Cash Flows from Operating Activities-Indirect Method the Data Below AreComplete the Partial Statement of Cash Flows for the Year

The Answer of Cash Flows from Operating Activities-Indirect Method the Data Below AreComplete the Partial Statement of Cash Flows for the Year

Cash Flows from Operating Activities-Indirect Method the Data Below AreComplete the Partial Statement of Cash Flows for the Year

The Answer of Cash Flows from Operating Activities-Indirect Method the Data Below AreComplete the Partial Statement of Cash Flows for the Year

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Cash Flows from Operating Activities-Indirect Method
the Data Below Are

question 85

Essay

Cash flows from operating activities-indirect method
The data below are taken from the financial statements of the Rutherford Corporation:
$\begin{array}{|l|r|r|}\hline \text { Income Statement: } & {\mathbf{2 0 0 9}} \\\hline & \\\hline \text { Net income } & \$ 840,000\\\hline \text { Depreciation expense } & 170,000 \\\hline \text { Amortization of patent } &30,000 \\\hline \text { Gain on sale of equipment } & 110,000 \\\hline\\\hline \text { Balance Sheet: } & \mathbf{1 2 / 3 1 / 0 9} & \mathbf{1 2 / 3 1 / 0 8} \\\hline & & \\\hline \text { Accounts receivable } & \$ 710,000 & \$ 680,000 \\\hline \text { Inventory } & 840,000 & 800,000 \\\hline \text { Prepaid expenses } & 30,000 & 35,000 \\\hline \text { Accounts payable } & 660,000 & 630,000 \\\hline \text { Accrued expenses payable } & 430,000 & 440,000 \\\hline\end{array}$
Complete the partial statement of cash flows for the year ended December 31, 2009, showing the computation of net cash flows from operating activities by the indirect method:
$Cash flows from operating activities-indirect method The data below are taken from the financial statements of the Rutherford Corporation: \begin{array}{|l|r|r|}\hline \text { Income Statement: } & {\mathbf{2 0 0 9}} \\ \hline & \\ \hline \text { Net income } & \$ 840,000\\ \hline \text { Depreciation expense } & 170,000 \\ \hline \text { Amortization of patent } &30,000 \\ \hline \text { Gain on sale of equipment } & 110,000 \\ \hline\\ \hline \text { Balance Sheet: } & \mathbf{1 2 / 3 1 / 0 9} & \mathbf{1 2 / 3 1 / 0 8} \\ \hline & & \\ \hline \text { Accounts receivable } & \$ 710,000 & \$ 680,000 \\ \hline \text { Inventory } & 840,000 & 800,000 \\ \hline \text { Prepaid expenses } & 30,000 & 35,000 \\ \hline \text { Accounts payable } & 660,000 & 630,000 \\ \hline \text { Accrued expenses payable } & 430,000 & 440,000 \\ \hline \end{array} Complete the partial statement of cash flows for the year ended December 31, 2009, showing the computation of net cash flows from operating activities by the indirect method:$

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Definitions:

Material Quantity Variance

The difference between the actual quantity of materials used in production and the standard quantity expected, multiplied by the standard cost per unit.

Labor Rate Variance

The difference between the actual cost of labor and the budgeted or standard cost, attributable to paying a higher or lower wage rate than anticipated.

Variable Overhead

Costs of production that fluctuate with the level of output, such as utilities or raw materials.

Direct Labor-hours

Represents the total hours worked directly on the production of goods, important for calculating the labor cost per unit.