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177.
Use the following income statement and information about selected current assets and
current liabilities for Kimberline Industries to calculate the net cash provided or used by
operating activities using the indirect method.
KIMBERLINE INDUSTRIES
Income Statement
For Year Ended December 31, 2017
Sales
$280,000
Cost of goods sold
124,000
Gross profit from sales
$156,000
Operating expenses:
Salaries and wages expense
$35,000
Depreciation expense
11,000
Rent expense
27,200
Interest expense
3,900
77,100
Income from operations
$78,900
Loss on sale of land
4,700
Net income
$74,200
Increases and decreases of current asset and current liability accounts, all of which relate
to operating activities, are as follows:
Accounts receivable increase
Merchandise inventory decrease
Salaries and wages payable decrease
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178.
Based on the following income statement and balance sheet for Bankowski Corporation,
determine the cash flows from operating activities using the indirect method.
Bankowski Corporation
Income Statement
For Year Ended December 31, 2017
Sales
$504,000
Cost of goods sold
$327,600
Depreciation expense
33,000
Other operating expenses
125,500
(486,100)
Other gains (losses):
Gain on sale of equipment
5,200
Income before taxes
$23,100
Income tax expense
(4,800)
Net income
$18,300
Assets:
Cash
Accounts receivable
Inventory
Equipment
Accumulated depreciation
Total assets
Liabilities:
Accounts payable
Income taxes payable
Total liabilities
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179.
Based on Rowan, Inc.’s, income statement shown below and the other information
provided, calculate the net cash provided by operations using the indirect method.
Rowan, Inc.
Income Statement
12-125
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
Other operating expenses
18,000
108,000
Income from operations
$24,000
Gain on sale of equipment
26,000
Income before income taxes
$50,000
Income taxes expense
17,500
Net income
$32,500
Additional information:
Increase in accounts receivable
$4,000
Increase in accounts payable
16,000
Increase in income taxes payable
300
Decrease in prepaid expenses
10,000
Decrease in merchandise inventory
14,000
Decrease in long-term notes payable
20,000
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180.
The following information is available for the Aarons Corporation:
Aarons Corporation
Balance Sheets
At December 31
2017
2016
Assets:
Cash
$24,640
$23,040
Accounts receivable
32,180
29,400
Merchandise inventory
73,125
61,710
Long-term investments
55,900
56,400
Equipment
175,500
145,500
Accumulated depreciation
(33,550)
(31,200)
Total assets
$327,795
$284,850
Liabilities:
Accounts payable
$65,000
$40,380
Income taxes payable
10,725
10,200
Bonds payable
48,750
66,000
Total liabilities
$124,475
$116,580
Equity:
Common stock
117,000
96,000
Paid-in capital in excess of
par
13,000
9,000
Retained earnings
73,320
63,270
Total equity
$203,320
$168,270
Total liabilities and equity
$327,795
$284,850
Aarons Corporation
Income Statement
For Year Ended December 31, 2017
Sales
$240,000
Cost of goods sold
$80,900
Depreciation expense
29,400
Other operating expenses
48,000
Interest expense
2,000
(160,300)
Other gains (losses):
Loss on sale of equipment
(8,400)
Income before taxes
71,300
Income taxes expense
27,650
Net income
$43,650
Additional information:
(1) There was no gain or loss on the sales of the long-term investments, nor on the bonds
retired.
(2) Old equipment with an original cost of $37,550 was sold for $2,100 cash.
(3) New equipment was purchased for $67,550 cash.
(4) Cash dividends of $33,600 were paid.
(5) Additional shares of stock were issued for cash.
Prepare a complete statement of cash flows for calendar-year 2017 using the indirect
method.
Net income
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12-131
181.
The following information is available for the Brookstone Company:
Brookstone Company
Balance Sheets
At December 31
2017
2016
Assets:
Cash
$29,568
$27,648
Accounts receivable
38,616
35,280
Merchandise inventory
87,750
74,052
Long-term investments
67,080
67,680
Machinery
210,600
174,600
Accumulated depreciation
(40,260)
(37,440)
Total assets
$393,354
$341,820
Liabilities:
Accounts payable
$78,000
$48,456
Income taxes payable
12,870
12,240
Bonds payable
58,500
79,200
Total liabilities
$149,370
$139,896
Equity:
Common stock
140,400
115,200
Paid-in capital in excess of
par
15,600
10,800
Retained earnings
87,984
75,924
Total equity
$243,984
$201,924
Total liabilities and equity
$393,354
$341,820
Brookstone Company
Income Statement
For Year Ended December 31, 2017
Sales
$288,000
Cost of goods sold
$97,080
Depreciation expense
35,280
Other operating expenses
57,600
Interest expense
2,400
(192,360)
Other gains (losses):
Loss on sale of equipment
(10,080)
Income before taxes
85,560
Income taxes expense
33,180
Net income
$52,380
Additional information:
(1) There was no gain or loss on the sales of the long-term investments, nor on the bonds
retired.
(2) Old machinery with an original cost of $45,060 was sold for $2,520 cash.
(3) New machinery was purchased for $81,060 cash.
(4) Cash dividends of $40,320 were paid.
(5) Additional shares of stock were issued for cash.
Prepare a complete statement of cash flows for calendar-year 2013 using the indirect
method.
Net Income
182.
Use the following company information to calculate net cash provided or used by investing
activities:
(a) Equipment with a book value of $175,000 and an original cost of $300,000 was sold at
a loss of $17,000.
(b) Paid $62,000 cash for a new truck.
(c) Sold land costing $32,000 for $36,000 cash, realizing a $4,000 gain.
(d) Purchased treasury stock for $61,000 cash.
(e) Long-term investments in stock are sold for $41,000 cash, realizing a gain of $3,500.
183.
Use the following company information to calculate net cash provided or used by investing
activities:
(a) Equipment with a book value of $185,000 and an original cost of $300,000 was sold for
$167,000.
(b) Paid $52,000 cash for a new delivery van.
(c) Purchased land costing $37,500, paid in cash.
(d) Purchased treasury stock for $61,000 cash.
(e) Long-term investments in stock with a cost of $46,500 are sold for $42,000 cash.
184.
Use the following information to calculate the net cash provided or used by financing
activities for the Streams Corporation:
(a) Net income, $10,000
(b) Sold common stock for $40,000 cash
(c) Paid cash dividend of $13,000
(d) Paid bond payable, $28,000
(e) Purchased equipment for $12,000 cash
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185.
Based on the information provided below for Krackle Corp., complete the following
worksheet to be used to prepare the statement of cash flows using the indirect method.
(a) Net income for the year was $30,000.
(b) Dividends of $10,000 were declared and paid.
(c) Krackle’s only noncash expense was depreciation which totaled $50,000.
(d) The company purchased plant assets for $70,000.
(e) Notes payable in the amount of $40,000 were issued during the year for cash.
