Fashion Company Uses the Indirect Method to Prepare Its Statement

question 95

Essay

Fashion Company uses the indirect method to prepare its statement of cash flows. Refer to the following portion of the comparative balance sheet: Additional information provided by the company includes the following:
During 2014, the company repaid $60,000 of Long-Term Notes Payable.
During 2014, the company borrowed $51,000 on a new Long-Term Note Payable.
With the help of T-account format, analyze the transactions affecting the Long-Term Notes Payable account.

---

Definitions:

Architect Fees

Fees paid for professional services rendered by architects in the planning, design, and oversight of a construction project.

Excavation Fees

Charges related to the process of removing earth to form a cavity in the ground, typically in construction or mining.

Operating Efficiency

A measure of how well a company uses its resources to generate profits, indicating the effectiveness of management strategies.

Productive Life

Refers to the period of time over which an asset is expected to be useful to the owning entity in generating revenue or income.