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12–120
30.
Kilduff Corporation’s balance sheet and income statement appear below:
Comparative Balance Sheet
Ending Balance
Beginning Balance
Assets:
Cash and cash equivalents
$36
$38
Accounts receivable
36
32
Inventory
49
55
Property, plant and equipment
707
580
Less accumulated depreciation
316
315
Total assets
$512
$390
Liabilities and stockholders’ equity:
Accounts payable
$71
$64
Accrued liabilities
22
19
Income taxes payable
34
41
Bonds payable
71
100
Common stock
32
30
Retained earnings
282
136
Total liabilities and stockholders’ equity
$512
$390
Income Statement
Sales
$1,174
Cost of goods sold
771
Gross margin
403
Selling and administrative expense
146
Net operating income
257
Gain on sale of equipment
14
Income before taxes
271
Income taxes
81
Net income
$190
The company sold equipment for $19 that was originally purchased for $10 and that had
accumulated depreciation of $5. The company paid a cash dividend of $44 and it did not
12–121
issue any bonds payable or repurchase any of its own common stock.
The net cash provided by (used in) investing activities for the year was:
12–122
31.
Kilduff Corporation’s balance sheet and income statement appear below:
Comparative Balance Sheet
Ending Balance
Beginning Balance
Assets:
Cash and cash equivalents
$36
$38
Accounts receivable
36
32
Inventory
49
55
Property, plant and equipment
707
580
Less accumulated depreciation
316
315
Total assets
$512
$390
Liabilities and stockholders’ equity:
Accounts payable
$71
$64
Accrued liabilities
22
19
Income taxes payable
34
41
Bonds payable
71
100
Common stock
32
30
Retained earnings
282
136
Total liabilities and stockholders’ equity
$512
$390
Income Statement
Sales
$1,174
Cost of goods sold
771
Gross margin
403
Selling and administrative expense
146
Net operating income
257
Gain on sale of equipment
14
Income before taxes
271
Income taxes
81
Net income
$190
The company sold equipment for $19 that was originally purchased for $10 and that had
accumulated depreciation of $5. The company paid a cash dividend of $44 and it did not
issue any bonds payable or repurchase any of its own common stock.
12–123
The net cash provided by (used in) financing activities for the year was:
12–124
32.
The change in each of Kendall Corporation’s balance sheet accounts last year follows:
Increase
Decrease
Cash
$3,000
Accounts Receivable
$2,000
Inventory
$3,000
Prepaid Expenses
$4,000
Long-term Investments
$15,000
Property, Plant and Equipment
$10,000
Accumulated Depreciation
$8,000
Accounts Payable
$9,000
Accrued Liabilities
$6,000
Bonds Payable
$13,000
Common Stock
$5,000
Retained Earnings
$4,000
Kendall Corporation’s income statement for the year was:
Sales
$300,000
Cost of goods sold
180,000
Gross margin
120,000
Selling and administrative expense
116,000
Net income
$4,000
There were no sales or retirements of property, plant, and equipment and no dividends
paid during the year. The company pays no income taxes and it did not purchase any long-
term investments, issue any bonds payable, or repurchase any of its own common stock.
The net cash provided by operating activities on the statement of cash flows is determined
using the direct method.
Using the direct method, sales adjusted to a cash basis would be:
12–125
12–126
33.
The change in each of Kendall Corporation’s balance sheet accounts last year follows:
Increase
Decrease
Cash
$3,000
Accounts Receivable
$2,000
Inventory
$3,000
Prepaid Expenses
$4,000
Long-term Investments
$15,000
Property, Plant and Equipment
$10,000
Accumulated Depreciation
$8,000
Accounts Payable
$9,000
Accrued Liabilities
$6,000
Bonds Payable
$13,000
Common Stock
$5,000
Retained Earnings
$4,000
Kendall Corporation’s income statement for the year was:
Sales
$300,000
Cost of goods sold
180,000
Gross margin
120,000
Selling and administrative expense
116,000
Net income
$4,000
There were no sales or retirements of property, plant, and equipment and no dividends
paid during the year. The company pays no income taxes and it did not purchase any long-
term investments, issue any bonds payable, or repurchase any of its own common stock.
The net cash provided by operating activities on the statement of cash flows is determined
using the direct method.
Using the direct method, the cost of goods sold adjusted to a cash basis would be:
12–127
12–128
34.
The change in each of Kendall Corporation’s balance sheet accounts last year follows:
Increase
Decrease
Cash
$3,000
Accounts Receivable
$2,000
Inventory
$3,000
Prepaid Expenses
$4,000
Long-term Investments
$15,000
Property, Plant and Equipment
$10,000
Accumulated Depreciation
$8,000
Accounts Payable
$9,000
Accrued Liabilities
$6,000
Bonds Payable
$13,000
Common Stock
$5,000
Retained Earnings
$4,000
Kendall Corporation’s income statement for the year was:
Sales
$300,000
Cost of goods sold
180,000
Gross margin
120,000
Selling and administrative expense
116,000
Net income
$4,000
There were no sales or retirements of property, plant, and equipment and no dividends
paid during the year. The company pays no income taxes and it did not purchase any long-
term investments, issue any bonds payable, or repurchase any of its own common stock.
The net cash provided by operating activities on the statement of cash flows is determined
using the direct method.
The selling and administrative expense adjusted to a cash basis would be:
12–129
12–130
35.
The change in each of Kendall Corporation’s balance sheet accounts last year follows:
Increase
Decrease
Cash
$3,000
Accounts Receivable
$2,000
Inventory
$3,000
Prepaid Expenses
$4,000
Long-term Investments
$15,000
Property, Plant and Equipment
$10,000
Accumulated Depreciation
$8,000
Accounts Payable
$9,000
Accrued Liabilities
$6,000
Bonds Payable
$13,000
Common Stock
$5,000
Retained Earnings
$4,000
Kendall Corporation’s income statement for the year was:
Sales
$300,000
Cost of goods sold
180,000
Gross margin
120,000
Selling and administrative expense
116,000
Net income
$4,000
There were no sales or retirements of property, plant, and equipment and no dividends
paid during the year. The company pays no income taxes and it did not purchase any long–
term investments, issue any bonds payable, or repurchase any of its own common stock.
The net cash provided by operating activities on the statement of cash flows is determined
using the direct method.
The net cash provided (used) by investing activities would be:
12–131
12–132
36.
The change in each of Kendall Corporation’s balance sheet accounts last year follows:
Increase
Decrease
Cash
$3,000
Accounts Receivable
$2,000
Inventory
$3,000
Prepaid Expenses
$4,000
Long-term Investments
$15,000
Property, Plant and Equipment
$10,000
Accumulated Depreciation
$8,000
Accounts Payable
$9,000
Accrued Liabilities
$6,000
Bonds Payable
$13,000
Common Stock
$5,000
Retained Earnings
$4,000
Kendall Corporation’s income statement for the year was:
Sales
$300,000
Cost of goods sold
180,000
Gross margin
120,000
Selling and administrative expense
116,000
Net income
$4,000
There were no sales or retirements of property, plant, and equipment and no dividends
paid during the year. The company pays no income taxes and it did not purchase any long-
term investments, issue any bonds payable, or repurchase any of its own common stock.
The net cash provided by operating activities on the statement of cash flows is determined
using the direct method.
The net cash provided (used) by financing activities would be:
12–133
12–134
37.
The changes in Northrup Corporation’s balance sheet account balances for last year
appear below:
Increases
(Decreases)
Asset and Contra-Asset Accounts:
Cash
$4,000
Accounts receivable
($4,000)
Inventory
($2,000)
Prepaid expenses
$2,000
Long-term investments
$40,000
Property, plant and equipment
$25,000
Accumulated depreciation
$68,000
Liability and Equity Accounts:
Accounts payable
($6,000)
Accrued liabilities
$8,000
Income taxes payable
($8,000)
Bonds payable
($70,000)
Common stock
$10,000
Retained earnings
$63,000
The company’s income statement for the year appears below:
Income Statement
Sales
$980,000
Cost of goods sold
540,000
Gross margin
440,000
Selling and administrative expense
310,000
Net operating income
130,000
Income taxes
39,000
Net income
$91,000
The company declared and paid $28,000 in cash dividends during the year. It did not
dispose of any property, plant, and equipment during the year. The company uses the
12–135
direct method to determine the net cash provided by operating activities.
On the statement of cash flows, the sales adjusted to a cash basis would be:
12–136
38.
The changes in Northrup Corporation’s balance sheet account balances for last year
appear below:
Increases
(Decreases)
Asset and Contra-Asset Accounts:
Cash
$4,000
Accounts receivable
($4,000)
Inventory
($2,000)
Prepaid expenses
$2,000
Long-term investments
$40,000
Property, plant and equipment
$25,000
Accumulated depreciation
$68,000
Liability and Equity Accounts:
Accounts payable
($6,000)
Accrued liabilities
$8,000
Income taxes payable
($8,000)
Bonds payable
($70,000)
Common stock
$10,000
Retained earnings
$63,000
The company’s income statement for the year appears below:
Income Statement
Sales
$980,000
Cost of goods sold
540,000
Gross margin
440,000
Selling and administrative expense
310,000
Net operating income
130,000
Income taxes
39,000
Net income
$91,000
The company declared and paid $28,000 in cash dividends during the year. It did not
dispose of any property, plant, and equipment during the year. The company uses the
12–137
direct method to determine the net cash provided by operating activities.
On the statement of cash flows, the cost of goods sold adjusted to a cash basis would be:
39.
The changes in Northrup Corporation’s balance sheet account balances for last year
appear below:
Increases
(Decreases)
Asset and Contra-Asset Accounts:
Cash
$4,000
Accounts receivable
($4,000)
Inventory
($2,000)
Prepaid expenses
$2,000
Long-term investments
$40,000
Property, plant and equipment
$25,000
Accumulated depreciation
$68,000
Liability and Equity Accounts:
Accounts payable
($6,000)
Accrued liabilities
$8,000
Income taxes payable
($8,000)
Bonds payable
($70,000)
Common stock
$10,000
Retained earnings
$63,000
Cost of goods sold
Gross margin
Selling and administrative expense
Net operating income
Income taxes
Net income
12–139
direct method to determine the net cash provided by operating activities.
On the statement of cash flows, the selling and administrative expense adjusted to a cash
basis would be:
