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Chapter 11 - Statement of Cash Flows
PROBLEMS: SET A
Problem 11-1A (LO 11-1)
Type of
Activity
Cash Inflow
or Outflow
Transaction
O
CO
1. Payment of employee salaries
I
CI
2. Sale of land for cash
O
CO
3. Purchase of rent in advance
O
CI
4. Collection of an account receivable
F
CI
5. Issuance of common stock
O
CO
6. Purchase of inventory
I
CI
7. Collection of notes receivable
O
CO
8. Payment of income taxes
NC
NE
9. Sale of equipment for a note receivable
Chapter 11 - Statement of Cash Flows
Problem 11-2A (LO 11-2, 11-3)
ATM Software Developers
Statement of Cash Flows
For the Year Ended December 31, 2018
Adjustments to reconcile net income to net
cash flows from operating activities:
Depreciation expense
5,465
Increase in accounts receivable
(4,090)
Cash Flows from Investing Activities
Cash received from sale of land
8,650
Cash Flows from Financing Activities
Problem 11-3A (LO 11-2)
Alliance Technologies
Statement of Cash Flows
For the Year Ended December 31, 2018
Cash Flows from Operating Activities
Net income
$56,000
Adjustments to reconcile net income to net
cash flows from operating activities:
Depreciation expense
17,000
Problem 11-4A (LO 11-2, 11-3)
Video Phones, Inc.
Statement of Cash Flows
For the Year Ended December 31, 2018
Cash Flows from Operating Activities
Net income
$104,000
Adjustments to reconcile net income to net
cash flows from operating activities:
Depreciation expense
37,000
Loss (on sale of land)
9,000
Increase in accounts receivable
(22,000)
Net cash flows from operating activities
$140,800
Cash Flows from Financing Activities
Payment of cash dividends
(30,000)
Net cash flows from financing activities
(30,000)
Chapter 11 - Statement of Cash Flows
Problem 11-5A (LO 11-4)
1.
($ in millions)
Net Income
÷
Average
Total Assets
=
Return
on Assets
Cyberdyne
9,737
÷
(57,851 + 72,574)/2
=
14.9%
2.
($ in millions)
Operating
Cash Flows
÷
Average
Total Assets
=
Cash Return
on Assets
Chapter 11 - Statement of Cash Flows
*Problem 11-6A (LO 11-5)
Alliance Technologies
Statement of Cash Flows
For the Year Ended December 31, 2018
Cash Flows from Operating Activities
Cash received from customers
$412,000
Cash paid to suppliers
(258,000)
Net sales
$405,000
+ Decrease in accounts receivable
7,000
Operating expenses
$70,000
− Decrease in prepaid rent
(10,000)
− Increase in salaries payable
(6,000)
= Cash paid for operating expenses
$54,000
Chapter 11 - Statement of Cash Flows
*Problem 11-7A (LO 11-5)
Video Phones, Inc.
Statement of Cash Flows
For the Year Ended December 31, 2018
Cash Flows from Operating Activities
Cash received from customers
$3,614,000
Cash paid to suppliers
(2,426,000)
Cash Flows from Investing Activities
Purchase investment in bonds
(115,000)
Cash Flows from Financing Activities
Payment of cash dividends
(30,000)
Net cash flows from financing activities
(30,000)
Note: Noncash Activities
Chapter 11 - Statement of Cash Flows
Net sales
$3,636,000
Operating expenses
$958,000
+ Increase in prepaid rent
7,200
= Cash paid for operating expenses
$965,200
Chapter 11 - Statement of Cash Flows
*Problem 11-8A (LO 11-2, 1-5)
Reverse Logic
Income Statement
For the Year Ended December 31, 2018
Net sales
$4,108
Expenses:
Cost of goods sold
2,624
Net sales
$4,108
− Decrease in inventory
(50)
= Purchases
2,574
Chapter 11 - Statement of Cash Flows
PROBLEMS: SET B
Problem 11-1B (LO 11-1)
Type of
Activity
Cash Inflow
or Outflow
Transaction
F
CI
1. Issue common stock
I
CI
2. Sale of land for cash
F
CO
3. Purchase of treasury stock
O
CI
4. Collection of an account receivable
F
CI
5. Issuance of a note payable
O
CO
6. Purchase of inventory
F
CO
7. Repayment of note payable
O
CO
8. Payment of employee salaries
NC
NE
9. Sale of equipment for a note receivable
F
CI
10. Issuance of bonds
I
CO
11. Investment in bonds
O
CO
12. Payment of interest on bonds payable
F
CO
13. Payment of a cash dividend
I
CO
14. Purchase of a building
I
CI
15. Collection of a note receivable
Chapter 11 - Statement of Cash Flows
Problem 11-2B (LO 11-2, 11-3)
CPU Hardware Designers
Statement of Cash Flows
For the Year Ended December 31, 2018
Adjustments to reconcile net income to net
cash flows from operating activities:
Depreciation expense
30,000
Loss (on sale of land)
8,000
Cash Flows from Investing Activities
Cash received from sale of land
4,000
Cash Flows from Financing Activities
Issuance of common stock
300,000
Problem 11-3B (LO 11-2)
Software Associates
Statement of Cash Flows
For the Year Ended December 31, 2018
Cash Flows from Operating Activities
Adjustments to reconcile net income to net
cash flows from operating activities:
Depreciation expense
33,000
Chapter 11 - Statement of Cash Flows
Problem 11-4B (LO 11-2, 11-3)
Virtual Gaming Systems
Statement of Cash Flows
For the Year Ended December 31, 2018
Cash Flows from Operating Activities
Adjustments to reconcile net income to net
cash flows from operating activities:
Depreciation expense
33,000
Gain (on sale of land)
(7,000)
Cash Flows from Investing Activities
Purchase investment in stock
(95,000)
Cash Flows from Financing Activities
Issue common stock
60,000
Problem 11-5B (LO 11-4)
1.
($ in millions)
Net Income
÷
Average
Total Assets
=
Return
on Assets
2.
($ in millions)
Operating
Cash Flows
÷
Average
Total Assets
=
Cash Return
on Assets
InGen
12,639
÷
(124,503 + 129,517)/2
=
10.0%
3.
($ in millions)
Operating
Cash Flows
÷
Net Sales
=
Cash Flow
to Sales
($ in millions)
Net Sales
÷
Average
Total Assets
=
Asset
Turnover
