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125.
Thunder Corporation’s balance sheet and income statement appear below:
Comparative Balance Sheet
Ending Balance
Beginning Balance
Assets:
Cash and cash equivalents
$28
$31
Accounts receivable
60
65
Inventory
41
42
Property, plant, and equipment
454
380
Less accumulated depreciation
206
172
Total assets
$377
$346
Liabilities and stockholders’ equity:
Accounts payable
$43
$45
Bonds payable
190
260
Common stock
41
40
Retained earnings
103
1
Total liabilities and stockholders’ equity
$377
$346
Income Statement
Sales
$874
Cost of goods sold
533
Gross margin
341
Selling and administrative expense
161
Net operating income
180
Income taxes
54
Net income
$126
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
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declared and paid a cash dividend of $24.
Required:
Prepare a statement of cash flows in good form using the indirect method.
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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
Adjustments to convert net income to a cash basis:
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.
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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
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cash flows for the year.
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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
Net income
Net cash provided by operating activities
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.
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