(a) Introduction: Direct method is used to record cash flows from operations. It includes Cash flows arising from collections of cash from the customers and payments of cash to suppliers, employees and others. It also includes cash outflows related to income tax and interest paid. To state: Cash flows from operating activities under direct method.

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Answer 1

Question

Chapter 12, Problem 20E

To determine

(a)

Introduction:

Direct method is used to record cash flows from operations. It includes Cash flows arising from collections of cash from the customers and payments of cash to suppliers, employees and others. It also includes cash outflows related to income tax and interest paid.

To state:

Cash flows from operating activities under direct method.

2.

To determine

Introduction:

Cash flow from operations measure cash flows related to day-to-day activities. Operating income and operating expenses for the year forms the part of operating activities. It includes cash flows related to buying and selling of goods and services.

To state:

Despite net loss, how was the company able to report positive cash flows from operations.

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You can determine a company’s cash situation by analyzing the cash flow statement. The cash flow statement also helps determine whether the company (1) is generating enough cash from its operations to make new investments and pay dividends or (2) will need to generate cash by issuing new debt or selling its assets. Which of the following is true for the statement of cash flows? It reflects cash generated and used during the reporting period. It reflects revenues when earned. Three categories of activities (operating, investing, and financing) generate or use the cash flow in a company. In the following table, identify which type of activity is described by each statement. Operating Activity Investing Activity Financing Activity A company reports a 10% increase in its accounts payable from the last month. D and W Co. sells its last season’s inventory to a discount store. Yum Brands distributes dividends to its…

Answer 2

Question

Chapter 12, Problem 20E

To determine

(a)

Introduction:

Direct method is used to record cash flows from operations. It includes Cash flows arising from collections of cash from the customers and payments of cash to suppliers, employees and others. It also includes cash outflows related to income tax and interest paid.

To state:

Cash flows from operating activities under direct method.

2.

To determine

Introduction:

Cash flow from operations measure cash flows related to day-to-day activities. Operating income and operating expenses for the year forms the part of operating activities. It includes cash flows related to buying and selling of goods and services.

To state:

Despite net loss, how was the company able to report positive cash flows from operations.

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Answer 3

Question

Chapter 12, Problem 20E

To determine

(a)

Introduction:

Direct method is used to record cash flows from operations. It includes Cash flows arising from collections of cash from the customers and payments of cash to suppliers, employees and others. It also includes cash outflows related to income tax and interest paid.

To state:

Cash flows from operating activities under direct method.

2.

To determine

Introduction:

Cash flow from operations measure cash flows related to day-to-day activities. Operating income and operating expenses for the year forms the part of operating activities. It includes cash flows related to buying and selling of goods and services.

To state:

Despite net loss, how was the company able to report positive cash flows from operations.

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Answer 4

Question

Chapter 12, Problem 20E

To determine

(a)

Introduction:

Direct method is used to record cash flows from operations. It includes Cash flows arising from collections of cash from the customers and payments of cash to suppliers, employees and others. It also includes cash outflows related to income tax and interest paid.

To state:

Cash flows from operating activities under direct method.

2.

To determine

Introduction:

Cash flow from operations measure cash flows related to day-to-day activities. Operating income and operating expenses for the year forms the part of operating activities. It includes cash flows related to buying and selling of goods and services.

To state:

Despite net loss, how was the company able to report positive cash flows from operations.

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Answer 5

Chapter 12, Problem 20E

To determine

(a)

Introduction:

Direct method is used to record cash flows from operations. It includes Cash flows arising from collections of cash from the customers and payments of cash to suppliers, employees and others. It also includes cash outflows related to income tax and interest paid.

To state:

Cash flows from operating activities under direct method.

2.

To determine

Introduction:

Cash flow from operations measure cash flows related to day-to-day activities. Operating income and operating expenses for the year forms the part of operating activities. It includes cash flows related to buying and selling of goods and services.

To state:

Despite net loss, how was the company able to report positive cash flows from operations.

Answer 6

Chapter 12, Problem 20E

To determine

(a)

Introduction:

Direct method is used to record cash flows from operations. It includes Cash flows arising from collections of cash from the customers and payments of cash to suppliers, employees and others. It also includes cash outflows related to income tax and interest paid.

To state:

Cash flows from operating activities under direct method.

Answer 7

Chapter 12, Problem 20E

To determine

(a)

Introduction:

Direct method is used to record cash flows from operations. It includes Cash flows arising from collections of cash from the customers and payments of cash to suppliers, employees and others. It also includes cash outflows related to income tax and interest paid.

To state:

Cash flows from operating activities under direct method.

Answer 8

2.

To determine

Introduction:

Cash flow from operations measure cash flows related to day-to-day activities. Operating income and operating expenses for the year forms the part of operating activities. It includes cash flows related to buying and selling of goods and services.

To state:

Despite net loss, how was the company able to report positive cash flows from operations.

Answer 9

2.

To determine

Introduction:

Cash flow from operations measure cash flows related to day-to-day activities. Operating income and operating expenses for the year forms the part of operating activities. It includes cash flows related to buying and selling of goods and services.

To state:

Despite net loss, how was the company able to report positive cash flows from operations.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. 12 - Compare the purposes of the income statement, the...Ch. 12 - What information does the statement of cash flows...Ch. 12 - Prob. 3Q Ch. 12 - What are the major categories of business...Ch. 12 - Prob. 5Q Ch. 12 - Prob. 6Q Ch. 12 - Prob. 7Q Ch. 12 - Prob. 8Q Ch. 12 - Prob. 9Q Ch. 12 - Prob. 10Q

Solution Summary: The author explains that direct method is used to record cash flows from operations. It includes cash outflows related to income tax and interest paid.

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Chapter 12 Solutions