113) During 2019, Tommy’s Toys reported the following: short-term borrowings of $419
million; long-term borrowings of $147 million; long-term debt repayments of $45 million;
interest paid, $128 million; treasury shares purchased $632 million; and exercise of stock options
by employees, $2 million.
A. Calculate the net cash flow from financing activities during 2019. Show your work and details
of whether an item is added or subtracted to arrive at your answer.
B. Is the net cash flow provided by, or used in, the financing activities? Briefly describe the
reason for your answer.
114) For the year ended December 31, 2019, Kennel
Company reported short-term borrowings of $2,500,000, long-term borrowings of $6,800,000,
repayments of long-term borrowings of $3,500,000, interest payments of $780,000, purchase of
treasury shares of $500,000, cash dividends declared of $1,100,000, and cash dividend payments
of $800,000. Kennel also issued its common stock in exchange for a building costing $400,000.
A. Prepare the financing activities section of the Kennel
Company cash flow statement for the year ended December 31, 2019.
B. Is the net cash flow for financing activities a net cash inflow, or a net cash outflow? Briefly
describe the reason for your answer.
115) While preparing a statement of cash flows, you encountered the following transaction:
February 1, 2019: Battle Corporation acquired a small
office building in exchange for 50,000 shares of its own common stock; par value $10 per share;
market value $15 per share.
Should this transaction be shown on the statement of cash flows? Why or why not?
75
116) Complete the following statement of cash flows using the indirect method:
Dakota Company
Statement of Cash Flows
For the Year Ended December 31, 2019
Cash flows from operating activities:
Net income, $20,000
_________
Add or (subtract) items not affecting cash:
Depreciation expense, $3,000
__________
Accounts receivable decrease, $2,000
__________
Accounts payable decrease, $4,000
__________
Net cash flow from operating activities
_________
Cash flow from investing activities:
Cash received from sale of equipment, $6,000
__________
Cash paid for new equipment, $10,000
__________
Cash received from sale of investments, $5,000
__________
Net cash flow from investing activities
__________
Cash flows from financing activities:
Cash paid for treasury stock, $6,000
__________
Cash paid for dividends, $3,000
__________
Cash paid on long-term debt principal, $5,000
__________
Net cash flow from financing activities
__________
Net increase in cash during 2019
__________
Beginning cash balance, $20,000
__________
Ending cash balance
_________
117) Brice Corporation reported the following information:
2019 Income Statement:
Sales Revenue
$8,200,000
Cost of goods sold
6,400,000
Gross profit
1,800,000
Operating expenses (includes $200,000
depreciation expense)
1,250,000
Pretax income
550,000
Income tax expense (30% rate)
165,000
Net Income
$385,000
Balance Sheet:
2019
2018
Accounts receivable
$800,000
$600,000
Inventory
520,000
480,000
Prepaid expenses
110,000
120,000
Accounts payable
340,000
310,000
Accrued liabilities
80,000
90,000
Income taxes payable
25,000
40,000
Unearned revenue
100,000
200,000
Compute Brice’s cash paid to suppliers for inventory for 2019.
Cash collected from customers= $7,900,000.
=Sales revenue
receivable
revenue
118) Brice Corporation reported the following information:
2019 Income Statement:
Sales Revenue
$8,200,000
Cost of goods sold
6,400,000
Gross profit
1,800,000
Operating expenses (includes $200,000
depreciation expense)
1,250,000
Pretax income
550,000
Income tax expense (30% rate)
165,000
Net Income
$385,000
Balance Sheet:
2019
2018
Accounts receivable
$800,000
$600,000
Inventory
520,000
480,000
Prepaid expenses
110,000
120,000
Accounts payable
340,000
310,000
Accrued liabilities
80,000
90,000
Income taxes payable
25,000
40,000
Unearned sales revenue
100,000
200,000
Compute Brice’s cash paid for operating expenses for 2019.
Cash paid to suppliers = $6,410,000.
= Cost of goods sold
+ Increase in inventory
$40,000
payable
($30,000)
119) Brice Corporation reported the following information:
2019 Income Statement:
Sales Revenue
$8,200,000
Cost of goods sold
6,400,000
Gross profit
1,800,000
Operating expenses (includes $200,000
depreciation expense)
1,250,000
Pretax income
550,000
Income tax expense (30% rate)
165,000
Net Income
$385,000
Balance Sheet:
2019
2018
Accounts receivable
$800,000
$600,000
Inventory
520,000
480,000
Prepaid expenses
110,000
120,000
Accounts payable
340,000
310,000
Accrued liabilities
80,000
90,000
Income taxes payable
25,000
40,000
Unearned sales revenue
100,000
200,000
Compute Brice’s cash paid for operating expenses in 2019.
Operating expenses = $1,050,000.
= Operating expenses
$1,250,000
($200,000)
($10,000)
+ Decrease in accrued liabilities
$10,000
120) Brice Corporation reported the following information:
2019 Income Statement:
Sales Revenue
$8,200,000
Cost of goods sold
6,400,000
Gross profit
1,800,000
Operating expenses (includes $200,000
depreciation expense)
1,250,000
Pretax income
550,000
Income tax expense (30% rate)
165,000
Net Income
$385,000
Balance Sheet:
2019
2018
Accounts receivable
$800,000
$600,000
Inventory
520,000
480,000
Prepaid expenses
110,000
120,000
Accounts payable
340,000
310,000
Accrued liabilities
80,000
90,000
Income taxes payable
25,000
40,000
Unearned sales revenue
100,000
200,000
Compute Brice’s cash paid for income taxes in 2019.
Cash paid for income taxes = $180,000
= Income tax expense
+ Decrease in income taxes payable
121) Use the following information to prepare a statement of cash flows (direct method) for
Ames Corporation for the year ended December 31, 2019.
2019 Income Statement:
Sales Revenue
$8,200,000
Cost of goods sold
6,400,000
Gross profit
1,800,000
Operating expenses (includes
$200,000 depreciation expense)
1,250,000
Pretax income
550,000
Income tax expense (30% rate)
165,000
Net Income
$385,000
Balance Sheet:
2019
2018
Accounts receivable
$800,000
$600,000
Inventory
520,000
480,000
Prepaid expenses
110,000
120,000
Accounts payable
340,000
310,000
Accrued liabilities
80,000
90,000
Income taxes payable
25,000
40,000
Unearned sales revenue
100,000
200,000
Cash paid for income taxes = $180,000
= Income tax expense
+ Decrease in income taxes payable
$15,000