Type
Solution Manual
Book Title
Financial Accounting Fundamentals 5th Edition
ISBN 13
978-0078025754

978-0078025754 Chapter 12 Solution Manual Part 2

March 26, 2020
Exercise 12-6 (10 minutes)
Cash flows from operating activities
Net income ...............................................................................
$400,000
Adjustments to reconcile net income to operating cash flow
Exercise 12-7 (10 minutes)
Cash flows from investing activities
Cash received from the sale of equipment* ..................................
Exercise 12-8 (10 minutes)
Cash flows from financing activities
Proceeds from issuance of common stock ...............................................
$ 64,000
Exercise 12-9 (20 minutes)
PEUGEOT S.A.
Statement of Cash Flows (Indirect Method)
For Year Ended December 31, 2011
Cash flows from operating activities
Net income ........................................................................
€ 784
Adjustments to reconcile net income to net cash
provided by operating activities
Income statement items not affecting cash
Depreciation and amortization .....................................
3,037
Gains on disposals and other ......................................
(883)
Changes in current operating assets and liabilities
Exercise 12-10 (15 minutes)
Exercise 12-11 (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
Depreciation expense ....................................................
58,600
Gain on sale of plant assets ..........................................
(2,000)
Changes in current operating assets and liabilities
Exercise 12-11 (Part 1 continued)
(1)
Cost of equipment sold (Given) ....................................................................
$ 48,600
Accumulated depreciation of equipment sold* ............................................
(40,600)
Book value of equipment sold ......................................................................
8,000
(3)
Retained Earnings
Part 2
Cash flow on total assets ratio = Operating cash flows / Average total assets
Exercise 12-12B (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 paid for inventory (Note 2) .......................
(393,300)
Exercise 12-12B (continued)
Notes
(1)
Sales ...............................................................................................................
$678,000
(2)
Cost of goods sold .........................................................................................
$411,000
Less decrease in inventory ...........................................................................
(22,700)
(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)
Book value of equipment sold ......................................................................
8,000
(7)
Retained Earnings
Exercise 12-13A (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 sheetdebit bal. accounts
Cash ..........................................................
$ 80,000
$ 60,000
Accounts receivable ..............................
120,000
(f)
$ 70,000
190,000
Statement of cash flows
Operating activities
Net income ...............................................
(a)
100,000
Investing activities
Payment for plant assets.......................
(d)
70,000
Financing activities
Paid cash dividends ...............................
(b)
80,000
Exercise 12-14B (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
Exercise 12-15B (15 minutes)
Case X:
Sales revenue ...........................................................
$515,000
Accounts receivable, Dec. 31, 2015 ........................
$ 27,200
Accounts receivable, Dec. 31, 2016 ........................
(33,600)
Exercise 12-16B (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)
Exercise 12-17B (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
Payments for inventory ..............................................
(254,500)
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 12-18B (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 paid for inventory ....................................................
(2,590,000)
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
PROBLEM SET A
Problem 12-1A (35 minutes)
LANSING COMPANY
Cash Flows from Operating ActivitiesIndirect Method
For Year Ended December 31, 2015
Cash flows from operating activities
Net income ...............................................................................
$ 6,000
Adjustments to reconcile net income to net cash
provided by operating activities
Income statement items not affecting cash
Problem 12-2AB (35 minutes)
LANSING COMPANY
Cash Flows from Operating ActivitiesDirect Method
For Year Ended December 31, 2015
Cash flows from operating activities
Cash receipts from customers (1) .........................................................
$ 97,400
Cash payments to suppliers (2) .............................................................
(42,640)
)
Supporting calculations
(1) Sales + Decrease in receivables = $97,200 + ($5,800 - $5,600) = $97,400
(2) Cost of Increase in Decrease in
goods sold inventory accts payable =
$42,000 + ($1,980 - $1,540) + ($4,600 - $4,400) = $42,640
+
+
Problem 12-3A (50 minutes)
Part 1
FORTEN COMPANY
Statement of Cash Flows
For Year Ended December 31, 2015
Cash flows from operating activities
Net income ..........................................................................................
$114,975
Adjustments to reconcile net income to net
cash provided by operating activities:
Problem 12-3A (Concluded)
Part 2
Forten Company's operations provide a positive net cash inflow of $40,900a
good result. At the same time, the cash balance decreased by $23,700 (32%)
during the year. Two major cash outflows are the retirement of debt ($50,125)

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