Reconciling Net Income and Cash Flow from Operations Using FSET

For fiscal year 2015, Beyer GMBH had the following summary information available concerning its operating activities. The company had no investing or financing activities this year.

1. Sales of merchandise to customers on credit	507,400
2. Sales of merchandise to customers for cash	91,500
3. Cost of merchandise sold on credit	320,100
4. Cost of merchandise sold for cash	63,400
5. Purchases of merchandise from suppliers on credit	351,600
6. Purchases of merchandise from suppliers for cash	47,700
7. Collections from customers on accounts receivable	483,400
8. Cash payments to suppliers on accounts payable	340,200
9. Operating expenses (all paid in cash)	172,300

Required

a. Enter the items above into the Financial Statement Effects Template. Under noncash assets, use two separate columns for accounts receivable and inventories. Calculate the totals for each column.

	Balance Sheet											Income Statement
Transaction	Cash Asset	+	Accounts Receivable	+	Inventories	=	Accounts Payable	+	Contd Capital	+	Earned Capital	Revenue	-	Expenses	=	Net Income
1	Answer	+	Answer	+	Answer	=	Answer	+	Answer	+	Answer	Answer	-	Answer	=	Answer
2	Answer	+	Answer	+	Answer	=	Answer	+	Answer	+	Answer	Answer	-	Answer	=	Answer
3	Answer	+	Answer	+	Answer	=	Answer	+	Answer	+	Answer	Answer	-	Answer	=	Answer
4	Answer	+	Answer	+	Answer	=	Answer	+	Answer	+	Answer	Answer	-	Answer	=	Answer
5	Answer	+	Answer	+	Answer	=	Answer	+	Answer	+	Answer	Answer	-	Answer	=	Answer
6	Answer	+	Answer	+	Answer	=	Answer	+	Answer	+	Answer	Answer	-	Answer	=	Answer
7	Answer	+	Answer	+	Answer	=	Answer	+	Answer	+	Answer	Answer	-	Answer	=	Answer
8	Answer	+	Answer	+	Answer	=	Answer	+	Answer	+	Answer	Answer	-	Answer	=	Answer
9	Answer	+	Answer	+	Answer	=	Answer	+	Answer	+	Answer	Answer	-	Answer	=	Answer
Totals	Answer	+	Answer	+	Answer	=	Answer	+	Answer	+	Answer	Answer	-	Answer	=	Answer

b. What was the companys net income for the year? Answer What was the cash flow from operating activities? (Use the direct method.) Answer

c. Indicate the direction and amounts by which each of the following accounts changed during the year. If the account decreased, enter as a negative number.

1. Accounts receivable	Answer
2. Merchandise inventory	Answer
3. Accounts payable	Answer

d. Using your results above, prepare the operating activities section of the statement of cash flows using the indirect format.

Net income	Answer
Change in accounts receivable	Answer
Change in inventories	Answer
Change in accounts payable	Answer
Cash flow from operating activities	Answer