Solved by verified expert :1 award: acct 212 homework 2 chapter 16
2 out of
2.00 points
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
Cash
flows from investing activities
Cash
paid for dividends
Cash
received from stock issuance
Net
cash used in in investing activities
40,000
Cash
flows from financing activities
Cash
paid for equipment
Cash
paid to retire notes
Cash
received from sale of equipment
Net
cash used in in financing activities
-28,400
Net
increase in cash
$ 65,000
Cash
balance at beginning of year
56,900
Cash
balance at end of year
$ 121,900
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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 %
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.)
