Mgmt 210 Financial Accounting Week 7 Hw

Samire Radman_hw6

I. Brief Exercise 12-3 Three Types of Activities p. 628 **p.618**

1. Repayment of a long-term debt (F)

2. Purchase of equipment (I)

3. Collection of customer’s account (O)

4. Issuance of common stock (F)

5. Purchase of another company (I)

6. Payment of dividends (F)

7. Payment of income taxes (O)

8. Sale of equipment (I)

II. Brief Exercise 12-4 Direct versus Indirect Method p. 629 **p.618**

1. Net Income (I)

2. Increase in accounts receivable (I)

3. Collections on accounts receivable (D)

4. Payments on accounts payable (D)

5. Decrease in accounts payable (I)

6. Depreciation expense (I)

7. Gain on early retirement of bonds (I)

8. Cash sales (D)

III. Brief Exercise 12-5 Direct Method p. 618

1. $12,000

2. $6,000

3. $17,000

4. $27,000

IV. Brief Exercise 12-6 Indirect Method p. 619

1. Increase in accounts receivable (D)

2. Decrease in prepaid rent (A)

3. Decrease in inventory (A)

4. Decrease in accounts payable (D)

5. Increase in income taxes payable (A)

6. Depreciation expense (A)

7. Gain on sale of equipment (D)

8. Loss on early retirement of bonds (A)

V. Problem 12-3 Statement of Cash Flows - Direct Method p. 629 **p.628**

1. PEORIA CORP.

STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2014

Cash Flows from Operating Activities

Cash collections from customers $1,200,000

Cash payments for:

Inventory 748,000

Operating expenses 85,000

Interest 25,000

Income taxes...