ANSWER THE QUESTION BELOW FROM 1-15 Ravenna Company is a merchandiser that uses

Question

ANSWER THE QUESTION BELOW FROM 1-15

Ravenna Company is a merchandiser that uses the indirect method to prepare the operating activities section of its statement of cash flows. Its balance sheet for this year is as follows:

During the year, Ravenna paid a $15,000 cash dividend and it sold a piece of equipment for $7,500 that had originally cost $18,000 and had accumulated depreciation of $12,000. The company did not retire any bonds or repurchase any of its own common stock during the year.

PLEASE ANSWER ALL THE QUESTIONS FROM 1 -15

1.What is the amount of the net increase or decrease in cash and cash equivalents that would be shown on the company’s statement of cash flows?

2.What net income would the company include on its statement of cash flows?

3.How much depreciation would the company add to net income on its statement of cash flows?

4.a) If the company debited Accounts Receivable and credited Sales for $1,440,000 during the year, what is the total amount of credits recorded in Accounts Receivable during the year?

4-b.What does the amount of these credits represent?

            Credit sales

            Cash sales

            Payment to suppliers

            Cash collections from customers

            Total sales

5a) What is the amount and direction (+ or ) of the accounts receivable adjustment to net income in the operating activities section of the statement of cash flows?

b) What does this adjustment represent?

            Cash collected from customers > Credit sales

            Cash collected from customers < Credit sales

            Cash payments > Cash collected

6-a.      If the company debited cost of goods sold and credited inventory for $1,000,000 during the year, what is the total amount of inventory purchases recorded on the debit side of the Inventory T-account and the credit side of the Accounts Payable T-account?

6-b. What is the total amount of the debits recorded in the Accounts Payable T-account during the year?

6-c.      What does the amount of these debits represent?      

            Purchases

            Cash collections

            Supplier payments

            Sales

7a) What is the combined amount and direction (+ or ) of the inventory and accounts payable adjustments to net income in the operating activities section of the statement of cash flows?

7-b.      What does this amount represent?

            Cash paid to suppliers < Cost of goods sold

            Cash paid to suppliers > Cost of goods sold

            Cash paid to suppliers > Purchases

8-a. If the company debited income tax expense and credited income taxes payable $1,900 during the year, what is the total amount of the debits recorded in the Income Taxes Payable account?

8-b.      What does the amount of these debits represent?

            Cash paid for income taxes

            Tax refunds

            Taxes payable

9-a. What is the amount and direction (+ or ) of the income taxes payable adjustment to net income in the operating activities section of the statement of cash flows?

9-b.      What does this adjustment represent?

            No taxes are payable

            Tax paid > Income tax expenses

            Tax paid < Income tax expenses

10.Would the operating activities section of the company’s statement of cash flows contain an adjustment for a gain or a loss? What would be the amount and effect of the adjustment?

11.What is the amount of net cash provided by (used in) operating activities in the company’s statement of cash flows?

12.What is the amount of gross cash outflows reported in the investing section of the company’s statement of cash flows?

13.What is the company’s net cash provided by (used in) investing activities?

14.What is the amount of gross cash inflows reported in the financing section of the company’s statement of cash flows?

15.What is the company’s net cash provided by (used in) financing activities?

PLEASE ANSWER ALL THE QUESTIONS FROM 1 -15

ANSWER THE QUESTION BELOW FROM 1-15

Ravenna Company is a merchandiser that uses the indirect method to prepare the operating activities section of its statement of cash flows. Its balance sheet for this year is as follows:

Explanation / Answer

(2) Net income = $151,000 + $15,000 - $142,000 = $24,000

(3) Depreciation Expense = $120,000 - $87,500 + $12,000 = $44,5000

(4a) Total amount of credit recorded = 110000 + 1440000 - 102000 = $14,48,000

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