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    Tutorial 10 Qs

    Uploaded by

    Dylan Rabin Pereira
    This document contains several practice problems and examples related to preparing statements of cash flows using the direct method. Specifically, it provides: 1) A list of cash flow items to categorize as operating, investing, financing, or non-cash. 2) An example of preparing the operating activities section of a statement of cash flows for a learning center using the direct method. 3) An example of preparing the entire statement of cash flows for a corporation using the direct method, with additional data provided. 4) Practice problems computing specific cash flow items like collections from customers and payments to suppliers using the direct method.

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    Tutorial 10 Qs

    Uploaded by

    Dylan Rabin Pereira
    79 views4 pages
    This document contains several practice problems and examples related to preparing statements of cash flows using the direct method. Specifically, it provides: 1) A list of cash flow items to categorize as operating, investing, financing, or non-cash. 2) An example of preparing the operating activities section of a statement of cash flows for a learning center using the direct method. 3) An example of preparing the entire statement of cash flows for a corporation using the direct method, with additional data provided. 4) Practice problems computing specific cash flow items like collections from customers and payments to suppliers using the direct method.

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    Lecture

    Original Title

    Tutorial 10 Qs (1)

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    This document contains several practice problems and examples related to preparing statements of cash flows using the direct method. Specifically, it provides: 1) A list of cash flow items to categorize as operating, investing, financing, or non-cash. 2) An example of preparing the operating activities section of a statement of cash flows for a learning center using the direct method. 3) An example of preparing the entire statement of cash flows for a corporation using the direct method, with additional data provided. 4) Practice problems computing specific cash flow items like collections from customers and payments to suppliers using the direct method.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    79 views4 pages

    Tutorial 10 Qs

    Uploaded by

    Dylan Rabin Pereira
    This document contains several practice problems and examples related to preparing statements of cash flows using the direct method. Specifically, it provides: 1) A list of cash flow items to categorize as operating, investing, financing, or non-cash. 2) An example of preparing the operating activities section of a statement of cash flows for a learning center using the direct method. 3) An example of preparing the entire statement of cash flows for a corporation using the direct method, with additional data provided. 4) Practice problems computing specific cash flow items like collections from customers and payments to suppliers using the direct method.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 4

    Tutorial Questions

    S16-2 Classifying items on the statement of cash flows


    Learning Objective 1

    Cash flow items must be categorized into one of four categories. Identify each item as operating
    (O), investing (I), financing (F), or non-cash (N).
    a. Cash purchase of merchandise inventory
    b. Cash payment of dividends
    c. Cash receipt from the collection of long-term notes receivable
    d. Cash payment for income taxes
    e. Purchase of equipment in exchange for notes payable
    f. Cash receipt from the sale of land
    g. Cash received from borrowing money
    h. Cash receipt for interest income
    i. Cash receipt from the issuance of common stock
    j. Cash payment of salaries

    S16A-12 Preparing operating activities using the direct method


    Learning Objective 4
    Appendix 16A

    Miss Ella’s Learning Center has assembled the following data for the year ended June 30, 2016:

    Prepare the operating activities section of the business’s statement of cash flows for the year
    ended June 30, 2016, using the direct method.
    E16A-28 Preparing the statement of cash flows—direct method

    The income statement and additional data of Rolling Hills Corporation follow:

    a. Collections from customers are $14,000 more than sales.


    b. Dividend revenue, interest expense, and income tax expense equal their cash amounts.
    c. Payments to suppliers are the sum of cost of goods sold plus advertising expense.
    d. Payments to employees are $1,500 more than salaries expense.
    e. Cash payment for the acquisition of plant assets is $108,000.
    f. Cash receipts from sale of land total $25,000.
    g. Cash receipts from issuance of common stock total $31,000.
    h. Payment of long-term notes payable is $17,000.
    i. Payment of dividends is $12,000.
    j. Cash balance at June 30, 2015, was $28,000; at June 30, 2016, it was $24,000.

    Prepare Rolling Hills Corporation’s statement of cash flows for the year ended June 30,
    2016. Use the direct method.
    E16A-29 Computing cash flow items—direct method

    Consider the following facts:


    a. Beginning and ending Accounts Receivable are $25,000 and $27,000, respectively. Credit
    sales for the period total $68,000.
    b. Cost of goods sold is $81,000.
    c. Beginning Merchandise Inventory balance is $25,000, and ending Merchandise Inventory
    balance is $26,000.
    d. Beginning and ending Accounts Payable are $13,000 and $10,000, respectively.

    Requirements
    1. Compute cash collections from customers.
    2. Compute cash payments for merchandise inventory.

    E16A-30 Computing cash flow items—direct method

    Elite Mobile Homes reported the following in its financial statements for the year ended
    December 31, 2016:

    Requirements
    1. Compute the collections from customers.
    2. Compute payments for merchandise inventory.
    3. Compute payments of operating expenses.
    4. Compute the acquisitions of property and equipment (no sales of property during 2016).
    5. Compute the amount of borrowing, with Elite paying no long-term liabilities.
    6. Compute the cash receipt from issuance of common stock.
    7. Compute the payment of cash dividends.

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