Avatar Company Uses the Direct Method to Prepare Its StatementPrepare the Operating Activities Section of the Statement of Cash

The Answer of Avatar Company Uses the Direct Method to Prepare Its StatementPrepare the Operating Activities Section of the Statement of Cash

Avatar Company Uses the Direct Method to Prepare Its StatementPrepare the Operating Activities Section of the Statement of Cash

The Answer of Avatar Company Uses the Direct Method to Prepare Its StatementPrepare the Operating Activities Section of the Statement of Cash

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Avatar Company Uses the Direct Method to Prepare Its Statement

question 4

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Avatar Company uses the direct method to prepare its statement of cash flows. Refer to the following financial statement information for the year ending December 31, 2015:
$Avatar Company uses the direct method to prepare its statement of cash flows. Refer to the following financial statement information for the year ending December 31, 2015: \begin{array}{c} \text {Avatar Company }\\ \text {Income Statement }\\ \text {Year Ended December 31, 2015}\\ \begin{array}{lll} \text {Sales Revenue}\\ \text {Interest Revenue}\\ \text {Gain on Sale of Plant Assets}\\ \text {Total Revenues and Gains}\\ \text {Cost of Goods Sold}\\ \text {Salaries and Wages Expense}\\ \text {Depreciation Expense-Plant Assets}\\ \text {Other Operating Expense}\\ \text {Interest Expense}\\ \text {Income Tax Expense}\\ \text {Total expenses}\\ \text {Net Income} \end{array} \begin{array}{r} \$ 291,300 \\ 1,000 \\ \underline{6,000} \\ \$ 298,300 \\ 145,000 \\ 49,000 \\ 16,000 \\ 25,000 \\ 3,500 \\ \underline{7,800} \\ \underline{246,300} \\ \underline{\$ 52,000} \\ \end{array} \end{array} \begin{array}{c} \text {Avatar Company}\\ \text {Statement of Retained Earnings}\\ \text {Year Ended December 31, 2015}\\ \begin{array}{lll} \text {Retained Earnings, January 1, 2014}\\ \text {Add: Net income}\\ \text {Less: Dividends}\\ \text {Retained Earnings, December 31, 2014} \end{array} \begin{array}{r} \$ 78,000 \\ 52,000 \\ \underline{15,000} \\ \underline{\underline{\$ 115,000}} \\ \end{array} \end{array} Prepare the operating activities section of the statement of cash flows, using the direct method.$
$\begin{array}{c} \text {Avatar Company }\\ \text {Income Statement }\\ \text {Year Ended December 31, 2015}\\\begin{array}{lll} \text {Sales Revenue}\\ \text {Interest Revenue}\\ \text {Gain on Sale of Plant Assets}\\ \text {Total Revenues and Gains}\\ \text {Cost of Goods Sold}\\ \text {Salaries and Wages Expense}\\ \text {Depreciation Expense-Plant Assets}\\ \text {Other Operating Expense}\\ \text {Interest Expense}\\ \text {Income Tax Expense}\\ \text {Total expenses}\\ \text {Net Income}\end{array}\begin{array}{r}\$ 291,300 \\1,000 \\\underline{6,000} \\\$ 298,300 \\145,000 \\49,000 \\16,000 \\25,000 \\3,500 \\\underline{7,800} \\ \underline{246,300} \\\underline{\$ 52,000} \\\end{array}\end{array}$

$\begin{array}{c} \text {Avatar Company}\\ \text {Statement of Retained Earnings}\\ \text {Year Ended December 31, 2015}\\\begin{array}{lll} \text {Retained Earnings, January 1, 2014}\\ \text {Add: Net income}\\ \text {Less: Dividends}\\ \text {Retained Earnings, December 31, 2014} \end{array}\begin{array}{r}\$ 78,000 \\52,000 \\\underline{15,000} \\\underline{\underline{\$ 115,000}} \\ \end{array}\end{array}$

Prepare the operating activities section of the statement of cash flows, using the direct method.

Definitions:

Long Run Entry

The process by which new firms enter a market, adjusting the supply side of the market, typically considering all factors of production as variable.

Social Welfare

Programs and policies designed to enhance the well-being of individuals and communities, often through provision of health, education, and financial support.

Banned Advertising

Advertising that is prohibited by law due to being misleading, promoting harmful products, or being offensive.

Monopolistically Competitive

This term refers to market structures where many firms sell products that are similar but not identical, allowing for some degree of market power and product differentiation.