Direct and Indirect Methods The comparative balance sheets and income statement of Piura Manufacturing follow. Additional transactions for 2012 were as follows: a. Cash dividends of $8,000 were paid. b. Equipment was acquired by issuing common stock with a par value of $6,000. The fair market value of the equipment is $32,000. c. Equipment with a book value of $12,000 was sold for $6,000. The original cost of the equipment was $24,000. The loss is included in operating expenses. d. Two thousand shares of preferred stock were sold for $4 per share. Required: 1. Prepare a schedule of operating cash flows using (a) the indirect method and (b) the direct method. 2. Prepare a statement of cash flows using the indirect method. 3. Prepare a statement of cash flows using a worksheet similar to the one shown in Cornerstone 15-8 (p. 643). 4. Form a group with two to four other students, and discuss the merits of the direct and indirect methods. Which do you think investors might prefer? Should the FASB require all companies to use the direct method?

Direct and Indirect Methods The comparative balance sheets and income statement of Piura Manufacturing follow.

Additional transactions for 2012 were as follows: a. Cash dividends of $8,000 were paid. b. Equipment was acquired by issuing common stock with a par value of $6,000. The fair market value of the equipment is $32,000. c. Equipment with a book value of $12,000 was sold for $6,000. The original cost of the equipment was $24,000. The loss is included in operating expenses. d. Two thousand shares of preferred stock were sold for $4 per share.

Required:

1. Prepare a schedule of operating cash flows using (a) the indirect method and (b) the direct method.

2. Prepare a statement of cash flows using the indirect method.

3. Prepare a statement of cash flows using a worksheet similar to the one shown in Cornerstone 15-8 (p. 643).

4. Form a group with two to four other students, and discuss the merits of the direct and indirect methods. Which do you think investors might prefer? Should the FASB require all companies to use the direct method?



CLICK HERE TO ORDER THIS PAPER FROM OUR WRITERS.……………………NO PLAGIARISM Get 100% Original papers from the writing experts Logo GET A PROFESSIONAL WRITER TO WORK ON THIS PAPER AND OTHER SIMILAR PAPERS

Comments

Post a Comment

Popular posts from this blog

Where to Educate? If you were a parent of a child diagnosed with a behavior problem caused by a neurological disorder such as bipolar, ADHD, or sensory processing disorder, would you want your child to be educated in the general classroom with typically-developing or non-disabled peers, or in a smaller, more restrictive environment where there is a smaller teacher-to-student ratio with other children who have similar disabilities? Provide a rationale for your decision and use outside resources to support your perspective. List at least three intervention strategies you would use, as a teacher, to include this student in your classroom. Be sure to write which age/grade-level you’ve chosen, along with the appropriate behavior intervention strategies.

Image
Where to Educate? If you were a parent of a child diagnosed with a behavior problem caused by a neurological disorder such as bipolar, ADHD, or sensory processing disorder, would you want your child to be educated in the general classroom with typically-developing or non-disabled peers, or in a smaller, more restrictive environment where there is a smaller teacher-to-student ratio with other children who have similar disabilities? Provide a rationale for your decision and use outside resources to support your perspective. List at least three intervention strategies you would use, as a teacher, to include this student in your classroom. Be sure to write which age/grade-level you’ve chosen, along with the appropriate behavior intervention strategies. CLICK HERE TO ORDER THIS PAPER FROM OUR WRITERS.……………………NO PLAGIARISM Get 100% Original papers from the writing experts GET A PROFESSIONAL WRITER TO WORK ON THIS PAPER AND OTHER SIMILAR PAPERS
Read more

Global warming has now been established as a fact by virtually all climate scientists worldwide.

Image
Global Warming Introduction: Global warming has now been established as a fact by virtually all climate scientists worldwide. Presently, the levels of greenhouse gases, such as carbon dioxide, in the atmosphere are at levels never seen before in the last 600,000 years, and that these gases are continuing to increase in the atmosphere at an alarming rate. Most recent scientific evidence shows that human activities are producing a significant part of this increase. Several years ago, a movie titled “An Inconvenient Truth” and staring Al Gore, focused on the global warming issue. This movie presents a comprehensive set of evidence that supports the notion that the earth’s atmosphere, land and ocean are warming up. Al Gore does an excellent job at presented the evidence, discussing the consequences, and offering solutions to the global warming issue. Opinions and interpretations are also given, based on the factual evidence presented. Note that a couple of years have gone by since the mak...
Read more

Planet Zindau has an equal distribution of land and water between both hemispheres.

Image
For this assignment, you are challenged to answer a series of questions about a fictional planet, Zindau, to demonstrate your understanding of Module Two’s seasonality concepts. Prompt: Our story begins in the Andromeda Galaxy. You are an inhabitant of a planet called Zindau, which is approximately the size of Earth. It orbits a star that is about the same size as the Sun. Further, the distance between these celestial bodies is approximate to the Earth and Sun. However, there are some differences: Planet Zindau has an equal distribution of land and water between both hemispheres. Planet Zindau has an axial tilt of 35 degrees. Although the perihelion and aphelion occur at about the same time as the solstices (as it does for Earth), the eccentricity of Zindau’s orbit is 10% (as compared to about 2% for Earth). The alignment of the perihelion and aphelion relative to the year is the same as that for Earth. Specifically, the following critical elements must be addressed:A...
Read more