Exercise 16-1 Cash flow from operations (indirect) L.O. P2

 

Exercise 16-1 Cash flow from operations (indirect) L.O. P2

Rasheed Company reports net income of $460,000 for the year ended December 31, 2011. It also reports $82,800 depreciation expense and a $7,500 gain on the sale of machinery. Its comparative balance sheets reveal a $36,800 increase in accounts receivable, $18,860 increase in accounts payable, $10,120 decrease in prepaid expenses, and $14,260 decrease in wages payable.
Required:
Prepare only the operating activities section of the statement of cash flows for 2011 using the indirect method. (Amounts to be deducted should be indicated with a minus sign. Omit the “$” sign in your response.)

2.

award:
2 out of
2.00 points

Exercise 16-4 Cash flows from operating activities (indirect) L.O. P2

Roney Company’s calendar-year 2011 income statement shows the following: Net Income, $422,000; Depreciation Expense, $52,328; Amortization Expense, $10,550; Gain on Sale of Plant Assets, $3,500. An examination of the company’s current assets and current liabilities reveals the following changes (all from operating activities): Accounts Receivable decrease, $13,400; Merchandise Inventory decrease, $38,860; Prepaid Expenses increase, $2,300; Accounts Payable decrease, $5,750; Other Payables increase, $874.
Use the indirect method to compute cash flow from operating activities. (Amounts to be deducted should be indicated with a minus sign. Omit the “$” sign in your response.)

3.

award:
2 out of
2.00 points

Exercise 16-6 Cash flows from operating activities (indirect) L.O. P2

BEKHAM COMPANY
Income Statement
For Year Ended December 31, 2011
Sales $ 1,731,000
Cost of goods sold 848,190


Gross profit 882,810
Operating expenses
Salaries expense $ 237,147
Depreciation expense 41,544
Rent expense 46,737
Amortization expenses–Patents 5,193
Utilities expense 19,041 349,662




533,148
Gain on sale of equipment 6,924


Net income $ 540,072





Changes in current asset and current liability accounts for the year that relate to operations follow.
Accounts receivable $ 18,850 increase Accounts payable $ 14,325 Decrease
Merchandise inventory 19,975 increase Salaries payable 5,650 Decrease

Use the above income statement and information about changes in noncash current assets and current liabilities to prepare only the cash flows from operating activities section of the statement of cash flows using the indirect method. (Amounts to be deducted should be indicated with a minus sign. Omit the “$” sign in your response)

4.

award:
0.80 out of
1.00 point

Exercise 16-8 Cash flows from investing activities L.O. P3

a. Sold land costing $325,000 for $410,000 cash, yielding a gain of $85,000.
b. Paid $112,000 cash for a new truck.
c. Equipment with a book value of $81,000 and an original cost of $170,000 was sold at a loss of $32,000.
d. Long-term investments in stock were sold for $94,200 cash, yielding a gain of $14,750.
Use the above information to determine this company’s cash flows from investing activities.(Amounts to be deducted should be indicated with a minus sign. Omit the “$” sign in your response.)

5.

award:
1 out of
1.00 point

Exercise 16-9 Cash flows from financing activities L.O. P3

a. Net income was $474,000.
b. Issued common stock for $72,000 cash.
c. Paid cash dividend of $11,000.
d. Paid $100,000 cash to settle a note payable at its $100,000 maturity value.
e. Paid $118,000 cash to acquire its treasury stock.
f. Purchased equipment for $86,000 cash.
Use the above information to determine this company’s cash flows from financing activities.(Amounts to be deducted should be indicated with a minus sign. Omit the “$” sign in your response.)

Exercise 16-10 Preparation of statement of cash flows (indirect) L.O. P1

[The following information applies to the questions displayed below.]

Use the following financial statements and additional information.
GECKO INC.
Comparative Balance Sheets
June 30, 2011 and 2010
2011 2010
Assets
Cash $ 114,000 $ 56,900
Accounts receivable, net 69,800 51,200
Inventory 66,500 95,800
Prepaid expenses 5,900 4,500
Equipment 129,600 119,000
Accum. depreciation—Equipment (28,400 ) (10,500 )






Total assets $ 357,400 $ 316,900












Liabilities and Equity
Accounts payable $ 26,400 $ 32,200
Wages payable 7,500 16,100
Income taxes payable 2,100 4,300
Notes payable (long term) 56,000 76,000
Common stock, $5 par value 240,000 180,000
Retained earnings 25,400 8,300






Total liabilities and equity $ 357,400 $ 316,900













GECKO INC.
Income Statement
For Year Ended June 30, 2011
Sales $ 672,000
Cost of goods sold 410,000


Gross profit 262,000
Operating expenses
Depreciation expense $ 58,500
Other expenses 66,100


Total operating expenses 124,600


137,400
Other gains (losses)
Gain on sale of equipment 2,200


Income before taxes 139,600
Income taxes expense 55,840


Net income $ 83,760





Additional Information
a. A $20,000 note payable is retired at its $20,000 carrying (book) value in exchange for cash.
b. The only changes affecting retained earnings are net income and cash dividends paid.
c. New equipment is acquired for $59,600 cash.
d. Received cash for the sale of equipment that had cost $49,000, yielding a $2,200 gain.
e. Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement.
f. All purchases and sales of merchandise inventory are on credit.
Section Break Exercise 16-10 Preparation of statement of cash flows (indirect) L.O. P1

6.

award:
2.64 out of
4.00 points

Exercise 16-10 Part 1

1. Prepare a statement of cash flows for the year ended June 30, 2011, using the indirect method.(Amounts to be deducted should be indicated with a minus sign. Omit the “$” sign in your response.)
GECKO, INC.
Statement of Cash Flows
For Year Ended June 30, 2011
Cash flows from operating activities
Net income $ 83,760
Adjustments to reconcile net income to net cash
provided by operating activities
Increase in accounts receivable
Decrease in merchandise inventory
Increase in prepaid expenses
Decrease in accounts payable
Decrease in wages payable
Decrease in income taxes payable
Depreciation expense
Gain on sale of plant assets

Net cash provided by by operating activities $ 49,000 incorrect
Cash flows from investing activities
Cash paid for dividends incorrect incorrect
Cash received from stock issuance incorrect incorrect

Net cash used in in investing activities 40,000 incorrect
Cash flows from financing activities
Cash paid for equipment incorrect incorrect
Cash paid to retire notes
Cash received from sale of equipment incorrect incorrect

Net cash used in in financing activities -28,400 incorrect

Net increase in cash $ 65,000 incorrect
Cash balance at beginning of year 56,900

Cash balance at end of year $ 121,900 incorrect



eBook LinkView Hint #1

Worksheet Difficulty: Hard
Exercise 16-10 Part 1 Learning Objective: 16-P1 Prepare a statement of cash flows.

7.

award:
0 out of
1.00 point

Exercise 16-10 Part 2

2. Compute the company’s cash flow on total assets ratio for its fiscal year 2011. (Round your answer to 1 decimal place. Omit the “%” sign in your response.)
Cash flow on total assets ratio 31.9 incorrect %

8.

award:
2 out of
2.00 points

Exercise 16-14 Reporting cash flows from operations (indirect) L.O. P2

Harold Company reports the following information for its recent calendar year.
Sales $ 73,000
Expenses
Cost of goods sold 41,000
Salaries expense 12,000
Depreciation expense 8,000


Net income $ 12,000




Accounts receivable increase $ 5,000
Inventory decrease 2,000
Salaries payable increase 900

Required:
Prepare the operating activities section of the statement of cash flows for Harold Company using the indirect method.(Amounts to be deducted should be indicated with a minus sign. Omit the “$” sign in your response.)

9.

award:
2 out of
2.00 points

Exercise 16-15 Reporting and interpreting cash flows from operations (indirect) L.O. P2

Oregon Company disclosed the following information for its recent calendar year.
Revenues $ 95,000
Expenses
Salaries expense 74,000
Utilities expense 28,000
Depreciation expense 31,400
Other expenses 9,000



Net loss $ (47,400 )






Accounts receivable decrease $ 28,000
Purchased a machine 21,000
Salaries payable increase 28,000
Other accrued liabilities decrease 13,000

Required:
1. Prepare the operating activities section of the statement of cash flows using the indirect method. (Amounts to be deducted and loss amounts should be indicated with a minus sign. Omit the “$” sign in your response.)

10.

award:
2.59 out of
3.00 points

Exercise 16-17 Cash flows spreadsheet (indirect method) L.O. P4

a. Net income for the year was $40,000.
b. Dividends of $10,000 cash were declared and paid.
c. Stylish’s only noncash expense was $65,000 of depreciation.
d. The company purchased plant assets for $60,000 cash.
e. Notes payable of $60,000 were issued for $60,000 cash.
Complete the following spreadsheet in preparation of the statement of cash flows. Report operating activities under the indirect method. (Leave no cells blank – be certain to enter “0” wherever required. Omit the “$” sign in your response.)

11.

award:
3 out of
3.00 points

Exercise 16-18 Statement of cash flows under IFRS (indirect) L.O. P1

Peugeot S.A. reports the following financial information for the year ended December 31, 2008 (euros in millions).
Net loss 480 Cash from sales of treasury stock and other 846
Depreciation and amortization 3,875 Cash paid for dividends 362
Gains on disposals and other (368 ) Cash from disposal of plant assets and intangibles 68
Net increase in current assets (413 ) Cash paid for plant assets and intangibles (3,530 )
Net decrease in current liabilities (2,228 ) Cash and cash equivalents, December 31, 2007 5,991

Prepare its statement of cash flows under the indirect method.(Enter your answers in millions. Amounts to be deducted and loss amounts should be indicated with a minus sign. Omit the “€” sign in your response.)

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