Chapter 16: Statement of Cash Flows
147.
On the basis of the details of the common stock account presented below, calculate the total amount to be recorded
in financing section of the statement of cash flows. Assume any stock issues were at par.
Indicate whether the amount results in an increase or decrease in cash.
Common Stock, $10 Par
Balance
Date
Item
Debit
Credit
Debit
Jan. 1
Balance, 50,000 shares
—
—
—
Mar. 7
5,000 shares issued at
par for cash
—
—
$50,000
Sept. 20
2,500-share stock
dividend
—
—
25,000
Dec. 10
2,000 shares issued at
$20 for cash
—
—
40,000
Chapter 16: Statement of Cash Flows
148.
The net income reported on an income statement for the current year was $63,000. Depreciation recorded on fixed
assets for the year was $24,000. Balances of the current asset and current liability accounts at the end and
beginning of the year are listed below. Prepare the Cash Flows from Operating Activities section of the statement
of cash flows using the indirect method.
End
Beginning
Cash
$65,000
$ 70,000
Accounts receivable (net)
70,000
57,000
Inventories
86,000
102,000
Prepaid expenses
4,000
4,500
Accounts payable (merchandise creditors)
51,000
58,000
Cash dividends payable
4,500
6,500
Salaries payable
6,000
7,500
149.
The board of directors of Kendall Co. declared cash dividends totaling $390,000 during the current year. The
comparative balance sheet indicates dividends payable of $58,000 at the beginning of the year and $73,000 at
the
end of the year. What was the amount of cash payments Kendall Co. made to stockholders during the year?
Chapter 16: Statement of Cash Flows
150.
An analysis of the general ledger accounts indicates that equipment, with an original cost of $200,000 and
accumulated depreciation of $170,000 on the date of sale, was sold for $20,000 during the year. Using
this
information, indicate the items to be reported on the statement of cash flows using the indirect
method.
Chapter 16: Statement of Cash Flows
151.
On the basis of the following data for Larson Co. for the year ending December 31 Year 2, and the preceding year
ended December 31 Year 1, prepare a statement of cash flows. Use the indirect method of reporting cash flows
from operating activities. In addition to the balance sheet data, assume that:
Equipment costing $125,000 was purchased for cash.
Equipment costing $85,000 with accumulated depreciation of $65,000 was sold for $15,000.
The stock was issued for cash.
The only entries in the retained earnings account were net income of $51,000 and cash dividends declared of
$13,000.
Year 2
Year 1
Cash
$100,000
$ 78,000
Accounts receivable (net)
78,000
85,000
Inventories
101,500
90,000
Equipment
410,000
370,000
Accumulated depreciation
(150,000)
(158,000)
$539,500
$465,000
Accounts payable (merchandise creditors)
$ 58,500
$ 55,000
Cash dividends payable
5,000
4,000
Common stock, $10 par
200,000
170,000
Paid-in capital in excess of par—common stock
62,000
60,000
Retained earnings
214,000
176,000
$539,500
$465,000
Chapter 16: Statement of Cash Flows
Chapter 16: Statement of Cash Flows
152.
The comparative balance sheets of Posner Company, for Years 1 and 2 ended December 31, appear below in
condensed form:
Cash
Year 2
$ 53,000
Year 1
$ 50,000
Accounts receivable (net)
37,000
48,000
Inventories
108,500
100,000
Investments
—
70,000
Equipment
573,200
450,000
Accumulated depreciation—equipment
(142,000)
(176,000)
$629,700
$542,000
Accounts payable
$ 62,500
$ 43,800
Bonds payable, due Year 2
—
100,000
Common stock, $10 par
325,000
285,000
Paid-in capital in excess of par—common stock
80,000
55,000
Retained earnings
162,200
58,200
$629,700
$542,000
The income statement for the current year is as follows:
Sales
$625,700
Cost of merchandise sold
340,000
Gross profit
Operating expenses:
Depreciation expense
$ 26,000
$285,700
Other operating expenses
68,000
94,000
Income from operations
Other income:
Gain on sale of investment
$ 4,000
$191,700
Other expense:
Interest expense
6,000
(2,000)
Income before income tax
$189,700
Income tax
60,700
Net income
$129,000
Additional data for the current year are as follows:
(a)
Fully depreciated equipment costing $60,000 was scrapped, no salvage,
and
new equipment was purchased for $183,200.
(b)
Bonds payable for $100,000 were retired by payment at their face amount.
(c)
5,000 shares of common stock were issued at $13 for cash.
(d)
Cash dividends declared and paid, $25,000.
Prepare a statement of cash flow, using the indirect method of reporting cash flows from operating activities.
Chapter 16: Statement of Cash Flows
Chapter 16: Statement of Cash Flows
153.
The comparative balance sheet of Barry Company for Years 1 and 2 ended December 31 appears below in
condensed form:
Year 2
Year 1
Cash
$ 72,000
$ 42,500
Accounts receivable (net)
61,000
70,200
Inventories
121,000
105,000
Investments
—
100,000
Equipment
515,000
425,000
Accumulated depreciation—equipment
(153,000)
(175,000)
$616,000
$567,700
Accounts payable
$ 59,750
$ 47,250
Bonds payable
—
75,000
Common stock, $20 par
375,000
325,000
Premium on common stock
50,000
25,000
Retained earnings
131,250
95,450
$616,000
$567,700
Additional data for the current year are as follows:
(a)
Net income, $75,800.
(b)
Depreciation reported on income statement, $38,000.
(c)
Fully depreciated equipment costing $60,000 was scrapped, no salvage,
and
equipment was purchased for $150,000.
(d)
Bonds payable for $75,000 were retired by payment at their face amount.
(e)
2,500 shares of common stock were issued at $30 for cash.
(f)
Cash dividends declared and paid, $40,000.
(g)
Investments of $100,000 were sold for $125,000.
Prepare a statement of cash flows using the indirect method.
Chapter 16: Statement of Cash Flows
Chapter 16: Statement of Cash Flows
154.
The Dickinson Company reported net income of $155,000 for the current year. Depreciation recorded on
buildings
and equipment amounted to $65,000 for the year. In addition, a building with an original cost of
$250,000 and
accumulated depreciation of $190,000 on the date of the sale, was sold for $75,000. Balances of
the current asset
and current liability accounts at the beginning and end of the year are as follows:
End of Year
Beginning of Year
Cash
$20,000
$15,000
Accounts receivable
19,000
32,000
Inventories
50,000
65,000
Accounts payable
12,000
18,000
Prepare the cash flows from the operating activities section of the statement of cash flows using the indirect
method.
Chapter 16: Statement of Cash Flows
155.
The net income reported on the income statement for the current year was $58,000. Depreciation recorded on
fixed assets for the year was $24,000. In addition, equipment with an original cost of $130,000 and
accumulated
depreciation of $115,000 on the date of the sale, was sold for $20,000. Balances of the current
asset and current
liability accounts at the end and beginning of the year are listed below. Prepare the cash flows
from operating
activities section of a statement of cash flows using the indirect method.
End
Beginning
Cash
$65,000
$ 70,000
Accounts receivable (net)
70,000
63,000
Inventories
85,000
102,000
Prepaid expenses
4,000
4,500
Accounts payable (merchandise creditors)
50,000
58,000
Cash dividends payable
4,500
6,500
Salaries payable
6,000
7,500
Chapter 16: Statement of Cash Flows
156.
On the basis of the following data for Garrett Co. for Years 1 and 2 ended December 31, prepare a statement of
cash flows using the indirect method of reporting cash flows from operating activities. Assume that equipment
costing $125,000 was purchased for cash and equipment costing $85,000 with accumulated depreciation of
$65,000
was sold for $15,000; that the stock was issued for cash; and that the only entries in the retained earnings
account
were for net income of $56,000 and cash dividends declared of $18,000.
Year 2
Year 1
Cash
$ 90,000
$ 78,000
Accounts receivable (net)
78,000
85,000
Inventories
106,500
90,000
Equipment
410,000
370,000
Accumulated depreciation
(150,000)
(158,000)
$534,500
$465,000
Accounts payable (merchandise creditors)
$ 53,500
$ 55,000
Cash dividends payable
5,000
4,000
Common stock, $10 par
200,000
170,000
Paid-in capital in excess of par—common stock
62,000
60,000
Retained earnings
214,000
176,000
$534,500
$465,000
Chapter 16: Statement of Cash Flows
Chapter 16: Statement of Cash Flows
157.
On the basis of the following data for Branch Co. for the current and preceding years ended December 31, prepare
a statement of cash flows using the indirect method.
Assume that equipment costing $125,000 was purchased for cash and the land was sold for $15,000. The stock
was
issued for cash and the only entries in the retained earnings account were for net income of $56,000 and cash
dividends declared and paid of $18,000.
Cash
Current year
$ 65,000
Prior year
$ 54,000
Accounts receivable (net)
78,000
85,000
Inventories
106,500
90,000
Land
—
20,000
Equipment
495,000
370,000
Accumulated depreciation
(215,000)
(158,000)
$ 529,500
$461,000
Accounts payable (merchandise creditors)
$ 53,500
$ 55,000
Common stock, $10 par
200,000
170,000
Paid-in capital in excess of par—common stock
62,000
60,000
Retained earnings
214,000
176,000
$ 529,500
$461,000
Chapter 16: Statement of Cash Flows
Chapter 16: Statement of Cash Flows
158.
On the basis of the following data for Breach Co. for the current and preceding years ended December 31, prepare
a statement of cash flows using the indirect method.
Assume that equipment costing $25,000 was purchased for cash and no long term assets were sold during the
period.
Stock was issued for cash—3,200 shares at par.
Net income for the current year was $76,000.
Cash dividends declared and paid were $13,000.
Cash
Current year
$ 170,000
Prior year
$ 74,000
Accounts receivable (net)
78,000
85,000
Inventories
106,500
90,000
Equipment
395,000
370,000
Accumulated depreciation
(195,000)
(158,000)
$ 554,500
$ 461,000
Accounts payable (merchandise creditors)
$ 51,000
$ 50,000
Taxes payable
2,500
5,000
Common stock, $10 par
262,000
230,000
Retained earnings
239,000
176,000
$ 554,500
$ 461,000