I can\'t find the errors in my work can you help? Suppose the income statement f
ID: 2472899 • Letter: I
Question
I can't find the errors in my work can you help? Suppose the income statement for Goggle Company reports $115 of net income, after deducting depreciation of $30. The company bought equipment costing $85 and obtained a long-term bank loan for $90.
Calculate the change in each balance sheet account and indicate whether each account relates to operating, investing, and/or financing activities (+ for increase and ? for decrease). (Select "NE" if there is no effect. Enter all amounts as positive values.)
Prepare a statement of cash flows using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)
Required: 1.Calculate the change in each balance sheet account and indicate whether each account relates to operating, investing, and/or financing activities (+ for increase and ? for decrease). (Select "NE" if there is no effect. Enter all amounts as positive values.)
Previous Year Current Year Change Type Cash $40 $275 + 235 Operating Accounts Receivable 80 185 + 105 Operating Inventory 285 140 - 145 Operating Equipment 525 610 + 85 Investing Accumulated Depreciation - Equipment (40) (70) - 30 Operating Total $890 $1,140 Salaries and Wages Payable $15 $60 + 45 Operating Notes Payable (long-term) 450 540 + 90 Financing Common Stock 15 15 - Financing Retained Earnings 410 525 + 115 Operating Total $890 $1,140Explanation / Answer
GOGGLE COMPANY
Statement of Cash Flows
For the Year Ended December 31
Cash flows from operating activities;
Net Income
115
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities
Depreciation Expenses
30
Changes in Current Assets and Current Liabilities
Less : Increase in Accounts Receivable
(105)
Add : Decrease in Inventory
145
Add : Increase in Salaries and Wages Payable
45
115
Net cash provided by operating activities
230
Cash flows from investing activities:
Equipment Purchased
(85)
Net cash used by investing activities
(85)
Cash flows from financing activities:
Proceeds from Notes Payable (long-term)
90
Net cash provided financing activities
90
Net Decrease in cash
235
Add : Cash balance, at the beginning
40
Cash balance, at the end
275
GOGGLE COMPANY
Statement of Cash Flows
For the Year Ended December 31
Cash flows from operating activities;
Net Income
115
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities
Depreciation Expenses
30
Changes in Current Assets and Current Liabilities
Less : Increase in Accounts Receivable
(105)
Add : Decrease in Inventory
145
Add : Increase in Salaries and Wages Payable
45
115
Net cash provided by operating activities
230
Cash flows from investing activities:
Equipment Purchased
(85)
Net cash used by investing activities
(85)
Cash flows from financing activities:
Proceeds from Notes Payable (long-term)
90
Net cash provided financing activities
90
Net Decrease in cash
235
Add : Cash balance, at the beginning
40
Cash balance, at the end
275
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