15–27 Solutions
Solutions 15–28
15.10 a. continued.
Marketable Accounts
Securities Receivable—Net Inventories
√ 129,200 √ 371,200 √ 124,100
√ 122,600 √ 312,200 √ 255,200
Prepayments Bond Sinking Fund Investment in Subsidiary
Plant and Notes
Equipment—Net Accounts Payable Payable—Current
√ 1,534,600 213,300 √ 145,000 √
(6) 65,000 100,000 (6) 24,800 (16) (17) 145,000
(8) 28,000 4,000 (7)
79,900 (15)
√ 1,443,700 238,100 √ -0- √
6-Percent
Mortgage Bonds 8-Percent Debentures Common Stock
310,000 √ -0- √ 950,000 √
Unrealized Holding
Additional Gain on Marketable
Paid-in Capital Securities Retained Earnings
15–29 Solutions
Treasury Stock
√ 43,500
9,000 (3)
√ 34,500
Solutions 15–30
15.10 continued.
b. PLAINVIEW CORPORATION
Statement of Cash Flows
For the Year Ended December, 2009
Operations:
Net Income ………………………………………………. $ 236,580
Depreciation …………………………………………….. 79,900
Gain on Sale of Marketable Securities …………. (17,000)
Deferred Income Taxes ……………………………… (500)
Increase in Income Taxes Payable ……………… 66,500
Increase in Inventories ………………………………. (131,100)
Investing:
Marketable Securities Sold ………………………… $ 127,000
Building Sold ……………………………………………. 4,000
Bond Sinking Funds Used ………………………….. 63,000
Financing:
Re-issue of Treasury Stock ………………………… $ 6,000
Issue of Debentures ………………………………….. 125,000
15–31 Solutions
15.11 (Airlines Corporation; preparing and interpreting the statement of cash flows.)
(Based on financial statements of UAL.)
a. T-account work sheet for 2008.
Cash
√ 1,087
Operations
(1) 324 106 (4)
Investing
(4) 1,199 1,568 (2)
(10) 40 957 (6)
Financing
Marketable Securities Accounts Receivable Inventories
√ — √ 741 √ 210
(5) 85 (7) 147 (8) 39
(6) 957
Solutions 15–32
Short-Term
Other Assets Accounts Payable Borrowing
√ 610 540 √ 121 √
15–33 Solutions
15.11 a. continued.
Current Portion Advances from Other Current
Long-Term Debt Customers Liabilities
110 √ 619 √ 1,485 √
Deferred Tax Other Noncurrent
Long-Term Debt Liability Liabilities
1,418 √ 352 √ 715 √
Unrealized Holding
Gain on Marketable
Additional Paid-in
Capital Treasury Stock
48 √ √ 14
(19) 98
48 √ √ 112
Solutions 15–34
15.11 a. continued.
a. T-account work sheet for 2009.
Cash
√ 465
Operations
(1) 101 286 (4)
Investing
(4) 1,697 2,821 (2)
Financing
(12) 1 84 (13)
(17) 230
Marketable Securities Accounts Receivable Inventories
√ 1,042 √ 888 √ 249
Property, Plant and Accumulated
Prepayments Equipment Depreciation
√ 179 √ 7,704 3,805 √
15–35 Solutions
Solutions 15–36
15.11 a. continued.
Short-Term
Other Assets Accounts Payable Borrowing
√ 570 596 √ 446 √
Current Portion Advances from Other Current
Long-Term Debt Customers Liabilities
84 √ 661 √ 1,436 √
89 √ 843 √ 1,826 √
Deferred Tax Other Noncurrent
Long-Term Debt Liability Liabilities
Unrealized Holding
Additional Paid-in Gain on Marketable
Common Stock Capital Securities
Retained Earnings Treasury Stock
15–37 Solutions
15.11 continued.
b. Comparative Statement of Cash Flows for Airlines Corporation
(Amounts in Millions)
2009 2008
Operations:
Net Income ………………………………………………. $ 101 $ 324
Increase (Decrease) in Accounts Payable ……. (44) 56
Increase (Decrease) in Advances from
Customers ……………………………………………. 182 42
Increase (Decrease) in Other Current Lia-
bilities ………………………………………………….. 390 (49)
Cash Flow from Operations……………………………. $ 778 $ 543
Investing:
Sale of Property, Plant and Equipment ……….. $ 1,697 $ 1,199
Acquisition of Property, Plant and Equip-
Solutions 15–38
15–39 Solutions
15.11 continued.
c. During 2008, cash flow from operations exceeded net income primarily
because of the noncash expense for depreciation. Cash flows from
operations and from the sale of property, plant and equipment were
sufficient to finance capital expenditures. Airlines Corporation used the
excess cash flow as well as cash from additional short-term borrowing to
repay long-term debt and reacquire treasury stock. It invested the
Solutions 15–40
15.12 (Irish Paper Company; preparing and interpreting the statement of cash flows.)
a. T-account work sheet for 2007.
Cash
√ 374
Operations
(1) 376 221 (7)
Investing
(7) 5 92 (3)
Financing
15–41 Solutions
15.12 a. continued.
Accounts Receivable_ Inventories Prepayments
√ 611 √ 522 √ 108
(10) 112 (11) 59 54 (12)
√ 723 √ 581 √ 54
Investments in Property, Plant and Accumulated
Current Portion
Other Assets Accounts Payable Long-Term Debt
√ 175 920 √ 129 √
(7) 220 8 (13) 72 (14) (16) 129 221 (15)
√ 387 992 √ 221 √
Solutions 15–42
15.12 a. continued.
a. T-account work sheet for 2008.
Cash
√ 49
Operations
Investing
(3) 86 931 (4)
(8) 21 78 (13)
Financing
1OK to classify this as (Dis-)Investing source of cash.
Accounts Receivable Inventories Prepayments
15–43 Solutions
5 (10p) (6) 221
√ 322 √ 7,079 2,698 √
Current Portion
Other Assets Accounts Payable Long-Term Debt