113.
During 2017, 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.
Required:
A. Calculate the net cash flow from financing activities during 2017. 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, 2016, 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.
Required:
A. Prepare the financing activities section of the Kennel Company cash flow statement for the
year ended December 31, 2016.
B. Is the net cash flow for investing 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, 2017: Battles 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.
Required:
Should this transaction be shown on the statement of cash flows? Why or why not?
116.
Complete the following statement of cash flows using the indirect method:
Dakota Company
Statement of Cash Flows
For the Year Ended December 31, 2017
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 2017
__________
Beginning cash balance, $20,000
__________
Ending cash balance
_________
Cash flows from operating activities:
117.
Brice Corporation reported the following information:
2016 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:
Accounts receivable
$800,000
$600,000
520,000
480,000
Cash collected from customers = $7,900,000.
= Sales revenue
118.
Brice Corporation reported the following information:
2016 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:
Accounts receivable
$800,000
$600,000
520,000
480,000
Cash paid to suppliers = $6,410,000.
= Cost of goods sold
$6,400,000
+ Increase in inventory
$40,000
($30,000)
119.
Brice Corporation reported the following information:
2016 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:
Accounts receivable
$800,000
$600,000
520,000
480,000
Operating expenses = $1,050,000.
= Operating expenses
+ Decrease in accrued liabilities
120.
Brice Corporation reported the following information:
2016 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
Accounts receivable
Prepaid expenses
Accounts payable
Accrued liabilities
Income taxes payable
Unearned sales revenue
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, 2017.
Cash and cash equivalent balances:
12–31-2016
$26,000
12–31-2017
18,000
Cash paid for purchase of treasury stock
50,000
Accepted note receivable in exchange for a computer that had
been used in business operations
10,000
Depreciation expense
15,000
Cash received from customers
200,000
Cash paid for operating expenses
75,000
Cash paid for merchandise
130,000
Cash received from dividends
2,000
Cash paid for dividends
5,000
Cash paid for office building
75,000
Cash borrowed on a 6-month note payable
40,000
Cash received from issuance of bonds payable
90,000
Cash paid for bond interest expense
5,000
Cash Flows from Operating
Cash received from customers
Cash received from dividends
Cash paid for merchandise
(130,000)
Cash paid for operating
