Battery Builders, Inc.: Collections fro

m customers $ 28,000 Payments to suppliers for inventory purchases (13,000 ) Payments for operating expenses (9,000 ) Payments for income taxes (2,260 ) Cash provided by operating activities 3,740 The following information is obtained from the income statement of Battery Builders: Net income $ 6,740 Depreciation expense 4,000 In addition, the following information is obtained from the comparative balance sheets of Battery Builders (decreases in parentheses): Change in accounts receivable $ 3,000 Change in inventory 3,000 Change in accounts payable 2,000 Change in accrued payables (related to operating expense) (2,000 ) Change in income taxes payable (1,000 ) Required: Prepare a complete accrual-basis income statement for the current year. Compute the cash flows from operations using the indirect approach (that is, start with accrual-basis net income and adjust for various items to obtain cash flows from operations).
Business
1 answer:
Marizza181 [45]2 years ago
6 0

Answer and Explanation:

The computation is shown below:

Sales ($28,000 + $3,000)  $31,000

Less: Cost of goods sold  ($13,000 + $2,000 - $3,000)  -$12,000

Operating expenses($9,000 - $2,000)  -$7,000

Depreciation expense -$4,000

Income tax expense  ($4,000 + $1,000)  -$5,000

Amortization expense -$1,000

Gain on sale of equipment $2,000

Net income $4,000

2.  

Net income $4,000

Add:  

Depreciation $4,000

Write-off of intangibles $1,000

Less:  

Gain on sale of equipment -$2,000

Cash flow before working capital changes  $7,000

Increase in accounts receivable -$3,000

Increase in inventory -$3000

Increase in accounts payable $2000

Decrease in accrued payable -$2000

Increase in deferred income taxes payable $1,000

Net Cash from Operations $2,000

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If the economy is at potential output and the fed increases the money supply, in the long run real gdp will likely decrease.

<h3><u>What is supply?</u></h3>
  • A basic economic notion called supply refers to the total amount of a particular commodity or service that is made available to consumers.
  • When shown as a graph, supply can refer to the quantity that is offered at a particular price or the quantity that is offered over a range of prices.
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Trends in supply and demand are what underpin the modern economy. Based on price, utility, and personal choice, any particular commodity or service will have its own unique supply and demand patterns.

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