Chapter 12 Exercise Solution.pptx | Expense | Cash Flow Statement
Short Description
The following financial statements and additional information are reported: IKIBAN INC. Depreciation . IKIBAN INC.700 $2...
Description
>he follo!ing incoe stateent and inforation aout changes in noncash current assets and current liailities are reported$ Sohad Company Income Statement For the year ended December 31 !"13
ales %ost of goods sold ross profit ;perating expenses alaries expense +epreciation expense Rent expense )ortiotal operating expenses ain on sale of equipent &et incoe
'1(,2,(""" 1(""" ,#7(""" '245(5#5 44(2"" 4("" 4(2"" 1,(125 #1(" 475(#4" (2"" '4,1(54"
%hanges in current asset and current liaility accounts for the year that relate to operating activities follo!: )ccounts receivale 9erchandise inventory
'#"(5"" 0ncrease 25(""" 0ncrease
)ccounts payale alaries payale
'12(5"" +ecrease #(5"" +ecrease
Prepare only the cash flo!s fro operating activities section of the stateent of cash f lo!s for 2"1# using the indirect ethod$
Statement of Cash Flows - Indirect Method
%ash flo!s fro operating activities &et incoe )d*ustents to reconcile net incoe to operating cash flo!: 0ncoe stateent ites .opposite direction/: A &oncash expenses .+epreciation( aorti assets - ain on sale of C> assets Dalance sheet ites: %hange in noncash operating assets .opposite direction/ A +ecreases in current operating assets - 0ncreases in current operating assets %hange in noncash operating liailities .sae direction/ A 0ncreases in current operating liailities - +ecreases in current operating liailities &et cash provided .used/ y operating activities
tart assuing that &0 ? change in cash %orrect for that assuption 3hy@ >hese expenses didnBt reduce cash >hese revenues didnBt provide cash %ash flo! is reported in the 0nvesting activities section >hin of it as a *ournal entry: +eit %redit %ash %urrent asset %urrent asset %ash %ash %urrent liaility
%urrent liaility %ash
Sohad Company Income Statement For the year ended December 31 !"13
ales %ost of goods sold ross profit ;perating expenses alaries expense +epreciation expense Rent expense )ortiotal operating expenses ain on sale of equipent &et incoe
Sohad Company Statement of Cash Flows (partial) - Indirect Method For the year ended December 31 !"13
'1(,2,(""" 1(""" ,#7(""" '245(5#5 44(2"" 4("" 4(2"" 1,(125 #1(" 475(#4" (2"" '4,1(54"
%ash flo!s fro operating activities &et incoe '4,1(54" )d*ustents to reconcile net incoe to operating cash flo!: +epreciation expense '44(2"" )ortihe follo!ing incoe stateent and inforation aout changes in noncash current assets and current liailities are reported$ Sohad Company Income Statement For the year ended December 31 !"13
ales %ost of goods sold ross profit ;perating expenses alaries expense +epreciation expense Rent expense )ortiotal operating expenses ain on sale of equipent &et incoe
'1(,2,(""" 1(""" ,#7(""" '245(5#5 44(2"" 4("" 4(2"" 1,(125 #1(" 475(#4" (2"" '4,1(54"
%hanges in current asset and current liaility accounts for the year that relate to operating activities follo!: )ccounts receivale 9erchandise inventory
'#"(5"" 0ncrease 25(""" 0ncrease
)ccounts payale alaries payale
'12(5"" +ecrease #(5"" +ecrease
Prepare only the cash flo!s fro operating activities section of the stateent of cash f lo!s for 2"1# using the direct ethod$
Sohad Company Statement of Cash Flows (partial) - Direct Method For the year ended December 31 !"13
Sohad Company Income Statement For the year ended December 31 !"13
ales %ost of goods sold ross profit ;perating expenses alaries expense +epreciation expense Rent expense )ortiotal operating expenses
'1(,2,(""" 1(""" ,#7(""" '245(5#5 44(2"" 4("" 4(2"" 1,(125 #1(" 475(#4" (2"" '4,1(54"
ain on sale of equipent &et incoe
Date
%ash flo!s fro operating activities Receipts fro custoers Payents for erchandise Payents for salaries Payents for rent Payents for utilities &et cash provided y operating activities )ccounts receivale 9erchandise inventory )ccounts payale alaries payale
#eneral $ournal
%ash )ccounts receivale ales
'#"(5"" 25(""" 12(5"" #(5""
Debit
0ncrease 0ncrease +ecrease +ecrease
Credit
1(77(5"" #"(5"" 1(,2,("""
%ost of goods sold 9erchandise inventory )ccounts payale %ash
1(""" 25(""" 12(5""
alaries expense alaries payale %ash
245(5#5 #(5""
'1(77(5"" .1("2,(5""/ .24("#5/ .4(""/ .1,(125/ '452(24"
1("2,(5""
24("#5
>he follo!ing incoe stateent and inforation aout changes in noncash current assets and current liailities are reported$ Sahim Company Income Statement For the year ended December 31 !"13
ales %ost of goods sold ross profit ;perating expenses alaries expense +epreciation expense Rent expense )ortiotal operating expenses ain on sale of equipent &et incoe
'2("12(""" ,5(,," 1("2(12" '275(44 4,(2,, 54(#24 ("# 22(1#2 4"(424 1( ,("4, '27(744
%hanges in current asset and current liaility accounts for the year that relate to operating activities follo!: )ccounts receivale 9erchandise inventory
'1,(1"" 0ncrease 1,(2"" 0ncrease
)ccounts payale alaries payale
'(#"" +ecrease 5(55" +ecrease
Prepare only the cash flo!s fro operating activities section of the stateent of cash flo!s for 2"1# using the direct ethod$
Sahim Company Income Statement For the year ended December 31 !"13
ales %ost of goods sold ross profit ;perating expenses alaries expense +epreciation expense Rent expense )ortiotal operating expenses ain on sale of equipent &et incoe
'2("12(""" ,5(,," 1("2(12" '275(44 4,(2,, 54(#24 ("# 22(1#2 4"(424 1( ,("4, '27(744
#eneral $ournal
%ash )ccounts receivale ales
Debit
1(#("" 1,(1"" 2("12("""
%ost of goods sold 9erchandise inventory )ccounts payale %ash
,5(,," 1,(2"" (#""
alaries expense alaries payale %ash
275(44 5(55"
1("1#(#,"
2,1(14
%hanges in current asset and current liaility accounts for the year that relate to operating activities follo!: )ccounts receivale 9erchandise inventory
'1,(1"" 0ncrease 1,(2"" 0ncrease
)ccounts payale alaries payale
Credit
'(#"" +ecrease 5(55" +ecrease
Sahim Company Income Statement For the year ended December 31 !"13
ales %ost of goods sold ross profit ;perating expenses alaries expense +epreciation expense Rent expense )ortiotal operating expenses ain on sale of equipent &et incoe
'2("12(""" ,5(,," 1("2(12" '275(44 4,(2,, 54(#24 ("# 22(1#2 4"(424 1( ,("4, '27(744
#eneral $ournal
%ash )ccounts receivale ales
Debit
Credit
1(#("" 1,(1"" 2("12("""
%ost of goods sold 9erchandise inventory )ccounts payale %ash
,5(,," 1,(2"" (#""
alaries expense alaries payale %ash
275(44 5(55"
1("1#(#,"
2,1(14
Sahim Company Statement of Cash Flows (partial) - Direct Method For the year ended December 31 !"13
%ash flo!s fro operating activities Receipts fro custoers Payents for erchandise Payents for salaries Payents for rent Payents for utilities &et cash provided y operating activities
'1(#("" .1("1#(#,"/ .2,1(14/ .54(#24/ .22(1#2/ '22(,7"
Sahim Company Statement of Cash Flows (partial) - Direct Method For the year ended December 31 !"13
%ash flo!s fro operating activities Receipts fro custoers Payents for erchandise Payents for salaries Payents for rent Payents for utilities &et cash provided y operating activities
'1(#("" .1("1#(#,"/ .2,1(14/ .54(#24/ .22(1#2/ '22(,7"
Sahim Company Statement of Cash Flows (partial) - Indirect Method For the year ended December 31 !"13
%ash flo!s fro operating activities &et incoe '27(744 )d*ustents to reconcile net incoe to operating cash cash flo!: +epreciation expense '4,(2,, )ortihe follo!ing financial stateents and additional inforation are reported: I*I+%, I,C Income Statement For the year ended $une 3" !"13
ales %ost of goods sold ross profit ;perating expenses ;ther expenses '7(""" +epreciation expense 5,("" >otal operating expenses ain on sale of equipent 0ncoe efore taxes 0ncoe taxes expense &et incoe
'7,(""" 411(""" 27("""
125("" 141(4"" 2(""" 14#(4"" 4#(," '(51"
Prepare a stateent of cash flo!s for the year ended Fune #"( 2"1# using the indirect ethod$
I*I+%, I,C Comparati.e +alance Sheets $une 3" !"13 and !"1! !"13 %ssets
%ash )ccounts receivale( net 0nventory Prepaid expenses Equipent )ccu$ +epreciation - Equipent &otal %ssets
',7(5"" 5(""" #(,"" 4(4"" 124(""" .27("""/ '#17(7""
'44(""" 51(""" ,(5"" 5(4"" 115(""" .("""/ '22(""
'25(""" (""" #(4"" #"(""" 22"(""" ##(#"" '#17(7""
'#"(""" 15(""" #(,"" "(""" 1"(""" 24(1"" '22(""
'iabilities and euity
)ccounts payale 3ages payale 0ncoe taxes payale &otes payale .long-ter/ %oon stoc( '5 par value Retained earnings &otal 'iabilities and uity
a$ $ c$ d$ e$ f$
!"1!
) '#"(""" note payale is retired at its '#"(""" carrying .oo value/ in exchange for cash$ >he only changes affecting retained earnings are net incoe and cash dividends paid$ &e! equipent is acquired for '57("" cash$ Received cash for the sale of equipent that had cost '4,(""( yielding a '2(""" gain$ Prepaid expenses and 3ages payale relate to ;ther expenses on the incoe stateent$ )ll purchases and sales of erchandise inventory are on credit$
I*I+%, I,C Income Statement For the year ended $une 3" !"13
ales %ost of goods sold ross profit ;perating expenses ;ther expenses '7(""" +epreciation expense 5,("" >otal operating expenses
'7,(""" 411(""" 27("""
ain on sale of equipent
125("" 141(4"" 2("""
0ncoe efore taxes 0ncoe taxes expense &et incoe
14#(4"" 4#(," '(51"
I*I+%, Inc Company Statement of Cash Flows - Indirect Method For the year ended $une 3" !"13
%ash flo!s fro operating activities &et incoe '(51" )d*ustents to reconcile net incoe to operating cash flo!: +epreciation expense '5,("" ain on sale of equipent .2("""/
%ash flo!s fro investing activities
%ash flo!s fro financing activities
&et increase in cash
I*I+%, I,C Comparati.e +alance Sheets $une 3" !"13 and !"1! !"13
I*I+%, Inc Company Statement of Cash Flows - Indirect Method For the year ended $une 3" !"13 !"1!
%ssets
%ash )ccounts receivale( net 0nventory Prepaid expenses Equipent )ccu$ +epreciation - Equipent &otal %ssets
',7(5"" 5(""" #(,"" 4(4"" 124(""" .27("""/ '#17(7""
'44(""" 51(""" ,(5"" 5(4"" 115(""" .("""/ '22(""
'25(""" (""" #(4"" #"(""" 22"(""" ##(#"" '#17(7""
'#"(""" 15(""" #(,"" "(""" 1"(""" 24(1"" '22(""
'iabilities and euity
)ccounts payale 3ages payale 0ncoe taxes payale &otes payale .long-ter/ %oon stoc( '5 par value Retained earnings &otal 'iabilities and uity
c$
%ash flo!s fro operating activities &et incoe '(51" )d*ustents to reconcile net incoe to operating cash flo!: +epreciation expense '5,("" ain on sale of equipent .2("""/ 0ncrease in )ccounts receivale( net .14("""/ +ecrease in 0nventory 22(7"" +ecrease in Prepaid expenses 1(""" +ecrease in )ccounts payale .5("""/ +ecrease in 3ages payale .("""/ +ecrease in 0ncoe taxes payale .4""/ 51("" &et cash provided y operating activities 151(41" %ash flo!s fro investing activities %ash received sale of equipent '1"(""" %ash paid for equipent .57(""/ &et cash used y investing activities .47(""/ %ash flo!s fro financing activities
&e! equipent is acquired for '57("" cash$
d$ Received cash for the sale of equipent that had cost '4,(""( yielding a '2(""" gain$ Equipent 115(""" 57("" 4,("" 124("""
)ccu$ +epr (""" 4"("" 5,("" 27("""
&et increase in cash
>he oo value of the equipent sold !as ',(""" .'4,("" cost '4"(""/ accuulated depreciation$ ince it !as sold at a gain( cash receipt !as '1"("""$
I*I+%, I,C Comparati.e +alance Sheets $une 3" !"13 and !"1! !"13
I*I+%, Inc Company Statement of Cash Flows - Indirect Method For the year ended $une 3" !"13 !"1!
%ssets
%ash )ccounts receivale( net 0nventory Prepaid expenses Equipent )ccu$ +epreciation - Equipent &otal %ssets
',7(5"" 5(""" #(,"" 4(4"" 124(""" .27("""/ '#17(7""
'44(""" 51(""" ,(5"" 5(4"" 115(""" .("""/ '22(""
'25(""" (""" #(4"" #"(""" 22"(""" ##(#"" '#17(7""
'#"(""" 15(""" #(,"" "(""" 1"(""" 24(1"" '22(""
'iabilities and euity
)ccounts payale 3ages payale 0ncoe taxes payale &otes payale .long-ter/ %oon stoc( '5 par value Retained earnings &otal 'iabilities and uity
a$ ) '#"(""" note payale is retired at its '#"(""" carrying .oo value/ in exchange for cash$ $
>he only changes affecting retained earnings are net incoe and cash dividends paid$ '24(1"" A '(51" G +ividends ? '##(#"" +ividends ? '"(#1"
%ash flo!s fro operating activities &et incoe '(51" )d*ustents to reconcile net incoe to operating cash flo!: +epreciation expense '5,("" ain on sale of equipent .2("""/ 0ncrease in )ccounts receivale( net .14("""/ +ecrease in 0nventory 22(7"" +ecrease in Prepaid expenses 1(""" +ecrease in )ccounts payale .5("""/ +ecrease in 3ages payale .("""/ +ecrease in 0ncoe taxes payale .4""/ 51("" &et cash provided y operating activities 151(41" %ash flo!s fro investing activities %ash received sale of equipent '1"(""" %ash paid for equipent .57(""/ &et cash used y investing activities .47(""/ %ash flo!s fro financing activities %ash received fro stoc issuance '"(""" %ash paid to retire notes .#"("""/ %ash paid for dividends ."(#1"/ &et cash used y financing activities ."(#1"/ &et increase in cash '4#(5"" %ash alance at Fune #"( 2"12 44(""" %ash alance at Fune #"( 2"1# ',7(5""
>he follo!ing financial stateents and additional inforation are reported: Prepare a stateent of cash flo!s for the year ended Fune #"( 2"1# using the indirect ethod$ I*I+%, I,C Income Statement For the year ended $une 3" !"13
ales %ost of goods sold ross profit ;perating expenses ;ther expenses '("" +epreciation expense 57(,"" >otal operating expenses ain on sale of equipent 0ncoe efore taxes 0ncoe taxes expense &et incoe
'72(""" 41"(""" 22("""
124(4"" 1#7("" 2(4"" 14"(""" 5(""" ',4("""
I*I+%, I,C Comparati.e +alance Sheets $une 3" !"13 and !"1! !"13 %ssets
%ash '1""(,"" )ccounts receivale( net (7"" 0nventory (1"" Prepaid expenses 4(#"" Equipent 12(#"" )ccu$ +epreciation - Equipent .2,(""/ &otal %ssets '##,(""
'57(1"" 51("" 5(,"" (2"" 115(""" .1"(7""/ '#15("""
'iabilities and euity
)ccounts payale 3ages payale 0ncoe taxes payale &otes payale .long-ter/ %oon stoc( '5 par value Retained earnings &otal 'iabilities and uity
a$ $ c$ d$ e$
!"1!
) '25(""" note payale is retired at its '25(""" carrying .oo value/ in exchange for cash$ >he only changes affecting retained earnings are net incoe and cash dividends paid$ &e! equipent is acquired for '"(1"" cash$ Received cash for the sale of equipent that had cost '4,(,""( yielding a '2(4"" gain$ Prepaid expenses and 3ages payale relate to ;ther expenses on the incoe stateent$
'2(1"" 7(5"" 2(1"" 4(""" 2#2(""" 24("" '##,(""
'#2(#"" 17(""" #(,"" 71(""" 1,#(""" 7("" '#15("""
I*I+%, Inc Company Statement of Cash Flows - Indirect Method For the year ended $une 3" !"13
%ash flo!s fro operating activities &et incoe ',4(""" )d*ustents to reconcile net incoe to operating cash flo!: +epreciation expense '57(,"" ain on sale of equipent .2(4""/
%ash flo!s fro investing activities
%ash flo!s fro financing activities
I*I+%, I,C Income Statement For the year ended $une 3" !"13
ales %ost of goods sold ross profit ;perating expenses ;ther expenses '("" +epreciation expense 57(,"" >otal operating expenses ain on sale of equipent 0ncoe efore taxes 0ncoe taxes expense &et incoe
'72(""" 41"(""" 22("""
124(4"" 1#7("" 2(4"" 14"(""" 5(""" ',4("""
I*I+%, I,C Comparati.e +alance Sheets $une 3" !"13 and !"1! !"13
I*I+%, Inc Company Statement of Cash Flows - Indirect Method For the year ended $une 3" !"13
%ash flo!s fro operating activities &et incoe ',4(""" )d*ustents to reconcile net incoe to operating cash flo!: +epreciation expense '57(,"" ain on sale of equipent .2(4""/ 0ncrease in )ccounts receivale( net .1,(1""/ +ecrease in 0nventory 2(7"" +ecrease in Prepaid expenses 1("" +ecrease in )ccounts payale .(2""/ +ecrease in 3ages payale .(5""/ +ecrease in 0ncoe taxes payale .1(7""/ 51(5"" &et cash provided y operating activities 1#5(5"" %ash flo!s fro investing activities %ash paid for equipent %ash flo!s fro financing activities
."(1""/
!"1!
%ssets
%ash '1""(,"" )ccounts receivale( net (7"" 0nventory (1"" Prepaid expenses 4(#"" Equipent 12(#"" )ccu$ +epreciation - Equipent .2,(""/ &otal %ssets '##,(""
'57(1"" 51("" 5(,"" (2"" 115(""" .1"(7""/ '#15("""
'iabilities and euity
)ccounts payale 3ages payale 0ncoe taxes payale &otes payale .long-ter/ %oon stoc( '5 par value Retained earnings &otal 'iabilities and uity
'2(1"" 7(5"" 2(1"" 4(""" 2#2(""" 24("" '##,(""
'#2(#"" 17(""" #(,"" 71(""" 1,#(""" 7("" '#15("""
c$ &e! equipent is acquired for '"(1"" cash$ d$ Received cash for the sale of equipent that had cost '4,(,""( yielding a '2(4"" gain$
I*I+%, I,C Comparati.e +alance Sheets $une 3" !"13 and !"1! !"13
Equipent 115(""" "(1"" 4,(,"" 12(#""
!"1!
%ssets
%ash '1""(,"" )ccounts receivale( net (7"" 0nventory (1"" Prepaid expenses 4(#"" Equipent 12(#"" )ccu$ +epreciation - Equipent .2,(""/ &otal %ssets '##,(""
)ccu$ +epr 1"(7"" #("" 57(,"" 2,(""
'57(1"" 51("" 5(,"" (2"" 115(""" .1"(7""/ '#15("""
'iabilities and euity
%ost )ccuulated depreciation Doo Halue ain on sale of equipent %ash received fro sale
'4,(,"" .#(""/ ',("" 2(4"" '11(#""
)ccounts payale 3ages payale 0ncoe taxes payale &otes payale .long-ter/ %oon stoc( '5 par value Retained earnings &otal 'iabilities and uity
'2(1"" 7(5"" 2(1"" 4(""" 2#2(""" 24("" '##,(""
'#2(#"" 17(""" #(,"" 71(""" 1,#(""" 7("" '#15("""
c$ &e! equipent is acquired for '"(1"" cash$ d$ Received cash for the sale of equipent that had cost '4,(,""( yielding a '2(4"" gain$
I*I+%, I,C Comparati.e +alance Sheets $une 3" !"13 and !"1! !"13
I*I+%, Inc Company Statement of Cash Flows - Indirect Method For the year ended $une 3" !"13
%ash flo!s fro operating activities &et incoe ',4(""" )d*ustents to reconcile net incoe to operating cash cash flo!: +epreciation expense '57(,"" ain on sale of equipent .2(4""/ 0ncr 0ncrea ease se in )ccou ccount nts s rece receiv iva ale le(( net net .1,( .1,(1" 1""/ "/ +ecrease in 0nventory 2(7"" +ecrease in Prepaid expenses 1("" +ecrease in )ccounts payale .(2""/ +ecrease in 3ages payale .(5""/ +ecrease in 0ncoe taxes payale .1(7""/ 51(5"" &et cash provided y operating activities 1#5(5"" %ash flo!s fro investing activities %ash %ash recei receive ved d fro fro sale sale of of equip equipen entt '11( '11(#"" #"" %ash paid for equipent ."(1""/ &et cash used y investing activities .4,(,""/ %ash flo!s fro financing activities
!"1!
%ssets
%ash '1""(,"" )ccounts receivale( net (7"" 0nventory (1"" Prepaid expenses 4(#"" Equipent 12(#"" )ccu$ +epreciation - Equipent .2,(""/ &otal %ssets '##,(""
'57(1"" 51("" 5(,"" (2"" 115(""" .1"(7""/ '#15("""
'iabilities and euity
)ccounts payale 3ages payale 0ncoe taxes payale &otes payale .long-ter/ %oon stoc( '5 par value Retained earnings &otal &otal 'iabilities and uity
'2(1"" 7(5"" 2(1"" 4(""" 2#2(""" 24("" '##,(""
'#2(#"" 17(""" #(,"" 71(""" 1,#(""" 7("" '#15("""
c$ &e! equipent is acquired for '"(1"" cash$ d$ Received Received cash cash for the sale sale of equipen equipentt that had cost cost '4,(,""( yielding a '2(4"" gain$
I*I+%, I,C Comparati.e +alance Sheets $une 3" !"13 and !"1! !"13
I*I+%, Inc Company Statement of Cash Flows - Indirect Method For the year ended $une 3" !"13
%ash flo!s fro operating activities &et incoe ',4(""" )d*ustents to reconcile net incoe to operating cash cash flo!: +epreciation expense '57(,"" ain on sale of equipent .2(4""/ 0ncr 0ncrea ease se in )ccou ccount nts s rece receiv iva ale le(( net net .1,( .1,(1" 1""/ "/ +ecrease in 0nventory 2(7"" +ecrease in Prepaid expenses 1("" +ecrease in )ccounts payale .(2""/ +ecrease in 3ages payale .(5""/ +ecrease in 0ncoe taxes payale .1(7""/ 51(5"" &et cash provided y operating activities 1#5(5"" %ash flo!s fro investing activities %ash %ash recei receive ved d fro fro sale sale of of equip equipen entt '11( '11(#"" #"" %ash paid for equipent ."(1""/ &et cash used y investing activities .4,(,""/ %ash flo!s fro financing activities %as %ash rece receiived fro fro stoc toc issuan suanc ce '4( '4("" """ " %ash paid to retire notes .25("""/ %ash paid for dividends .7("""/ &et cash used y financing activities .4#("""/ &et increase in cash '4#(7"" %ash alance at Fune #"( 2"12 57(1"" %ash alance at Fune #"( 2"1# '1""(,""
!"1!
%ssets
%ash '1""(,"" )ccounts receivale( net (7"" 0nventory (1"" Prepaid expenses 4(#"" Equipent 12(#"" )ccu$ +epreciation - Equipent .2,(""/ &otal %ssets '##,(""
'57(1"" 51("" 5(,"" (2"" 115(""" .1"(7""/ '#15("""
'iabilities and euity
)ccounts payale 3ages payale 0ncoe taxes payale &otes payale .long-ter/ %oon stoc( '5 par value Retained earnings &otal &otal 'iabilities and uity
a
'2(1"" 7(5"" 2(1"" 4(""" 2#2(""" 24("" '##,(""
'#2(#"" 17(""" #(,"" 71(""" 1,#(""" 7("" '#15("""
) '25(""" note payale payale is is retired retired at its its '25(""" '25(""" carrying carrying .oo value/ in exchange for cash$
$ >he only changes affecting retained earnings are net incoe and cash dividends paid$
I*I+%, I,C Comparati.e +alance Sheets $une 3" !"13 and !"1! !"13
I*I+%, Inc Company Statement of Cash Flows - Indirect Method For the year ended $une 3" !"13
%ash flo!s fro operating activities &et incoe ',4(""" )d*ustents to reconcile net incoe to operating cash cash flo!: +epreciation expense '57(,"" ain on sale of equipent .2(4""/ 0ncr 0ncrea ease se in )ccou ccount nts s rece receiv iva ale le(( net net .1,( .1,(1" 1""/ "/ +ecrease in inventory 2(7"" +ecrease in Prepaid expenses 1("" +ecrease in )ccounts payale .(2""/ +ecrease in 3ages payale .(5""/ +ecrease in 0ncoe taxes payale .1(7""/ 51(5"" &et cash provided y operating activities 1#5(5"" %ash flo!s fro investing activities %ash %ash recei receive ved d fro fro sale sale of of equip equipen entt '11( '11(#"" #"" %ash paid for equipent ."(1""/ &et cash used y investing activities .4,(,""/ %ash flo!s fro financing activities %as %ash rece receiived fro fro stoc toc issuan suanc ce '4( '4("" """ " %ash paid to retire notes .25("""/ %ash paid for dividends .7("""/ &et cash used y financing activities .4#("""/ &et increase in cash '4#(7"" %ash alance at Fune #"( 2"12 57(1"" %ash alance at Fune #"( 2"1# '1""(,""
!"1!
%ssets
%ash '1""(,"" )ccounts receivale( net (7"" 0nventory (1"" Prepaid expenses 4(#"" Equipent 12(#"" )ccu$ +epreciation - Equipent .2,(""/ &otal %ssets '##,(""
'57(1"" 51("" 5(,"" (2"" 115(""" .1"(7""/ '#15("""
'iabilities and euity
)ccounts payale 3ages payale 0ncoe taxes payale &otes payale .long-ter/ %oon stoc( '5 par value Retained earnings &otal &otal 'iabilities and uity
'2(1"" 7(5"" 2(1"" 4(""" 2#2(""" 24("" '##,(""
'#2(#"" 17(""" #(,"" 71(""" 1,#(""" 7("" '#15("""
%opute the copanyBs cash flo! on total assets ratio for its fiscal year 2"1#$ ;perating cash flo!s )verage total assets
'1#5(5"" .'#15(""" A '##,(""/ I 2 '1#5(5"" '#2(,""
41$5J
Exercise 12-11 page 54(
>he follo!ing financial stateents and additional inforation are reported: I*I+%, I,C Income Statement For the year ended $une 3" !"13
ales %ost of goods sold ross profit ;perating expenses ;ther expenses '7(""" +epreciation expense 5,("" >otal operating expenses ain on sale of equipent 0ncoe efore taxes 0ncoe taxes expense &et incoe
'7,(""" 411(""" 27("""
125("" 141(4"" 2(""" 14#(4"" 4#(," '(51"
Prepare a stateent of cash flo!s for the year ended Fune #"( 2"1# using the direct ethod$
I*I+%, I,C Comparati.e +alance Sheets $une 3" !"13 and !"1! !"13 %ssets
%ash )ccounts receivale( net 0nventory Prepaid expenses Equipent )ccu$ +epreciation - Equipent &otal %ssets
',7(5"" 5(""" #(,"" 4(4"" 124(""" .27("""/ '#17(7""
'44(""" 51(""" ,(5"" 5(4"" 115(""" .("""/ '22(""
'25(""" (""" #(4"" #"(""" 22"(""" ##(#"" '#17(7""
'#"(""" 15(""" #(,"" "(""" 1"(""" 24(1"" '22(""
'iabilities and euity
)ccounts payale 3ages payale 0ncoe taxes payale &otes payale .long-ter/ %oon stoc( '5 par value Retained earnings &otal 'iabilities and uity
a$ $ c$ d$ e$ f$
!"1!
) '#"(""" note payale is retired at its '#"(""" carrying .oo value/ in exchange for cash$ >he only changes affecting retained earnings are net incoe and cash dividends paid$ &e! equipent is acquired for '57("" cash$ Received cash for the sale of equipent that had cost '4,(""( yielding a '2(""" gain$ Prepaid expenses and 3ages payale relate to ;ther expenses on the incoe stateent$ )ll purchases and sales of erchandise inventory are on credit$
I*I+%, Inc Company Statement of Cash Flows - Direct Method For the year ended $une 3" !"13
%ash flo!s fro operating activities Receipts fro custoers Payents for erchandise Payents for other expenses Payents for incoe taxes &et cash provided y operating activities %ash flo!s fro investing activities
'4(""" .##(#""/ .75("""/ .44(2"/ '151(41"
Income Statement
ales %ost of goods sold ross profit ;perating expenses ;ther expenses '7(""" +epreciation expense 5,("" >otal operating expenses ain on sale of equipent 0ncoe efore taxes 0ncoe taxes expense &et incoe
%ash flo!s fro financing activities
'7,(""" 411(""" 27("""
125("" 141(4"" 2(""" 14#(4"" 4#(," '(51"
Comparati.e +alance Sheets !"13
!"1!
',7(5"" 5(""" #(,"" 4(4"" 124(""" .27("""/ '#17(7""
'44(""" 51(""" ,(5"" 5(4"" 115(""" .("""/ '22(""
'25(""" (""" #(4"" #"(""" 22"(""" ##(#"" '#17(7""
'#"(""" 15(""" #(,"" "(""" 1"(""" 24(1"" '22(""
%ssets
#eneral $ournal
Debit
%ash )ccounts receivale( net ales
4(""" 14("""
%ost of goods sold )ccounts payale 0nventory %ash
411(""" 5("""
Credit
7,("""
7(""" ("""
0ncoe taxes expense 0ncoe taxes payale %ash
4#(," 4""
&otal %ssets 'iabilities and euity
22(7"" ##(#""
;ther expenses 3ages payale Prepaid expenses %ash
%ash )ccounts receivale( net 0nventory Prepaid expenses Equipent )ccu$ +epreciation - Equipent
1(""" 75("""
44(2"
)ccounts payale 3ages payale 0ncoe taxes payale &otes payale .long-ter/ %oon stoc( '5 par value Retained earnings &otal 'iabilities and uity
I*I+%, Inc Company Statement of Cash Flows - Direct Method For the year ended $une 3" !"13
%ash flo!s fro operating activities Receipts fro custoers Payents for erchandise Payents for other expenses Payents for incoe taxes &et cash provided y operating activities %ash flo!s fro investing activities %ash received fro sale of equipent '1"(""" %ash paid for equipent .57(""/ &et cash used y investing activities %ash flo!s fro financing activities
Income Statement
'4(""" .##(#""/ .75("""/ .44(2"/ '151(41"
ales %ost of goods sold ross profit ;perating expenses ;ther expenses '7(""" +epreciation expense 5,("" >otal operating expenses ain on sale of equipent
.47(""/
0ncoe efore taxes 0ncoe taxes expense &et incoe
'7,(""" 411(""" 27("""
125("" 141(4"" 2(""" 14#(4"" 4#(," '(51"
Comparati.e +alance Sheets !"13
!"1!
',7(5""
'44("""
124(""" .27("""/ '#17(7""
115(""" .("""/ '22(""
#"(""" 22"(""" ##(#"" '#17(7""
"(""" 1"(""" 24(1"" '22(""
%ssets
%ash
c$
&e! equipent is acquired for '57("" cash$
d$ Received cash for the sale of equipent that had cost '4,(""( yielding a '2(""" gain$ Equipent 115(""" 57("" 4,("" 124("""
)ccu$ +epr (""" 4"("" 5,("" 27("""
>he oo value of the equipent sold !as ',(""" .'4,("" cost - '4"("" accuulated depreciation$/ ince it !as sold at a gain( cash receipt !as '1"("""$
Equipent )ccu$ +epreciation - Equipent &otal %ssets 'iabilities and euity
&otes payale .long-ter/ %oon stoc( '5 par value Retained earnings &otal 'iabilities and uity
I*I+%, Inc Company Statement of Cash Flows - Direct Method For the year ended $une 3" !"13
%ash flo!s fro operating activities Receipts fro custoers Payents for erchandise Payents for other expenses Payents for incoe taxes &et cash provided y operating activities %ash flo!s fro investing activities %ash received fro sale of equipent '1"(""" %ash paid for equipent .57(""/ &et cash used y investing activities %ash flo!s fro financing activities %ash received fro stoc issuance '"(""" %ash paid to retire notes .#"("""/ %ash paid for dividends ."(#1"/ &et cash used y financing activities &et increase in cash %ash alance at Fune #"( 2"12 %ash alance at Fune #"( 2"1#
Income Statement
'4(""" .##(#""/ .75("""/ .44(2"/ '151(41"
ales %ost of goods sold ross profit ;perating expenses ;ther expenses '7(""" +epreciation expense 5,("" >otal operating expenses ain on sale of equipent
.47(""/
0ncoe efore taxes 0ncoe taxes expense &et incoe
'7,(""" 411(""" 27("""
125("" 141(4"" 2(""" 14#(4"" 4#(," '(51"
Comparati.e +alance Sheets
."(#1"/ '4#(5"" 44(""" ',7(5""
!"13
!"1!
',7(5"" 5(""" #(,"" 4(4"" 124(""" .27("""/ '#17(7""
'44(""" 51(""" ,(5"" 5(4"" 115(""" .("""/ '22(""
'25(""" (""" #(4"" #"(""" 22"(""" ##(#"" '#17(7""
'#"(""" 15(""" #(,"" "(""" 1"(""" 24(1"" '22(""
%ssets
%ash )ccounts receivale( net 0nventory Prepaid expenses Equipent )ccu$ +epreciation - Equipent &otal %ssets 'iabilities and euity
a$ ) '#"(""" note payale is retired at its '#"(""" carrying .oo value/ in exchange for cash$ $
>he only changes affecting retained earnings are net incoe and cash dividends paid$ '24(1"" A '(51" G +ividends ? '##(#"" +ividends ? '"(#1"
)ccounts payale 3ages payale 0ncoe taxes payale &otes payale .long-ter/ %oon stoc( '5 par value Retained earnings &otal 'iabilities and uity
>he follo!ing financial stateents and additional inforation are reported: Prepare a stateent of cash flo!s for the year ended Fune #"( 2"1# using the direct ethod$ I*I+%, I,C Income Statement For the year ended $une 3" !"13
ales %ost of goods sold ross profit ;perating expenses ;ther expenses '("" +epreciation expense 57(,"" >otal operating expenses ain on sale of equipent 0ncoe efore taxes 0ncoe taxes expense &et incoe
'72(""" 41"(""" 22("""
124(4"" 1#7("" 2(4"" 14"(""" 5(""" ',4("""
I*I+%, I,C Comparati.e +alance Sheets $une 3" !"13 and !"1! !"13 %ssets
%ash '1""(,"" )ccounts receivale( net (7"" 0nventory (1"" Prepaid expenses 4(#"" Equipent 12(#"" )ccu$ +epreciation - Equipent .2,(""/ &otal %ssets '##,(""
'57(1"" 51("" 5(,"" (2"" 115(""" .1"(7""/ '#15("""
'iabilities and euity
)ccounts payale 3ages payale 0ncoe taxes payale &otes payale .long-ter/ %oon stoc( '5 par value Retained earnings &otal 'iabilities and uity
a$ $ c$ d$ e$
!"1!
) '25(""" note payale is retired at its '25(""" carrying .oo value/ in exchange for cash$ >he only changes affecting retained earnings are net incoe and cash dividends paid$ &e! equipent is acquired for '"(1"" cash$ Received cash for the sale of equipent that had cost '4,(,""( yielding a '2(4"" gain$ Prepaid expenses and 3ages payale relate to ;ther expenses on the incoe stateent$
'2(1"" 7(5"" 2(1"" 4(""" 2#2(""" 24("" '##,(""
'#2(#"" 17(""" #(,"" 71(""" 1,#(""" 7("" '#15("""
I*I+%, Inc Company Statement of Cash Flows - Direct Method For the year ended $une 3" !"13
%ash flo!s fro operating activities Receipts fro custoers Payents for erchandise Payents for other expenses Payents for incoe taxes &et cash provided y operating activities
I*I+%, I,C Income Statement For the year ended $une 3" !"13
'5#("" .#,(5""/ .74(2""/ .57(7""/ '1#5(5"" Debit
%ash )ccounts receivale( net ales
5#("" 1,(1""
%ost of goods sold )ccounts payale 0nventory %ash
41"(""" (2""
Credit
72("""
2(7"" #,(5""
;ther expenses 3ages payale Prepaid expenses %ash
("" (5""
0ncoe taxes expense 0ncoe taxes payale %ash
5(""" 1(7""
1("" 74(2""
ales %ost of goods sold ross profit ;perating expenses ;ther expenses '("" +epreciation expense 57(,"" >otal operating expenses
'72(""" 41"(""" 22("""
ain on sale of equipent 0ncoe efore taxes 0ncoe taxes expense &et incoe
124(4"" 1#7("" 2(4"" 14"(""" 5(""" ',4("""
I*I+%, I,C Comparati.e +alance Sheets $une 3" !"13 and !"1! !"13
%ash )ccounts receivale( net 0nventory Prepaid expenses )ccounts payale 3ages payale 0ncoe taxes payale
57(7""
e$ Prepaid expenses and 3ages payale relate to ;ther expenses on the incoe stateent$
'1""(,"" (7"" (1"" 4(#"" '2(1"" 7(5"" 2(1""
!"1!
'57(1"" 51("" 5(,"" (2"" '#2(#"" 17(""" #(,""
I*I+%, Inc Company Statement of Cash Flows - Direct Method For the year ended $une 3" !"13
%ash flo!s fro operating activities Receipts fro custoers Payents for erchandise Payents for other expenses Payents for incoe taxes &et cash provided y operating activities %ash flo!s fro investing activities %ash received fro sale of equipent '11(#"" %ash paid for equipent ."(1""/ &et cash used y investing activities
I*I+%, I,C Comparati.e +alance Sheets $une 3" !"13 and !"1! !"13
'5#("" .#,(5""/ .74(2""/ .57(7""/ '1#5(5""
.4,(,""/
!"1!
%ssets
Equipent )ccu$ +epreciation - Equipent &otal %ssets
Equipent 115(""" "(1"" 4,(,"" 12(#""
12(#"" .2,(""/ '##,(""
115(""" .1"(7""/ '#15("""
)ccu$ +epr 1"(7"" #("" 57(,"" 2,(""
c$ &e! equipent is acquired for '"(1"" cash$ d$ Received cash for the sale of equipent that had cost '4,(,""( yielding a '2(4"" gain$
0ncoe tateent: +epreciation expense ain on sale of equipent
'57(,"" 2(4""
%ost )ccuulated depreciation Doo Halue ain on sale of equipent %ash received fro sale
'4,(,"" .#(""/ ',("" 2(4"" '11(#""
I*I+%, I,C Comparati.e +alance Sheets $une 3" !"13 and !"1! !"13
I*I+%, Inc Company Statement of Cash Flows - Direct Method For the year ended $une 3" !"13
%ash flo!s fro operating activities Receipts fro custoers Payents for erchandise Payents for other expenses Payents for incoe taxes &et cash provided y operating activities %ash flo!s fro investing activities %ash received fro sale of equipent '11(#"" %ash paid for equipent ."(1""/ &et cash used y investing activities %ash flo!s fro financing activities %ash received fro stoc issuance '4(""" %ash paid to retire notes .25("""/ %ash paid for dividends .7("""/ &et cash used y financing activities &et increase in cash
'5#("" .#,(5""/ .74(2""/ .57(7""/ '1#5(5""
&otes payale .long-ter/ %oon stoc( '5 par value Retained earnings
a
.4,(,""/
71(""" 1,#(""" 7(""
) '25(""" note payale is retired at its '25(""" carrying .oo value/ in exchange for cash$
$ >he only changes affecting retained earnings are net incoe and cash dividends paid$ Retained Earnings
.4#("""/ '4#(7""
4(""" 2#2(""" 24(""
!"1!
7("""
7("" ,4(""" 24(""
I*I+%, I,C Comparati.e +alance Sheets $une 3" !"13 and !"1! !"13
I*I+%, Inc Company Statement of Cash Flows - Direct Method For the year ended $une 3" !"13
%ash flo!s fro operating activities Receipts fro custoers Payents for erchandise Payents for other expenses Payents for incoe taxes &et cash provided y operating activities %ash flo!s fro investing activities %ash received fro sale of equipent '11(#"" %ash paid for equipent ."(1""/ &et cash used y investing activities %ash flo!s fro financing activities %ash received fro stoc issuance '4(""" %ash paid to retire notes .25("""/ %ash paid for dividends .7("""/ &et cash used y financing activities &et increase in cash %ash alance at Fune #"( 2"12 %ash alance at Fune #"( 2"1#
'5#("" .#,(5""/ .74(2""/ .57(7""/ '1#5(5""
.4,(,""/
%ssets
%ash '1""(,"" )ccounts receivale( net (7"" 0nventory (1"" Prepaid expenses 4(#"" Equipent 12(#"" )ccu$ +epreciation - Equipent .2,(""/ &otal %ssets '##,(""
'57(1"" 51("" 5(,"" (2"" 115(""" .1"(7""/ '#15("""
'iabilities and euity
.4#("""/ '4#(7"" 57(1"" '1""(,""
)ccounts payale 3ages payale 0ncoe taxes payale &otes payale .long-ter/ %oon stoc( '5 par value Retained earnings &otal 'iabilities and uity
%opute the copanyBs cash flo! on total assets ratio for its fiscal year 2"1#$ ;perating cash flo!s )verage total assets
!"1!
'1#5(5"" .'#15(""" A '##,(""/ I 2
'1#5(5"" '#2(,""
41$5J
'2(1"" 7(5"" 2(1"" 4(""" 2#2(""" 24("" '##,(""
'#2(#"" 17(""" #(,"" 71(""" 1,#(""" 7("" '#15("""
Exercise 12-12 page 54(
Kapton %opany reports the follo!ing inforation for its recent calendar year$ Income Statement
ales %ost of goods sold '1""(""" alaries expense 24(""" +epreciation expense 12(""" &et incoe
'1"("""
'24("""
%hanges in current asset and current liaility accounts for the year that relate to operating activities follo!: )ccounts receivale 9erchandise inventory alaries payale
'1"(""" 0ncrease 1(""" +ecrease 1(""" 0ncrease
Prepare the operating activities section of the stateent of cash flo!s for Kapton %opany using the indirect ethod$
Income Statement
ales %ost of goods sold '1""(""" alaries expense 24(""" +epreciation expense 12(""" &et incoe
)ccounts receivale 9erchandise inventory alaries payale
'1"("""
'24("""
'1"(""" 0ncrease 1(""" +ecrease 1(""" 0ncrease
/ampton Company Company Statement of Cash Flows (partial) - Indirect Method For the year ended December 31 !"13
%ash flo!s fro operating activities &et incoe '24(""" )d*ustents to reconcile net incoe to operating cash flo!: +epreciation expense '12(""" 0ncrease in )ccounts receivale .1"("""/ +ecrease in 9erchandise inventory 1(""" 0ncrease in alaries payale 1(""" 1(""" &et cash provided y operating activities '4#("""
Kapton %opany reports the follo!ing inforation for its recent calendar year$ Income Statement
ales %ost of goods sold alaries expense +epreciation expense &et incoe
'7,(""" '#(""" 14(""" 5(""" '2"("""
)ccounts receivale '(""" 0ncrease 9erchandise inventory #(""" +ecrease alaries payale "" 0ncrease Prepare the operating activities section of the stateent of cash flo!s for Kapton %opany using the indirect ethod$
Kapton %opany reports the follo!ing inforation for its recent calendar year$ Income Statement
ales %ost of goods sold alaries expense +epreciation expense &et incoe
'7,(""" '#(""" 14(""" 5(""" '2"("""
)ccounts receivale '(""" 0ncrease 9erchandise inventory #(""" +ecrease alaries payale "" 0ncrease /ampton Company Company Statement of Cash Flows (partial) - Indirect Method
%ash flo!s fro operating activities &et incoe '2"(""" )d*ustents to reconcile net incoe to operating cash flo!: +epreciation expense '5(""" 0ncrease in )ccounts Receivale .("""/ +ecrease in 9erchandise 0nventory #(""" 0ncrease in alaries Payale "" 2("" &et cash provided y operating activities '22(""
Exercise 12-1, page 54(
>he follo!ing incoe stateent and inforation aout changes in noncash current assets and current liailities are reported$ %rundel Company Income Statement For the year ended December 31 !"13
Revenues ;perating expenses alaries expense =tilities expense +epreciation expense ;ther expenses >otal operating expenses &et loss
+ecrease in )ccounts receivale Purchased a 9achine 0ncrease in alaries payale +ecrease in ;ther accrued liailities
'1""(""" ',4(""" 14(""" 14("" #(4"" 11(""" .'1("""/
'24(""" '1"(""" 1,(""" ,("""
Prepare the operating activities section of the stateent of cash flo!s using the indirect ethod$
%rundel Company Income Statement For the year ended December 31 !"13
Revenues ;perating expenses alaries expense =tilities expense +epreciation expense ;ther expenses >otal operating expenses &et loss
'1""(""" ',4(""" 14(""" 14("" #(4"" 11(""" .'1("""/
%rundel Company Statement of Cash Flows (partial) - Indirect Method
%ash flo!s fro operating activities &et loss .'1("""/ )d*ustents to reconcile net incoe to operating cash flo!: +epreciation expense '14("" +ecrease in )ccounts receivale 24(""" 0ncrease in alaries payale 1,(""" +ecrease in ;ther accrued liailities .,("""/ &et cash provided y operating activities '#2(""
+ecrease in )ccounts receivale Purchased a 9achine 0ncrease in alaries payale +ecrease in ;ther accrued liailities
'24(""" '1"(""" 1,(""" ,("""
>he follo!ing incoe stateent and inforation aout changes in noncash current assets and current liailities are reported$ %rundel Company Income Statement For the year ended December 31 !"13
Revenues ;perating expenses alaries expense =tilities expense +epreciation expense ;ther expenses >otal operating expenses &et loss +ecrease in )ccounts Receivale Purchased a 9achine 0ncrease in alaries Payale +ecrease in ;ther )ccrued Ciailities
',5(""" '7"(""" #5(""" #1(4"" 7(2"" 14#("" .'5,(""/ '24(""" '2"(""" 2(""" 15("""
Prepare the operating activities section of the stateent of cash flo!s using the indirect ethod$
Statement of Cash Flows - Indirect Method
%rundel Company Income Statement For the year ended December 31 !"13
Revenues ;perating expenses alaries expense =tilities expense +epreciation expense ;ther expenses >otal operating expenses &et loss +ecrease in )ccounts Receivale Purchased a 9achine 0ncrease in alaries Payale +ecrease in ;ther )ccrued Ciailities
',5(""" '7"(""" #5(""" #1(4"" 7(2"" 14#("" .'5,(""/ '24(""" '2"(""" 2(""" 15("""
%rundel Company Statement of Cash Flows (partial) - Indirect Method
%ash flo!s fro operating activities &et loss .'5,(""/ )d*ustents to reconcile net incoe to operating cash flo!: +epreciation Expense '#1(4"" +ecrease in )ccounts Receivale 24(""" 0ncrease in alaries Payale 2(""" +ecrease in ;ther )ccrued Ciailities .15("""/ &et cash provided y operating activities '7(,""
%ash flo!s fro operating activities &et incoe .loss/ )d*ustents to reconcile net incoe to operating cash flo!: 0ncoe stateent ites .opposite direction/: A &oncash expenses .+epreciation( aorti assets - ain on sale of C> assets Dalance sheet ites: %hange in noncash operating assets .opposite direction/ A +ecreases in current operating assets - 0ncreases in current operating assets %hange in noncash operating liailities .sae direction/ A 0ncreases in current operating liailities - +ecreases in current operating liailities &et cash provided .used/ y operating activities
Exercise 12-14 page 54(
%oplete the follo!ing spreadsheet in preparation of the stateent of cash flo!s$ .>he stateent of cash flo!s is not required$/ Report operating activities under the indirect ethod a$ &et incoe for the year !as '1""("""$ $ +ividends of ',"(""" cash !ere declared and paid$ c$ coretecBs only noncash expense !as depreciation expense of '7"("""$
d$ >he copany purchased plant assets for '7"(""" cash$ e$ &otes payale of '2"(""" !ere issued for '2"(""" cash$
1!0310!"1!
Dalance sheet - deit alance accounts %ash )ccounts receivale( net 9erchandise inventory Plant assets Dalance sheet - credit alance accounts )ccu$ +epreciation - Equipent )ccounts payale &otes payale .long-ter/ %oon stoc( '5 par value Retained earnings
',"(""" 12"(""" 25"(""" ""(""" '1("5"(""" '1""(""" 15"(""" #7"(""" 2""(""" 2#"(""" '1("5"("""
Debit
7"(""" 7"("""
Credit
'"(""" 1"(""" 2"(""" 2#"(""" 7"(""" '1(15"(""" 7"("""
1"("""
,"("""
1!0310!"13
'17"(""" 14"(""" 2"(""" #"(""" 2""(""" 1""(""" 25"(""" '1(15"("""
a$ &et incoe for the year !as '1""("""$ $ +ividends of ',"(""" cash !ere declared and paid$ c$ coretecBs only noncash expense !as depreciation expense of '7"("""$
d$ >he copany purchased plant assets for '7"(""" cash$ e$ &otes payale of '2"(""" !ere issued for '2"(""" cash$
1!0310!"1!
Dalance sheet - deit alance accounts %ash )ccounts receivale( net 9erchandise inventory Plant assets Dalance sheet - credit alance accounts )ccu$ +epreciation - Equipent )ccounts payale &otes payale .long-ter/ %oon stoc( '5 par value Retained earnings
',"(""" 12"(""" 25"(""" ""(""" '1("5"(""" '1""(""" 15"(""" #7"(""" 2""(""" 2#"(""" '1("5"("""
tateent of %ash lo!s ;perating activities &et incoe +epreciation expense 0ncrease in )ccounts receivale( net +ecrease in 9erchandise inventory +ecrease in )ccounts payale
Debit
7"(""" 7"("""
1"("""
,"("""
'17"(""" 14"(""" 2"(""" #"(""" 2""(""" 1""(""" 25"(""" '1(15"("""
1""(""" 7"(""" 7"(""" 2"(""" 1"(""" 7"(""" ,"(""" 2"(""" '44"("""
1!0310!"13
'"(""" 1"(""" 2"(""" 2#"(""" 7"(""" '1(15"(""" 7"("""
0nvesting activities %ash paid to purchase plant assets inancing activities %ash paid for dividends %ash received fro note payale
Credit
'44"("""
%oplete the follo!ing spreadsheet in preparation of the stateent of cash flo!s$ .>he stateent of cash flo!s is not required$/ Report operating activities under the indirect ethod$ a$ $ c$ d$ e$
&et incoe for the year !as '24"("""$ +ividends of '144(""" cash !ere declared and paid$ coretecBs only noncash expense !as depreciation expense of '"("""$ >he copany purchased plant assets for '2(""" cash$ &otes payale of '7(""" !ere issued for '7(""" cash$ 1!0310!"1!
Dalance sheet - deit alance accounts %ash )ccounts receivale( net 9erchandise inventory Plant assets Dalance sheet - credit alance accounts )ccu$ +epreciation - Equipent )ccounts payale &otes payale .long-ter/ %oon stoc( '5 par value Retained earnings
Debit
Credit
1!0310!"13
'21,(""" 1#2(""" 274(""" 12(""" '1(2#("""
'2,(""" 211(""" 247(""" 7"4(""" '1(451("""
'1,4(""" 1(""" #,2(""" 22(""" 275(""" '1(2#("""
'244(""" 14(""" 45,(""" 22(""" #71(""" '1(451("""
a$ +ividends of '144(""" cash !ere declared and paid$ $ &et incoe for the year !as '24"("""$ c$ coretecBs only noncash expense !as depreciation expense of '"("""$ d$ >he copany purchased plant assets for '2(""" cash$ e$ &otes payale of '7(""" !ere issued for '7(""" cash$
1!0310!"1!
Debit
Credit
1!0310!"13
Dalance sheet - deit alance accounts %ash )ccounts receivale( net 9erchandise inventory Plant assets Dalance sheet - credit alance accounts )ccu$ +epreciation - Equipent )ccounts payale &otes payale .long-ter/ %oon stoc( '5 par value Retained earnings tateent of %ash lo!s ;perating activities &et incoe +epreciation expense 0ncrease in )ccounts receivale( net +ecrease in 9erchandise inventory +ecrease in )ccounts payale
'21,(""" 1#2(""" 274(""" 12(""" '1(2#(""" '1,4(""" 1(""" #,2(""" 22(""" 275(""" '1(2#("""
7(""" 2("""
'71("""
"("""
17("""
144("""
'244(""" 14(""" 7(""" 45,(""" 22(""" 24"(""" #71(""" '1(451("""
24"(""" "(""" 7(""" 27("""
0nvesting activities %ash paid to purchase plant assets inancing activities %ash paid for dividends %ash received fro note payale
'2,(""" 211(""" 27(""" 247(""" 7"4(""" '1(451("""
17("""
'2#1("""
2("""
.2("""/
144(""" 7(""" '7#5("""
.,("""/ '7#5("""
Exercise 12-15 page 55)
%ash and cash equivalents alance( +eceer #1( 2"12 %ash and cash equivalents alance( +eceer #1( 2"1# %ash received as interest %ash paid for salaries Donds payale retired y issuing coon stoc .no gain or loss on retireent/ %ash paid to retire long-ter notes payale %ash received fro sale of equipent %ash received in exchange for six-onth note payale Cand purchased y issuing long-ter note payale %ash paid for store equipent %ash dividends paid %ash paid for other expenses %ash received fro custoers %ash paid for erchandise
'4"(""" 14,(""" #(5"" 7(5"" 1,5(5"" 1""(""" "(25" #5(""" 1"5(25" 24(75" 1"(""" 2"(""" 45(""" 254(5""
=se the aove inforation aout the cash flo!s of erron %opany to prepare a coplete stateent of cash flo!s .direct ethod/ for the year ended +eceer #1( 2"1#$
%ash and cash equivalents alance( +eceer #1( 2"12 %ash and cash equivalents alance( +eceer #1( 2"1# %ash received as interest %ash paid for salaries Donds payale retired y issuing coon stoc .no gain or loss on retireent/ %ash paid to retire long-ter notes payale %ash received fro sale of equipent %ash received in exchange for six-onth note payale Cand purchased y issuing long-ter note payale %ash paid for store equipent %ash dividends paid %ash paid for other expenses %ash received fro custoers %ash paid for erchandise
'4"(""" 14,(""" #(5"" 7(5"" 1,5(5"" 1""(""" "(25" #5(""" 1"5(25" 24(75" 1"(""" 2"(""" 45(""" 254(5""
F2, C2M %,4 Statement of Cash Flows - Direct Method For the year ended December 31 !"13
%ash flo!s fro operating activities %ash received fro custoers %ash received as interest %ash paid for erchandise %ash paid for salaries %ash paid for other expenses
'45(""" #(5"" .254(5""/ .7(5""/ .2"("""/
&et cash provided y operating activities '147(5"" %ash flo!s fro investing activities %ash received fro sale of equipent '"(25" %ash paid for store equipent .24(75"/ &et cash provided y investing activities #5(5"" %ash flo!s fro financing activities %ash paid to retire long-ter notes payale .'1""("""/ %ash received in exchange for six-onth note payale#5(""" %ash dividends paid .1"("""/ &et cash used y financing activities &et increase in cash %ash and cash equivalents alance( +eceer #1( 2"12 %ash and cash equivalents alance( +eceer #1( 2"1# &oncash investing and financing activities: Donds payale retired y issuing coon stoc .no gain or loss on retireent/ Cand purchased y issuing long-ter note payale
.75("""/ '1",(""" 4"(""" '14,("""
'1,5(5"" '1"5(25"
%ash and cash equivalents alance( +eceer #1( 2"12 %ash and cash equivalents alance( +eceer #1( 2"1# %ash received as interest %ash paid for salaries Donds payale retired y issuing coon stoc .no gain or loss on retireent/ %ash paid to retire long-ter notes payale %ash received fro sale of equipent %ash received in exchange for six-onth note payale Cand purchased y issuing long-ter note payale %ash paid for store equipent %ash dividends paid %ash paid for other expenses %ash received fro custoers %ash paid for erchandise
'21(""" 5("52 2(1"" "("" 145(""" 1"5(""" 51(45" 21(""" ,4(1"" 1(5" 12("" ##("" 4"7(4"" 211(,4,
=se the aove inforation aout the cash flo!s of erron %opany to prepare a coplete stateent of cash flo!s .direct ethod/ for the year ended +eceer #1( 2"1#$
%ash Dondspurchased Cand and dividends received payale cash fro as retired equivalents paid y interest issuing sale custoers yof issuing long-ter equipent alance( coon +eceer note payale stoc#1( .no2"12 gain or loss on retireent/ %ash and received paidcash to retire for other salaries store erchandise in equivalents exchange long-ter equipent expenses alance( for notes six-onth payale +eceer note payale #1( 2"1#
'145(""" '4"7(4"" '21(""" ',4(1"" '51(45" '12("" '2(1"" '1"5(""" '211(,4, '5("52 '21(""" '"("" '##("" '1(5"
F2, C2M%,4 Statement of Cash Flows - Direct Method For the year ended December 31 !"13
%ash flo!s fro operating activities %ash received fro custoers %ash received as interest %ash paid for erchandise %ash paid for salaries %ash paid for other expenses
'4"7(4"" 2(1"" .211(,4,/ ."(""/ .##(""/
&et cash provided y operating activities '1"#(152 %ash flo!s fro investing activities %ash received fro sale of equipent '51(45" %ash paid for store equipent .1(5"/ &et cash provided y investing activities #1(5"" %ash flo!s fro financing activities %ash paid to retire long-ter notes payale .'1"5("""/ %ash received in exchange for six-onth note payale 21(""" %ash dividends paid .12(""/ &et cash used y financing activities &et increase in cash %ash and cash equivalents alance( +eceer #1( 2"12 %ash and cash equivalents alance( +eceer #1( 2"1# &oncash investing and financing activities: Donds payale retired y issuing coon stoc Cand purchased y issuing long-ter note payale
.(""/ '#,("52 21(""" '5("52
'145(""" ',4(1""
Exercise 12-1% page 551
>he follo!ing suari-account reflects the total deits and total credits to the %ash account of >hoas %orporation for calendar year 2"1#$ %ash Dalance( +ec$ #1( 2"12 Receipts fro custoers Receipts fro dividends Receipts fro land sale Receipts fro achinery sale Receipts fro issuing stoc Receipts fro orro!ing
Dalance( +ec$ #1( 2"1#
###(""" 5("""(""" 2",(4"" 22"(""" 71"(""" 1(54"(""" #(""("""
Payents for erchandise Payents for !ages Payents for rent Payents for interest Payents for taxes Payents for achinery Payents for long-ter investents Payents for note payale Payents for dividends Payents for treasury stoc
2(5"(""" 55"(""" #2"(""" 21,(""" 45"(""" 2(2#(""" 1(2"(""" #,(""" 5""(""" 21,("""
2(,,#(4"" @
=se this inforation to prepare a coplete stateent of cash f lo!s for year 2"1#$ >he cash provided or used y operating activities should e reported using the direct ethod$
%ash Dalance( +ec$ #1( 2"12 Receipts fro custoers Receipts fro dividends Receipts fro land sale Receipts fro achinery sale Receipts fro issuing stoc Receipts fro orro!ing
###(""" 5("""(""" 2",(4"" 22"(""" 71"(""" 1(54"(""" #(""("""
Dalance( +ec$ #1( 2"1#
2(,,#(4""
Payents for erchandise Payents for !ages Payents for rent Payents for interest Payents for taxes Payents for achinery Payents for long-ter investents Payents for note payale Payents for dividends Payents for treasury stoc
&/2M%S C2M%,4 Statement of Cash Flows - Direct Method For the year ended December 31 !"13
%ash flo!s fro operating activities %ash received fro custoers %ash received fro dividends %ash paid for erchandise %ash paid for !ages %ash paid for rent %ash paid for interest %ash paid for taxes &et cash provided y operating activities %ash flo!s fro investing activities %ash received fro sale of land %ash received fro sale of achinery %ash paid for purchases of achinery %ash paid for purchases of C> investents &et cash used y investing activities %ash flo!s fro financing activities %ash received fro issuing stoc %ash received fro orro!ing %ash paid for note payale %ash paid for dividends %ash paid for treasury stoc purchases &et cash provided y financing activities &et increase in cash Deginning alance of cash Ending alance of cash
'5("""(""" 2",(4"" .2(5"("""/ .55"("""/ .#2"("""/ .21,("""/ .45"("""/ '1(","(4""
22"(""" 71"(""" .2(2#("""/ .1(2"("""/ .2(5("""/
1(54"(""" #(""(""" .#,("""/ .5""("""/ .21,("""/ 4("#(""" '2(55"(4"" ###(""" '2(,,#(4""
2(5"(""" 55"(""" #2"(""" 21,(""" 45"(""" 2(2#(""" 1(2"(""" #,(""" 5""(""" 21,("""
>he follo!ing suari-account reflects the total deits and total credits to the %ash account of >hoas %orporation for calendar year 2"1#$ %ash Dalance( +ec$ #1( 2"12 Receipts fro custoers Receipts fro dividends Receipts fro land sale Receipts fro achinery sale Receipts fro issuing stoc Receipts fro orro!ing
Dalance( +ec$ #1( 2"1#
174(5"" (,"(""" 2"(""" #14(""" 42(""" 2("4(""" 2(51#("""
Payents for erchandise Payents for !ages Payents for rent Payents for interest Payents for taxes Payents for achinery Payents for long-ter investents Payents for note payale Payents for dividends Payents for treasury stoc
2("4(""" 1(152(""" 41(""" 1"5(""" #(""" 2(,#"(""" 1(1#"(""" 2("1"(""" 1(""(""" ,4"("""
2#(5""
=se this inforation to prepare a coplete stateent of cash f lo!s for year 2"1#$ >he cash provided or used y operating activities should e reported using the direct ethod$
&/2M%S C2M%,4 Statement of Cash Flows - Direct Method For the year ended December 31 !"13
%ash flo!s fro operating activities
%ash flo!s fro investing activities
%ash flo!s fro financing activities
Deginning alance of cash Ending alance of cash
174(5"" '2#(5""
&/2M%S C2M%,4 Statement of Cash Flows - Direct Method For the year ended December 31 !"13
%ash flo!s fro operating activities %ash received fro custoers %ash received fro dividends %ash paid for erchandise %ash paid for !ages %ash paid for rent %ash paid for interest %ash paid for taxes
'(,"(""" 2"(""" .2("4("""/ .1(152("""/ .41("""/ .1"5("""/ .#("""/
%ash flo!s fro investing activities %ash received fro sale of land %ash received fro sale of achinery %ash paid for purchases of achinery %ash paid for purchases of long-ter investents
#14(""" 42(""" .2(,#"("""/ .1(1#"("""/
%ash flo!s fro financing activities %ash received fro issuing stoc %ash received fro orro!ing %ash paid for note payale %ash paid for dividends %ash paid for treasury stoc purchases
2("4(""" 2(51#(""" .2("1"("""/ .1(""("""/ .,4"("""/
&/2M%S C2M%,4 Statement of Cash Flows - Direct Method For the year ended December 31 !"13
%ash flo!s fro operating activities %ash received fro custoers %ash received fro dividends %ash paid for erchandise %ash paid for !ages %ash paid for rent %ash paid for interest %ash paid for taxes &et cash provided y operating activities
'(,"(""" 2"(""" .2("4("""/ .1(152("""/ .41("""/ .1"5("""/ .#("""/ '2(45("""
%ash flo!s fro investing activities %ash received fro sale of land #14(""" %ash received fro sale of achinery 42(""" %ash paid for purchases of achinery .2(,#"("""/ %ash paid for purchases of long-ter investents .1(1#"("""/ &et cash used y investing activities .2(7"4("""/ %ash flo!s fro financing activities %ash received fro issuing stoc %ash received fro orro!ing %ash paid for note payale %ash paid for dividends %ash paid for treasury stoc purchases &et cash provided y financing activities &et increase in cash Deginning alance of cash Ending alance of cash
2("4(""" 2(51#(""" .2("1"("""/ .1(""("""/ .,4"("""/ 7(""" 44(""" 174(5"" '2#(5""
Exercise 12-17 page 551
) copany reported average total assets of '1(24"(""" in 2"12 and '1(51"(""" in 2"1#$ %alculate its cash flo! on total assets ratio for oth years$ !"1!
)verage total assets &et operating cash flo!
'1(24"(""" '1(51"(""" '1"2(2" '1#,(2"
,et operatin5 cash flow %.era5e total assets
2"12 2"1#
!"13
'1"2(2" I '1(24"(""" ? '1#,(2" I '1(51"(""" ?
Cash Flow on &otal %ssets
,$#J $2J
) copany reported average total assets of '2"(""" in 2"12 and '2,(""" in 2"1#$ %alculate its cash flo! on total assets ratio for oth years$ !"1!
)verage total assets &et operating cash flo!
2"12 2"1#
'2"(""" '1,(4"
!"13
'2,(""" '22(#",
,et operatin5 cash flow %.era5e total assets
Cash Flow on &otal %ssets
'1,(4" I '2"(""" ? '22(#", I '2,(""" ?
7$1J 7$,J
Exercise 12-1& page 551
Peugeot( $)$ reports the follo!ing financial inforation for the year ended +eceer #1( 2"11 .euros in illions/$ &et incoe &et decrease in !oring capital +epreciation and aorti
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