12-141
186.
The following selected account balances are taken from a merchandising company’s
records:
Dec.
31,
2017
Dec.
31,
2016
For the
Year
2017
Merchandise
inventory
$15,600
$21,200
Accounts receivable
42,000
36,000
Accounts payable
32,400
27,400
Salaries payable
4,400
3,000
Total assets
234,000
286,000
Sales
$312,000
Cost of goods sold
165,600
Salaries expense
48,000
(a) Calculate the cash payments made during 2017 for merchandise. Assume all of the
company’s accounts payable balances result from merchandise purchases.
(b) Calculate the cash receipts from customer sales during 2017.
(c) Calculate the cash payments for salaries during 2017.
$5,600 =
Increase in accounts receivable =
12-143
187.
Use the following calendar-year information to prepare Adam Company’s statement of
cash flows using the direct method.
Cash paid to purchase machinery
$124,000
Cash paid for merchandise inventory
220,000
Cash paid for operating expenses
280,000
Cash paid for interest
4,000
Cash received for interest
10,000
Cash proceeds from sale of land
100,000
Cash balance at beginning of year
15,000
Cash balance at end of year
77,000
Cash borrowed on a short-term note
25,000
Cash dividends paid
24,000
Cash received from stock issuance
57,000
Cash collections from customers
522,000
Cash received for interest
12-145
188.
For each of the following separate cases, use the information provided to calculate the
missing cash inflow or cash outflow using the direct method.
(a)
Accounts receivable balances:
Beginning of year
$60,000
End of year
57,000
Sales revenue (all on credit)
375,000
Cash received from customers
$
(b)
Accounts payable balances:
Beginning of year
$42,000
End of year
45,000
Merchandise inventory balances:
Beginning of year
50,000
End of year
47,500
Cost of goods sold
250,000
Cash paid for merchandise
inventory
$
(c)
Interest payable balances:
Beginning of year
$7,500
End of year
9,200
Interest expense
35,000
Cash paid for interest
$
(a)
Sales Revenue
12-147
189.
For each of the following separate cases, use the information provided to calculate the
missing cash inflow or cash outflow using the direct method.
(a)
Accounts receivable balances:
Beginning of year
$60,000
End of year
63,000
Sales revenue (all on credit)
395,000
Cash received from customers
$
(b)
Accounts payable balances:
Beginning of year
$42,000
End of year
31,000
Merchandise inventory balances:
Beginning of year
50,000
End of year
52,500
Cost of goods sold
250,000
Cash paid for merchandise
inventory
$
(c)
Interest payable balances:
Beginning of year
$7,500
End of year
8,200
Interest expense
31,000
Cash paid for interest
$
(a)
Sales Revenue
12-149
190.
Use the following information about the calendar-year cash flows of Park Company to
prepare a statement of cash flows (direct method) and a schedule of noncash investing
and financing activities.
Cash and cash equivalents, beginning-
year balance
$18,000
Cash and cash equivalents, year-end
balance
78,750
Cash payments for merchandise
inventory
75,750
Cash paid for store equipment
15,750
Cash borrowed on three-month note
payable
22,500
Cash dividends paid
12,000
Cash paid for salaries
39,000
Cash payments for other operating
expenses
48,000
Building purchased and financed by
long-term note payable
78,000
Cash received from customers
220,500
Cash interest received
8,250
Cash flows from operating
12-152
191.
For each of the following independent cases, use the information provided to calculate the
missing cash inflow or cash outflow using the direct method.
(a.)
Interest payable, beginning-year
$4,200
Interest expense
26,700
Interest payable, year-end
3,000
Cash paid for interest
$
(b.)
Prepaid insurance, beginning-year
$7,000
Insurance expense
16,800
Prepaid insurance, year-end
3,400
Cash paid for insurance
$
(c.)
Interest receivable, beginning-year
$800
Interest revenue
12,600
Interest receivable, year-end
1,200
Cash received for interest
$
(d.)
Accounts payable, beginning-year
$60,000
Cost of goods sold
244,000
Merchandise inventory, beginning-
year
35,000
Merchandise inventory, year-end
40,500
Accounts payable, year-end
64,800
Cash paid for merchandise
$
(a.)
Interest expense
192.
Use the information provided below to calculate the cash paid for interest for the period.
Interest payable, beginning-year
$4,200
Interest expense
26,700
Interest payable, year-end
3,000
Cash paid for interest
$
193.
Use the information provided to calculate the cash paid for insurance for the period.
Prepaid insurance, beginning-year
$7,000
Insurance expense
16,800
Prepaid insurance, year-end
3,400
Cash paid for insurance
$
194.
Use the information provided to calculate the missing cash received for interest for the
period.
Interest receivable, beginning-year
$800
Interest revenue
12,600
Interest receivable, year-end
1,200
Cash received for interest
$
Interest revenue
Increase in interest receivable ($1,200 – $800)
Cash received for interest
195.
Use the information provided to calculate the missing cash paid for merchandise for the
period.
Accounts payable, beginning-year
$60,000
Cost of goods sold
244,000
Merchandise inventory, beginning-year
35,000
Merchandise inventory, year-end
40,500
Accounts payable, year-end
64,800
Cash paid for merchandise
$
Cost of goods sold
Merchandise purchases
Cash paid for merchandise
12-158
196.
Tate Company’s 2017 income statement and changes in selected balance sheet accounts
are given below. Calculate the company’s net cash provided or used by operating activities
using the direct method.
Tate Company
Income Statement
For Year Ended December 31, 2017
Sales
$248,000
Cost of goods sold
116,000
Gross profit
$132,000
Operating expenses:
Wages and salaries expense
$44,000
Rent expense
16,000
Depreciation expense
30,000
Amortization expense
12,000
Other expenses
18,000
120,000
Income from operations
$12,000
Gain on sale of equipment
26,000
Income before taxes
$38,000
Income tax expense
13,300
Net Income
$24,700
The company also experienced the following during 2017:
Increase in accounts receivable
$4,000
Increase in accounts payable (all
accounts payable transactions are for
inventory)
16,000
Increase in income taxes payable
300
Decrease in prepaid expenses
10,000
Decrease in merchandise inventory
14,000
12-159
Tate Company
Cash flows from operating activities
For Year Ended December 31, 2017
Cash flows from operations:
Cash received from customers
$244,000
(a)
Cash paid for merchandise
(86,000)
(b)
Cash paid for operating expenses
(68,000)
(c)
Cash paid for income taxes
(13,000)
(d)
Cash provided by operations
$77,000
197.
Tate Company’s 2017 income statement and changes in selected balance sheet accounts
are given below. Calculate the company’s net cash provided or used by operating activities
Increase in accounts receivable
Cash collected from customers
(b)
Cost of goods sold
Decrease in merchandise inventory
Increase in accounts payable
Cash paid for merchandise
(c)
Wages and salaries expense
Rent expense
Other operating expenses
Total operating expenses
Decrease in prepaid expenses
Cash paid for operating expenses
Income tax expense
Increase in income taxes payable
Cash paid for income taxes
12-160
using the indirect method.
Tate Company
Income Statement
For Year Ended December 31, 2017
Sales
$248,000
Cost of goods sold
116,000
Gross profit
$132,000
Operating expenses:
Wages and salaries expense
$44,000
Rent expense
16,000
Depreciation expense
30,000
Amortization expense
12,000
Other expenses
18,000
120,000
Income from operations
$12,000
Gain on sale of equipment
26,000
Income before taxes
$38,000
Income tax expense
13,300
Net Income
$24,700
The company also experienced the following during 2017:
Increase in accounts receivable
Increase in accounts payable
Increase in income taxes payable
Decrease in prepaid expenses
10,000
Decrease in merchandise inventory
14,000