12-158
126. Marks Corporation’s balance sheet appears below:
Comparative Balance Sheet
Ending Balance Beginning Balance
Assets:
Cash and cash equivalents $47 $37
Accounts receivable 53 57
Inventory 63 60
Property, plant and equipment 548 440
Less accumulated depreciation 295 255
Total assets $416 $339
Liabilities and stockholders’ equity:
Accounts payable $52 $50
Bonds payable 260 250
Common stock 51 50
Retained earnings 53 (11)
Total liabilities and stockholders’ equity $416 $339
Net income for the year was $77. Cash dividends were $13. The company did not dispose of any
property, plant, and equipment, retire any bonds payable, or repurchase any of its own common
stock during the year.
Required:
Prepare a statement of cash flows in good form using the indirect method.
12-160
127. Burns Corporation’s net income last year was $91,000. Changes in the company’s balance
sheet accounts for the year appear below:
Increases
(Decreases)
Asset and Contra-Asset Accounts:
Cash $19,000
Accounts receivable $13,000
Inventory ($16,000)
Prepaid expenses $4,000
Long-term investments $10,000
Property, plant and equipment $70,000
Accumulated depreciation $31,000
Liability and Equity Accounts:
Accounts payable ($18,000)
Accrued liabilities $16,000
Income taxes payable $4,000
Bonds payable ($60,000)
Common stock $40,000
Retained earnings $87,000
The company did not dispose of any property, plant, and equipment, sell any long-term
investments, issue any bonds payable, or repurchase any of its own common stock during the
year. The company declared and paid a cash dividend of $4,000.
Required:
a. Construct in good form the operating activities section of the company’s statement of cash
flows for the year. (Use the indirect method.)
b. Construct in good form the investing activities section of the company’s statement of cash
flows for the year.
c. Construct in good form the financing activities section of the company’s statement of cash
flows for the year.
12-163
128. Mattix Corporation’s balance sheet and income statement appear below:
Comparative Balance Sheet
Ending Balance Beginning Balance
Assets:
Cash and cash equivalents $23 $22
Accounts receivable 39 40
Inventory 43 44
Property, plant and equipment 587 500
Less accumulated depreciation 359 347
Total assets $333 $259
Liabilities and stockholders’ equity:
Accounts payable $30 $26
Accrued liabilities 15 18
Income taxes payable 39 40
Bonds payable 109 120
Common stock 51 50
Retained earnings 89 5
Total liabilities and stockholders’ equity $333 $259
Income Statement
Sales $972
Cost of goods sold 620
Gross margin 352
Selling and administrative expense 200
Net operating income 152
Gain on sale of equipment 14
Income before taxes 166
Income taxes 50
Net income $116
The company sold equipment for $20 that was originally purchased for $7 and that had
accumulated depreciation of $1. It paid a cash dividend during the year and did not issue any
bonds payable or repurchase any of its own common stock.
Required:
Determine the net cash provided by (used in) operating activities for the year using the indirect
method.
12-165
129. Beltram Corporation’s balance sheet and income statement appear below:
Comparative Balance Sheet
Ending Balance Beginning Balance
Assets:
Cash and cash equivalents $30 $26
Accounts receivable 37 43
Inventory 67 63
Property, plant and equipment 601 560
Less accumulated depreciation 377 360
Total assets $358 $332
Liabilities and stockholders’ equity:
Accounts payable $42 $46
Accrued liabilities 23 22
Income taxes payable 39 39
Bonds payable 141 170
Common stock 63 60
Retained earnings 50 (5)
Total liabilities and stockholders’ equity $358 $332
Income Statement
Sales $710
Cost of goods sold 437
Gross margin 273
Selling and administrative expense 176
Net operating income 97
Income taxes 29
Net income $68
12-166
The company did not dispose of any property, plant, and equipment, issue any bonds payable, or
repurchase any of its own common stock during the year. The company declared and paid a cash
dividend of $13.
Required:
Prepare a statement of cash flows in good form using the indirect method.
12-168
130. NOTE TO THE INSTRUCTOR:
The problem requirement does not indicate whether the indirect or direct method must be used
to determine the net cash provided by operating activities. You can, if you choose, specify that
either (or even both) methods be used. The solution contains solutions for both methods.
Dauber Corporation’s comparative balance sheet and income statement for last year appear
below:
Comparative Balance Sheet
Ending Balance Beginning Balance
Cash $64,000 $39,000
Accounts receivable 57,000 44,000
Inventory 58,000 70,000
Prepaid expenses 18,000 10,000
Long-term investments 290,000 230,000
Property, plant and equipment 520,000 520,000
Less accumulated depreciation 390,000 358,000
Total assets $617,000 $555,000
Accounts payable $14,000 $38,000
Accrued liabilities 35,000 17,000
Income taxes payable 69,000 40,000
Bonds payable 160,000 180,000
Common stock 140,000 110,000
Retained earnings 199,000 170,000
Total liabilities and stockholders’ equity $617,000 $555,000
Income Statement
Sales $580,000
Cost of goods sold 250,000
Gross margin 330,000
Selling and administrative expense 210,000
Net operating income 120,000
Income taxes 36,000
Net income $84,000
12-169
The company declared and paid a cash dividend of $55,000 during the year. It did not sell any
long-term investments, issue any bonds payable, or repurchase any of its own common stock.
Required:
a. Construct in good form the operating activities section of the company’s statement of cash
flows for the year.
b. Construct in good form the investing activities section of the company’s statement of cash
flows for the year.
c. Construct in good form the financing activities section of the company’s statement of cash
flows for the year.
131. Clayborn Corporation’s net cash provided by operating activities was $111,000; its net
income was $101,000; its income taxes were $43,000; its capital expenditures were $90,000; and
its cash dividends were $28,000.
Required:
Determine the company’s free cash flow.
12-172
132. Dukas Corporation’s net cash provided by operating activities was $218,000; its net
income was $203,000; its capital expenditures were $146,000; and its cash dividends were
$49,000.
Required:
Determine the company’s free cash flow.