A Firm Reported the Following in Its 2011 Financial Statements

question 122

Essay

A firm reported the following in its 2011 financial statements: $\begin{array}{lll}\text { Balance sheet } & \text { Dec.31/10 } & \text { Dec.31/11 } \\\text { Unearned rent. } & \$ 10,000 & \$ 17,000\end{array}$ Income statement Rent revenue. $\quad\quad \$ 92,000$ (a) Describe the required disclosure implied by the above information for the indirect method Statement of Cash Flows for 2001,including the reconciliation of net income and net operating cash flow.
(b) Explain as completely as possible the reasoning for your response in (a).
(c) Describe the required disclosure implied by the above information for the direct method Statement of Cash Flows for 2011,omitting any reference to the reconciliation of net income and net operating cash flow.

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Definitions:

Window Shopping

The act of looking at goods in store windows without the intention of purchasing them, usually for leisure.

Bright Light

Refers to intense light levels, often used in light therapy to treat seasonal affective disorder and regulate circadian rhythms.

Cones

The receptor cells in the retina that allow for color perception.

Light Sensitive

Having a sensitivity to light levels, often referring to materials or mechanisms that react or change in the presence of light.