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Portions of the financial statements for Parnell Company are provided below. PARNELL COMPANY...

Question:

Portions of the financial statements for Parnell Company are provided below.

PARNELL COMPANY
Income Statement
For the Year Ended December 31, 2016
($ in 000s)
Revenues and gains:
Sales $840
Gain on sale of buildings $12 $852
Expenses and loss:
Cost of goods sold $320
Salaries $124
Insurance $44
Depreciation $127
Interest expense $54
Loss on sale of machinery $11 $680
Income before tax $172
Income tax expense $86
Net income $86


PARNELL COMPANY
Selected Accounts from Comparative Balance Sheets
December 31, 2016 and 2015
Year ($ in 000s)
2016 2015 Change
Cash 142 96 46
Accounts receivable 332 212 120
Inventory 317 433 (116)
Prepaid insurance 62 96 (34)
Accounts payable 218 113 105
Salaries payable 110 89 21
Deferred income tax liability 68 56 12
Bond discount 186 208 (22)

Required:

1. Prepare the cash flows from the operating activities section of the statement of cash flows for Parnell Company using the direct method.

2. Prepare the cash flows from the operating activities section of the statement of cash flows for Parnell Company using the indirect method.

Cash Flow Statement:

Cash flow statements help the business entity to plan its cash position in the upcoming financial year. It analyses the cash flow generated by operating, financing, and investing activities.

Answer and Explanation: 1

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1.

The cash flows from operating activities section of the statement of cash flows for Parnell Company using the direct method is shown below.

Parne...

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Disclosure Requirements for Cash Flow Statements

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Chapter 14 / Lesson 4
10K

A company's cash flow statements must meet specific disclosure requirements to be of use to investors. Review the statement of cash flows, what must be disclosed, and non-cash investing/financing with examples.


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