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25 Minutes, Easy
a.
Cash
p
aid to ac
q
uire
p
lant assets
(
see
p
art b
)
(60,000)
Proceeds from sales of
p
lant assets
(
2
)
12
,
000
Net cash used for investin
g
activities
(39
,
000)
$
Proceeds from sales of marketable securities
132
,
000
$
(
2
)
Proceeds from sales of
p
lant assets:
Cost of
p
lant assets sold or retired 120,000$
Proceeds from sales of
p
lant assets
12
,
000
$
b.
Schedule of noncash investin
g
and financin
g
activities:
Purchases of
p
lant assets 196,000$
financing activities. Ideally, cash to support investing activities should come from normal
operations. If this places undue strain on the company’s operations, however, financing via
borrowing and/or sale of capital stock are alternatives the company should consider.
PROBLEM 13.2
A
HAMPTON, INC.
For the Year Ended December 31, 2015
Partial Statement of Cash Flows
HAMPTON, INC.
25 Minutes, Easy
a.
Proceeds from sales of marketable securities
(
1
)
46,000
Loans made to borrowers (55,000)
Collections on loans 62,000
Cash
p
aid to ac
q
uire
p
lant assets
(
see
p
art b
)
(60,000)
PROBLEM 13.3
A
For the Year Ended December 31, 2015
HOLMES EXPORT CO.
30 Minutes, Medium
a.
Cash flows from o
p
eratin
g
activities:
Cash received from customers
(
1
)
2,920,000$
Interest and dividends received
(
2
)
1
7
1
,
000
Cash disbursed for o
p
eratin
g
activities
(2
,755,
000)
Net cash flow from o
p
eratin
g
activities 336,000$
(
1
)
Cash received from customers:
Net sales 2,850,000$
PROBLEM 13.4
A
TREECE, INC.
For the Year Ended December 31, 2015
Partial Statement of Cash Flows
TREECE, INC.
PROBLEM 13.4
A
TREECE, INC. (concluded)
b. In addition to more aggressive collection of accounts receivable, management could increase
cash flows from operations by (only two required):
25 Minutes, Medium
Cash flows from o
p
eratin
g
activities:
Net income 223,000$
Add: De
p
reciation ex
p
ense 115,000$
Decrease in accounts receivable 70,000
Credit sales cause receivables to increase, while collections cause them to decline. If receivables
decline over the year, collections during the year must have exceeded credit sales for the year.
Thus, cash receipts exceed revenue measured on the accrual basis.
PROBLEM 13.5
A
TREECE, INC.
For the Year Ended December 31, 2015
Partial Statement of Cash Flows
TREECE, INC. (INDIRECT)
45 Minutes, Strong
a.
Cash flows from o
p
eratin
g
activities:
Cash received from customers
(
1
)
3,140,000$
Interest received
(
2
)
42
,
000
PROBLEM 13.6
A
21st CENTURY TECHNOLOGIES
For the Year Ended December 31, 2015
Statement of Cash Flows
21st CENTURY TECHNOLOGIES
(
3
)
Cash
p
aid to su
pp
liers and em
p
lo
y
ees:
Cost of
g
oods sold 1,620,000$
Less: Decrease in inventor
y
60
,
000
O
p
eratin
g
ex
p
enses 1,240,000$
Less: De
p
reciation
(
a noncash ex
p
ense
)
1
5
0
,
000
Subtotal 1,090,000
Add: Increase in
p
re
p
a
y
ments 6,000
(
$1,576,000 + $1,104,000
)
2
,
680
,
000
$
(
4
)
Interest
p
aid:
Interest ex
p
ense 42,000$
Add: Decrease in income taxes
p
a
y
abl
e
14
,
000
Income taxes
p
aid
114
,
000
$
(
6
)
Proceeds from sales of marketable securities:
(
7
)
Proceeds from sales of
p
lant assets:
Book value of
p
lant assets sold
(p
ara
g
ra
p
h
8
)
36,000$
Less: Loss re
p
orted on sales of
p
lant assets
12
,
000
Ca
p
ital account
160
,
000
Proceeds from issuin
g
ca
p
ital stock
180
,
000
$
Cash paid for purchases of merchandise:
PROBLEM 13.6
A
21st CENTURY TECHNOLOGIES
(continued)a.
b. (1)
PROBLEM 13.6
A
21st CENTURY TECHNOLOGIES (concluded)
The primary reason why cash provided by operating activities substantially exceeded
net income was the company’s $150,000 in depreciation expense. Depreciation reduces
net income, but does not affect the cash flows from operating activities.
60 Minutes, Strong
a.
Balance sheet effects:
Beginning Ending
B
a
l
ance
B
a
l
ance
Cash and cash e
q
uivalents 80,000 (x) 43,000 37,000
PROBLEM 13.7
A
Changes
Credit
Changes
Effect of Transactions
SATELLITE WORLD
SATELLITE WORLD
Worksheet for a Statement of Cash Flows
For the Year Ended December 31, 2015
Assets
Debit
b
.
Cash flows from o
p
eratin
g
activities:
Less: Increase in accounts receivable 750,000$
Decrease in accrued ex
p
enses
p
a
y
able
13
,
000
7
63
,
000
Net cash
p
rovided b
y
(
used in
)
o
p
eratin
g
activities (143,000)$
Cash flows from investin
g
activities:
Net cash
p
rovided b
y
financin
g
activities
1
,
9
5
0
,
000
Net increase
(
decrease
)
in cash (43,000)$
PROBLEM 13.7
A
SATELLITE WORLD
For the Year Ended December 31, 2015
Statement of Cash Flows
SATELLITE WORLD (continued)
