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43. Van Beeber Corporation's comparative balance sheet and income statement for last year
appear below:
Comparative Balance Sheet
Ending Balance Beginning Balance
Cash $58,000 $34,000
Accounts receivable 48,000 36,000
Inventory 56,000 67,000
Prepaid expenses 24,000 16,000
Long-term investments 280,000 220,000
Property, plant and equipment 580,000 580,000
Less accumulated depreciation 270,000 235,000
Total assets $776,000 $718,000
Accounts payable $32,000 $53,000
Accrued liabilities 38,000 21,000
Income taxes payable 61,000 31,000
Bonds payable 90,000 120,000
Common stock 80,000 60,000
Retained earnings 475,000 433,000
Total liabilities and stockholders’ equity $776,000 $718,000
Income Statement
Sales $700,000
Cost of goods sold 360,000
Gross margin 340,000
Selling and administrative expense 210,000
Net operating income 130,000
Income taxes 39,000
Net income $91,000
The company declared and paid $49,000 in cash dividends during the year. It did not sell or retire
any property, plant, and equipment during the year. The company uses the 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:
44. Van Beeber Corporation's comparative balance sheet and income statement for last year
appear below:
Comparative Balance Sheet
Ending Balance Beginning Balance
Cash $58,000 $34,000
Accounts receivable 48,000 36,000
Inventory 56,000 67,000
Prepaid expenses 24,000 16,000
Long-term investments 280,000 220,000
Property, plant and equipment 580,000 580,000
Less accumulated depreciation 270,000 235,000
Total assets $776,000 $718,000
Accounts payable $32,000 $53,000
Accrued liabilities 38,000 21,000
Income taxes payable 61,000 31,000
Bonds payable 90,000 120,000
Common stock 80,000 60,000
Retained earnings 475,000 433,000
Total liabilities and stockholders’ equity $776,000 $718,000
Income Statement
Sales $700,000
Cost of goods sold 360,000
Gross margin 340,000
Selling and administrative expense 210,000
Net operating income 130,000
Income taxes 39,000
Net income $91,000
The company declared and paid $49,000 in cash dividends during the year. It did not sell or retire
any property, plant, and equipment during the year. The company uses the 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:
45. Van Beeber Corporation's comparative balance sheet and income statement for last year
appear below:
Comparative Balance Sheet
Ending Balance Beginning Balance
Cash $58,000 $34,000
Accounts receivable 48,000 36,000
Inventory 56,000 67,000
Prepaid expenses 24,000 16,000
Long-term investments 280,000 220,000
Property, plant and equipment 580,000 580,000
Less accumulated depreciation 270,000 235,000
Total assets $776,000 $718,000
Accounts payable $32,000 $53,000
Accrued liabilities 38,000 21,000
Income taxes payable 61,000 31,000
Bonds payable 90,000 120,000
Common stock 80,000 60,000
Retained earnings 475,000 433,000
Total liabilities and stockholders’ equity $776,000 $718,000
Income Statement
Sales $700,000
Cost of goods sold 360,000
Gross margin 340,000
Selling and administrative expense 210,000
Net operating income 130,000
Income taxes 39,000
Net income $91,000
The company declared and paid $49,000 in cash dividends during the year. It did not sell or retire
any property, plant, and equipment during the year. The company uses the 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:
46. Van Beeber Corporation's comparative balance sheet and income statement for last year
appear below:
Comparative Balance Sheet
Ending Balance Beginning Balance
Cash $58,000 $34,000
Accounts receivable 48,000 36,000
Inventory 56,000 67,000
Prepaid expenses 24,000 16,000
Long-term investments 280,000 220,000
Property, plant and equipment 580,000 580,000
Less accumulated depreciation 270,000 235,000
Total assets $776,000 $718,000
Accounts payable $32,000 $53,000
Accrued liabilities 38,000 21,000
Income taxes payable 61,000 31,000
Bonds payable 90,000 120,000
Common stock 80,000 60,000
Retained earnings 475,000 433,000
Total liabilities and stockholders’ equity $776,000 $718,000
Income Statement
Sales $700,000
Cost of goods sold 360,000
Gross margin 340,000
Selling and administrative expense 210,000
Net operating income 130,000
Income taxes 39,000
Net income $91,000
The company declared and paid $49,000 in cash dividends during the year. It did not sell or retire
any property, plant, and equipment during the year. The company uses the direct method to
determine the net cash provided by operating activities.
On the statement of cash flows, the income tax expense adjusted to a cash basis would be:
47. Hayward Corporation had net sales of $610,000 and cost of goods sold of $360,000 for
the just completed year. Shown below are the beginning and ending balances for the year of
various accounts:
Ending Beginning
Cash $42,000 $31,000
Accounts receivable $87,000 $72,000
Inventory $96,000 $83,000
Accounts payable $23,000 $29,000
The company prepares its statement of cash flows using the direct method.
On its statement of cash flows, what amount should Howard show for its net sales adjusted to a
cash basis (i.e., cash received from sales)?
48. Hayward Corporation had net sales of $610,000 and cost of goods sold of $360,000 for
the just completed year. Shown below are the beginning and ending balances for the year of
various accounts:
Ending Beginning
Cash $42,000 $31,000
Accounts receivable $87,000 $72,000
Inventory $96,000 $83,000
Accounts payable $23,000 $29,000
The company prepares its statement of cash flows using the direct method.
On its statement of cash flows, what amount should Howard show for its cost of goods sold
adjusted to a cash basis (i.e., cash paid to suppliers)?
12-72
49. Comparative balance sheets and the income statements for Ellis Corporation are
presented below:
Comparative Balance Sheet
Ending
Balance Beginning
Balance
Assets
Current assets:
Cash $45,000 $30,000
Accounts receivable 38,000 40,000
Inventory 67,000 60,000
Total current assets 150,000 130,000
Long-term investments 162,000 200,000
Property, plant and equipment 278,000 150,000
Less accumulated depreciation 52,000 50,000
Total assets $538,000 $430,000
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $36,000 $40,000
Accrued liabilities 24,000 30,000
Income taxes payable 15,000 20,000
Total current liabilities 75,000 90,000
Bonds payable 120,000 30,000
Total liabilities 195,000 120,000
Stockholders' equity:
Common stock 295,000 270,000
Retained earnings 48,000 40,000
Total stockholders' equity 343,000 310,000
Total liabilities and stockholders' equity $538,000 $430,000
Income Statement
Sales $150,000
Costs of goods sold 76,500
Gross margin 73,500
Selling and administrative expense 16,000
Net operating income 57,500
12-73
Loss on sale of investment 2,500
Income before taxes 55,000
Income taxes 22,000
Net income $33,000
The following additional information is available for the year:
* During the year, the company sold long-term investments for $35,500 that had been purchased
for $38,000.
* The company did not sell any property, plant, and equipment during the year or repurchase any
of its own common stock.
* All sales were on credit.
* The company paid a cash dividend of $25,000.
* The company paid cash to retire $15,000 of bonds payable.
Required:
a. Using the indirect method, determine the net cash provided by operating activities.
b. Using the direct method, determine the net cash provided by operating activities.
c. Using the net cash provided by operating activities amount from either part a or b, prepare a
statement of cash flows.
12-76
50. Harkey Corporation's balance sheet and income statement appear below:
Comparative Balance Sheet
Ending Balance Beginning
Balance
Assets:
Cash and cash equivalents $32 $35
Accounts receivable 74 71
Inventory 41 42
Property, plant and equipment 443 370
Less accumulated depreciation 194
164
Total assets $396 $354
Liabilities and stockholders' equity:
Accounts payable $26 $28
Accrued liabilities 28 25
Income taxes payable 40 36
Bonds payable 120 170
Common stock 83 80
Retained earnings 99
15
Total liabilities and stockholders' equity $396
$354
Income Statement
Sales $923
Cost of goods sold 604
Gross margin 319
Selling and administrative expense 169
Net operating income 150
Gain on sale of equipment 11
Income before taxes 161
Income taxes 48
Net income $113
12-77
Cash dividends were $29. The company sold equipment for $15 that was originally purchased for
$6 and that had accumulated depreciation of $2.
Required:
Using the direct method, determine the net cash provided by operating activities.
