Exercise 16-11 (40 minutes)
Part 1
IKIBAN, INC.
Statement of Cash Flows (Indirect Method)
For Year Ended June 30, 2015
Cash flows from operating activities
Net income……………………………………………………………..$ 99,510
Adjustments to reconcile net income to net cash
provided by operating activities
Income statement items not affecting cash
(Notes 1, 2, and 3 on next page.)
Exercise 16-11 (Part 1 continued)
(1) Cost of equipment sold (Given)…………………………………………………………….. $ 48,600
Accumulated depreciation of equipment sold*………………………………………. (40 ,600)
Equipment Accumulated Depreciation, Equipment
Bal.,
115,000 Bal., 6/30/2014 9,000
(3)
Retained Earnings
Part 2
Cash flow on total assets ratio = Operating cash flows / Average total assets
Interpretation: A 49.6% result on the cash flow on total assets ratio is
Exercise 16-12B (40 minutes)
Part 1
IKIBAN, INC.
Statement of Cash Flows (Direct Method)
For Year Ended June 30, 2015
Cash flows from operating activities
Cash received from customers (Note 1)……….. $664,000
Cash flows from investing activities
Cash received from sale of equip. (Note 5)…… 10,000
Cash paid for equipment (Note 5—given)…….. (57,600)
(See notes on next page)
Exercise 16-12B (continued)
Notes
(1) Sales…………………………………………………………………………………………………….. $678,000
(2) Cost of goods sold……………………………………………………………………………….. $411,000
(3) Other operating expenses…………………………………………………………………….. $ 67,000
(4) Income taxes expense…………………………………………………………………………… $ 43,890
(5) Cost of equipment sold (Given)…………………………………………………………….. $ 48,600
Accumulated depreciation of equipment sold*………………………………………. (40 ,600)
Cost of equipment sold…………………………………………………………………………. $ 48,600
Equipment Accumulated Depreciation, Equipment
Bal.,
115,000 Bal., 6/30/2014 9,000
(7)
Retained Earnings
Bal., 6/30/2014 24,100
Exercise 16-13A (30 minutes)
SCORETECK CORPORATION
Spreadsheet for Statement of Cash Flows
For Year Ended December 31, 2015
December
31, 2014
Analysis of Changes December
31, 2015
Debit Credit
Balance sheet—debit bal. accounts
Cash…………………………………………. $ 80,000 $ 60,000
$1,050,000
$1,150,000
Balance sheet—credit bal. accounts
Accum. depreciation—Plant assets. . . $ 100,000 (c) 70,000 $ 170,000
Statement of cash flows
Operating activities
Net income…………………………………. (a) 100,000
Investing activities
Payment for plant assets………………. (d) 70,000
Exercise 16-14B (15 minutes)
Statement of Cash Flows Noncash
Operating
Activities
Investing
Activities
Financing
Activities
Investing &
Financing
Activities
Not Reported
on Statement
or in Notes
a. Retired long-term notes
payable by issuing stock
X
b. Paid cash toward accounts
payable
X
Exercise 16-15B (15 minutes)
Case X: Sales revenue…………………………………………………. $515,000
Accounts receivable, Dec. 31, 2015…………………..$ 27,200
Case Y: Rent expense…………………………………………………. $139,800
Rent payable, Dec. 31, 2015……………………………..$ 7,800
Case Z: Cost of goods sold…………………………………………. $525,000
Inventory, Dec. 31, 2016……………………………………$130,400
Exercise 16-16B (20 minutes)
Cash flows from operating activities
Receipts from customers (see note a)…………………………………….$1,797,500
Payments for inventory (see note b)……………………………………….(1,028,500)
Note a: Sales – Increase in receivables
Note b: Cost of goods sold + Increase in inventory + Decrease in accounts payable
Note c: Salaries expense + Decrease in salaries payable
Exercise 16-17B (20 minutes)
FERRON COMPANY
Statement of Cash Flows
For Year Ended December 31, 2015
Cash flows from operating activities
Receipts from customers…………………………………… $ 495,000
Receipts of interest…………………………………………… 3,500
Cash flows from investing activities
Receipt from sale of equipment………………………….. 60,250
Note No. ___
Noncash investing and financing activities
(1) Issued common stock to retire $185,500 of bonds payable.
(2) Purchased land financed with a $105,250 long-term note payable.
Exercise 16-18B (40 minutes)
1.
THOMAS CORPORATION
Statement of Cash Flows
For Year Ended December 31, 2015
Cash flows from operating activities
Cash received from customers………………………………….$5,000,000
Cash received from dividends…………………………………… 208,400
Cash flows from investing activities
Cash paid for purchases of machinery………………………(2,236,000)
Cash flows from financing activities
Cash received from issuing stock…………………………….. 1,540,000
2.
a. (i) Financing section reported the largest cash inflow of $4,036,000.
(ii) Investing section reported the largest cash outflow of $2,566,000.
b. The largest individual item among the investing cash outflows is the
purchase of machinery at $2,236,000.