25 Minutes, Medium
a.
Cash flows from o
p
eratin
g
activities:
Net income 928,000$
Add: De
p
reciation ex
p
ense 49,000$
Increase in accounts
p
a
y
able to su
pp
liers 5,000
PROBLEM 13.5B
ROYCE INTERIORS, INC.
For the Year Ended December 31, 2015
Partial Statement of Cash Flows
ROYCE INTERIORS, INC.
(INDIRECT)
45 Minutes, Strong
a.
Cash flows from o
p
eratin
g
activities:
Cash received from customers
(
1
)
3,340,000$
Interest received
(
2
)
6
5,
000
Cash disbursed for o
p
eratin
g
activities
(2
,
482
,
000)
Net cash flow from o
p
eratin
g
activities 923,000$
000
(1
000
4
$
PROBLEM 13.6B
FOXBORO TECHNOLOGIES
For the Year Ended December 31, 2015
Statement of Cash Flows
FOXBORO TECHNOLOGIES
(
)
(
3
)
Cash
p
aid to su
pp
liers and em
p
lo
y
ees:
Cash paid for purchases of merchandise:
PROBLEM 13.6B
FOXBORO TECHNOLOGIES
(continued)
p
p
b.
c.
PROBLEM 13.6B
FOXBORO TECHNOLOGIES (concluded)
Cash paid to suppliers, presented in the operating activities section of the statement of cash
flows, totaled $2,334,000. Cost of goods sold, presented in the income statement, was only
$1,500,000. The primary reasons for the difference are as follows:
On the contrary, the fact that cash flows from investing and financing activities are negative
–Increase in prepaid operating expenses
–Decrease in accrued liabilities for operating expenses
–Depreciation expenses (which did not require cash payment)
–Decrease in inventory
were required as a result of the following:
40 Minutes, Strong
a.
Cash flows from o
p
eratin
g
activities:
Net income 562,000$
Decrease in accrued ex
p
enses
p
a
y
able
1
7,
000
882
,
000
Net cash
p
rovided b
y
(
used in
)
o
p
eratin
g
activities (158,000)$
Cash flows from investin
g
activities:
Cash
p
aid to ac
q
uire
p
lants assets
(
see schedule
)
(2,000,000)$
66
000
Net cash
p
rovided b
y
financin
g
activities
2
,
1
55,
000
Net increase
(
decrease
)
in cash (3,000)$
Cash and cash e
q
uivalents, Januar
y
1, 2015
4
5,
000
q
42
000
$
000
p
q
p
2
000
$
PROBLEM 13.7B
LGIN
For the Year Ended December 31, 2015
Statement of Cash Flows
LGIN
3
000
b.
PROBLEM 13.7B
LGIN (concluded)
LGIN’s credit sales resulted in $865,000 in new receivables, which were uncollected as of
year-end. These credit sales all were included in the computation of net income, but those
that remained uncollected at year-end do not represent cash receipts. Therefore, the cash
60 Minutes, Strong
a.
Balance sheet effects:
Beginning Ending
Balance Balance
Cash and cash e
q
uivalents 22,000 (x) 38,000 60,000
459,000 476,000
Liabilities & Owners’ E
q
uit
y
50,000 (6) 20,000 70,000
16,000 (7) 2,000 14,000
(2) 4,000
459,000 116,000 116,000 476,000
Cash effects:
(10) 10,000
(11) 35,000
Net increase in cash (x) 38,000
Totals 104,000 104,000
Sale of capital stock
Payment of notes payable
Accounts payabl
e
Sources Uses
Totals
Accrued expenses payabl
e
PURCELLS, INC.
PROBLEM 13.8B
Changes Changes
PURCELLS, INC.
Worksheet for a Statement of Cash Flows
Assets
For the Year Ended December 31, 2015
Debit Credit
PROBLEM 13.8B
PURCELLS, INC.
(continued)
b
.
2
p
y
Cash flows from investin
g
activities:
Proceeds from sales of marketable securities 11,000$
Cash
p
aid to ac
q
uire
p
lants assets
(
see su
pp
lementar
y
schedule
)
(8
,
000)
Net cash
p
rovided b
y
investin
g
activities 3,000
Cash flows from financin
g
activities:
3
p
y
y
$
p
q
p
8
$
PURCELLS, INC.
For the Year Ended December 31, 2015
Statement of Cash Flows
4
c.
d.
PROBLEM 13.8B
PURCELLS, INC. (continued)
Purcells, Inc. achieved its positive cash flow from operating activities basically by
near future.
Purcells, Inc. has substantially more cash than it did a year ago. Nonetheless, the
company’s financial position appears to be deteriorating. Its marketable securities—a
•
PROBLEM 13.8B
PURCELLS, INC. (concluded)
If management decides to continue business operations, it should take the following actions:
Expand the company’s product lines! The Pulsas alone can no longer support profitable
operations. Also, dependency upon a single product—especially a faddish product with a
limited market potential—is not a sound long-term strategy.