Chapter 12
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Chapter 12
Chapter 12
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210. Review the data for Eastern Corp.
Required
(A) What amount was paid to retire bonds payable during 2018?
(B) How would the transaction to retire bonds by issuing common stock be reported on the statement of cash flows for
2018 for Eastern Corp.?
Chapter 12
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211. Review the data for Eastern Corp.
Required
(A) What amount of cash was collected from customers during 2018?
(B) What is the amount paid for purchases of merchandise during 2018?
(C) What is the amount paid for operating expenses during 2018?
Chapter 12
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212. Review the data for Eastern Corp.
Required
(A) What amount was paid to acquire equipment during 2018?
(B) What amount was recorded as depreciation expense during 2018?
(C) What amount was declared and paid for dividends during 2018?
213. Review the data for Eastern Corp.
Required
Prepare the Operating Activities section of statement of cash flows for Eastern Corp. for 2018 if the direct method is used
to determine net cash flow from operating activities.
Chapter 12
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214. Review the data for Eastern Corp.
Required
(A) Prepare the Investing Activities section of a statement of cash flows for 2018 for Eastern Corp.
(B) Prepare the Financing Activities section of a statement of cash flows for 2018 for Eastern Corp.
Chapter 12
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215. Review the data for Eastern Corp.
Required
Prepare the Operating Activities section of a statement of cash flows for Eastern Corp. for 2018 if the indirect method is
used to determine net cash flow from operating activities.
Chapter 12
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216. Selected data from the financial statements of Zayri Corporation for the years ended December 31, 2017 and 2018,
are presented below.
(In thousands) 2018 2017
Cash and cash equivalents $ ? $ 4,506
Total current assets (except cash) 149,978 132,335
Income taxes paid 2,142 767
Interest paid 5,073 5,597
Net cash provided by operating activities 3,103 5,221
Net cash used by investing activities 2,853 3,278
Net cash provided by financing activities 1,323 6,891
Depreciation and amortization 3,479 2,770
Total stockholders’ equity 103,253 94,843
Net income 1,877 1,223
Required
What is the amount of cash and cash equivalents at the end of 2018?
Chapter 12
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217. Grasso Corp. reported accounts receivable of $38,000 on its December 31, 2017, balance sheet. On December 31,
2018, accounts receivable had decreased to $29,000. Sales for the year amounted to $57,000. What is the amount of cash
collections that Grasso will report in the Operating Activities section of its 2018 statement of cash flows assuming that the
direct method is used?
Chapter 12
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218. Springfield Company’s comparative balance sheets included inventory of $89,700 at December 31, 2017, and
$73,300 at December 31, 2018. Springfield’s comparative balance sheets also included accounts payable of $54,400 at
December 31, 2017, and $38,100 at December 31, 2018. Springfield’s accounts payable balances are composed solely of
amounts due to suppliers for purchases of inventory on account. Cost of goods sold, as reported by Springfield on its 2018
income statement, amounted to $750,800. What is the amount of cash payments for inventory that Springfield will report
in the Operating Activities section of its 2018 statement of cash flows assuming that the direct method is used?
Chapter 12
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219. Columbus Company prepays the rent on various office facilities. The beginning balance in Prepaid Rent was $9,500,
and the ending balance was $7,200. The income statement reports Rent Expense of $45,800.
Required
Under the direct method, what amount would appear for cash paid in rent in the Operating Activities section of the
statement of cash flows? Show your work.
Chapter 12
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Iowa Industries Inc.
Selected data from the financial statements of Iowa Industries Inc. for the years ended December 31, 2018 and 2017, are
presented below. Also, certain assumptions are presented. Use these data and assumptions to answer the questions that
follow.
(In millions) 2018 2017
Property, plant and equipment $11,142.3 $10,868.4
Accumulated depreciation 3,519.0 3,461.0
Investments 375.1 394.4
Long-term debt 1,440.2 1,242.6
Short-term debt 44.0 45.2
Common stock 594.5 567.2
Treasury – common stock (20.6) (20.6)
Reinvested income (retained earnings) 3,522.9 3,425.9
Net income 770.4 712.7
Assumptions:
(1)
Cash additions to property, plant, and equipment during 2018 were $550.0. An additional $86.2 of plant assets
were acquired through debt in a noncash transaction. Depreciation expense for 2018 was $343.3. Gains on disposals of
property, plant, and equipment during 2019 were $27.7.
(2)
The cash proceeds from the sale of investments in 2018 were $82.7. There was a $17.8 gain on the sale of the
investments.
(3) Proceeds from long-term debt issued during 2018 were $167.7.
(4) The issuance of common stock totaled $28.6 in 2018.
(5)
During 2018, $389.4 in cash was used to purchase and retire common stock. A total of $365.4 of the cost was
recorded as an increase to Reinvested Income.
(6)
Net income, dividends declared/paid, and the $365.4 amount in (5) were the only items that affected reinvested
income during 2018.
Chapter 12
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220. Review the data and assumptions for Iowa Industries Inc.
Required
(A) What was the cost of the property, plant, and equipment that was disposed of during 2018?
(B) What was the amount of accumulated depreciation on the property, plant, and equipment disposed of during 2018?
(C) Assuming that the book value of the property, plant, and equipment disposed of during 2018 was $76.9, what were the
cash proceeds from the disposal of property, plant, and equipment for 2018?
Chapter 12
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221. Review the data and assumptions for Iowa Industries Inc.
Required
(A) What was the cost of the investments purchased during 2018?
(B) What was the amount paid to retire long-term debt during 2018?
222. Craft Corp. began operations on January 1, 2017. The statement of cash flows for the first year reported dividends
paid of $160,000. The balance sheet at the end of the first year reported $40,000 in dividends payable and $580,000 in
ending retained earnings. Determine Craft’s net income for its first year of operations.