# Dolly Co. sold a machine that cost \$74,000 and had a book value of \$44,000 for\$48,000

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## Description

Dolly Co. sold a machine that cost \$74,000 and had a book value of \$44,000 for\$48,000. Data from Milner’s comparative balance sheets are:
12/31/15
12/31/14
Machinery
\$800,000
\$670,000
Accumulated depreciation
190,000
136,000
Instructions
What four items should be shown on a statement of cash flows ( indirect method) fromthis information? Show your calculations.

Presented below is the income statement of Patsy, Inc.:
Sales revenue
\$380,000
Cost of goods sold
225,000
Gross profit
\$155,000
Operating expenses
85,000
Income before income taxes 70,000
Income taxes
28,000
Net income
\$ â€˜s 42,000
In addition, the following information related to net changes in working capital ispresented:
Debit
Credit
Cash \$12,000
Accounts receivable 20,000
Inventories
\$19,400
Salaries payable (operating expenses)
Accounts payable
14,000
Income taxes payable 3,000

8,000

The company also indicates that depreciation expense for the year was \$16,700 andthat the deferred tax liability account increased \$2,600.
Instructions
Prepare a schedule computing the net cash flow from operating activities that would beshown on a statement of cash flows using the indirect method.

Ledler Corporation’s balance sheet reported the following:

Capital stock outstanding, 5,000 shares, par \$30 per share
Paid-in capital in excess of par 80,000
Retained earnings 100,000

\$150,000

The following transactions occurred this year:
(a) Purchased 200 shares of capital stock to be held as treasury stock, paying \$60 pershare.
(b) Sold 150 of the shares of treasury stock at \$65 per share.
(c) Sold the remaining shares of treasury stock at \$50 per share.
Instructions
Prepare the journal entry for these transactions under the cost method of accounting fortreasury stock.
The following information pertains to Parsons Co.:
Preferred stock, cumulative:
Par value per share \$100
Dividend rate
8%
Shares outstanding 10,000
Dividends in arrears none
Common stock:
Par value per share \$10
Shares issued
120,000
Dividends paid per share
\$2.10
Market price per share
\$48.00
\$500,000
Unappropriated retained earnings (after closing) \$270,000
Retained earnings appropriated for contingencies
\$300,000
Common treasury stock:
Number of shares 10,000
Total cost \$250,000
Net income \$630,000
Instructions
Compute (assume no changes in balances during the past year):
(a) Total amount of stockholdersâ€™ equity in the balance sheet
(b) Earnings per share of common stock
(c) Book value per share of common stock
(d) Payout ratio of common stock
(e) Return on common stock equity
On January 1, 2015, Warren Corporation had 1,000,000 shares of common stockoutstanding. On March 1, the corporation issued 150,000 new shares to raise additionalcapital. On July 1, the corporation declared and issued a 2-for-1 stock split. On October

1, the corporation purchased on the market 500,000 of its own outstanding shares andretired them.
Instructions
Compute the weighted average number of shares to be used in computing earnings pershare for 2015.

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