acct 212 homework 2 chapter 16

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   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 .gif” alt=”incorrect”>

Cash
flows from investing activities

Cash
paid for dividends
.gif” alt=”incorrect”>

.gif” alt=”incorrect”>

Cash
received from stock issuance
.gif” alt=”incorrect”>

.gif” alt=”incorrect”>


Net
cash used in in investing activities

40,000 .gif” alt=”incorrect”>

Cash
flows from financing activities

Cash
paid for equipment
.gif” alt=”incorrect”>

.gif” alt=”incorrect”>

Cash
paid to retire notes

Cash
received from sale of equipment
.gif” alt=”incorrect”>

.gif” alt=”incorrect”>


Net
cash used in in financing activities

-28,400 .gif” alt=”incorrect”>


Net
increase in cash

$ 65,000 .gif” alt=”incorrect”>

Cash
balance at beginning of year

56,900


Cash
balance at end of year

$ 121,900 .gif” alt=”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 .gif” alt=”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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