Name:
Solution
Date:
Instructor:
Course:
+
+
$38,500
$20,000
(4)
Cash payments for income taxes
(b) (1) Compute the current cash debt coverage ratio.
$23,000
$26,000
(b) (2) Compute the cash debt coverage ratio.
$56,000
$43,000
(b) (3) Compute the free cash flow.
KimFin_7e_SET_Ch12.xlsx, Page 16 of 30 Page(s), 4/15/202211:59 AM
$65,000
Accounts payable
27,000
Income taxes payable
23,000
18,000
Income tax expense
$204,000
Mosley’s balance sheet contained these comparative data at December 31.
Net income
80,000
2014
2013
Accounts receivable
$72,000
Financial Accounting, Seventh Edition by Kimmel, Weygandt, and Kieso
Primer on Using Excel in Accounting by Rex A Schildhouse
P12-5B, Prepare the operating activities section—indirect method.
The income statement of Mosley Inc. reported the following condensed information.
MOSLEY INC.
Depreciation expense
Operating expenses, excluding depreciation
56,000
4,000
Income from operations
Loss on disposal of plant assets
566,000
284,000
Name:
Date:
Instructor:
Course:
Income Statement
For the Year Ended December 31, 2014
Service revenue
$850,000
$506,000
35,000
Title
Amount
Accounts payable pertain to operating expenses.
Instructions:
Prepare the operating activities section of the statement of cash flows using the indirect method.
MOSLEY INC.
Partial Statement of Cash Flows
For the Year Ended December 31, 2014
Cash flows from operating activities
Title
Amount
Adjustments to reconcile net income to net cash
provided by operating activities
Title
Formula
Title
Amount
Title
Amount
Formula
Title
Amount
Title
Amount
KimFin_7e_SET_Ch12.xlsx, Page 17 of 30 Page(s), 4/15/202211:59 AM
$65,000
Accounts payable
27,000
Income taxes payable
23,000
18,000
Income tax expense
$204,000
Mosley’s balance sheet contained these comparative data at December 31.
Net income
80,000
2014
2013
Accounts receivable
$72,000
Financial Accounting, Seventh Edition by Kimmel, Weygandt, and Kieso
Primer on Using Excel in Accounting by Rex A Schildhouse
P12-5B, Prepare the operating activities section—indirect method.
The income statement of Mosley Inc. reported the following condensed information.
MOSLEY INC.
Depreciation expense
Operating expenses, excluding depreciation
56,000
4,000
Income from operations
Loss on disposal of plant assets
566,000
284,000
Name:
Solution
Date:
Instructor:
Course:
Income Statement
For the Year Ended December 31, 2014
Service revenue
$850,000
$506,000
35,000
Depreciation expense
$56,000
Accounts payable pertain to operating expenses.
Instructions:
Prepare the operating activities section of the statement of cash flows using the indirect method.
MOSLEY INC.
Partial Statement of Cash Flows
For the Year Ended December 31, 2014
Cash flows from operating activities
Net income
$204,000
Adjustments to reconcile net income to net cash
provided by operating activities
Net cash provided by operating activities
$254,000
Increase in accounts payable
5,000
50,000
Loss on disposal of plant assets
Increase in accounts receivable
KimFin_7e_SET_Ch12.xlsx, Page 18 of 30 Page(s), 4/15/202211:59 AM
Name:
Date:
Instructor:
Course:
$850,000
$506,000
Income from operations
284,000
Income tax expense
80,000
Financial Accounting, Seventh Edition by Kimmel, Weygandt, and Kieso
Primer on Using Excel in Accounting by Rex A Schildhouse
P12-6B, Prepare the operating activities section—direct method.
The income statement of Mosley Inc. reported the following condensed information.
MOSLEY INC.
Income Statement
For the Year Ended December 31, 2014
Service revenue
56,000
4,000
Loss on disposal of plant assets
Depreciation expense
Operating expenses, excluding depreciation
566,000
$72,000
$65,000
Accounts payable
27,000
35,000
Income taxes payable
23,000
18,000
Net income
$204,000
Mosley’s balance sheet contained these comparative data at December 31.
2014
2013
Accounts receivable
Accounts payable pertain to operating expenses.
Instructions:
Prepare the operating activities section of the statement of cash flows using the direct method.
MOSLEY INC.
Partial Statement of Cash Flows
For the Year Ended December 31, 2014
Title
Amount
Formula
Title
Formula
Cash flows from operating activities
Title
Amount
Less title
Title
Amount
Calculation as desired
(2)
Computation of cash payments for operating expenses
Title
Amount
Title
Amount
(1)
Computation of cash receipts from customers
Title
Amount
Add: Title
Amount
Title
Formula
Amount
Title
Formula
Calculation as desired
Title
Formula
Calculation as desired
(3)
Title
Amount
Title
KimFin_7e_SET_Ch12.xlsx, Page 19 of 30 Page(s), 4/15/202211:59 AM
Name:
Solution
Date:
Instructor:
Course:
$850,000
$506,000
Income from operations
284,000
Income tax expense
80,000
Financial Accounting, Seventh Edition by Kimmel, Weygandt, and Kieso
Primer on Using Excel in Accounting by Rex A Schildhouse
P12-6B, Prepare the operating activities section—direct method.
The income statement of Mosley Inc. reported the following condensed information.
MOSLEY INC.
Income Statement
For the Year Ended December 31, 2014
Service revenue
56,000
4,000
Loss on disposal of plant assets
Depreciation expense
Operating expenses, excluding depreciation
566,000
$72,000
$65,000
Accounts payable
27,000
35,000
Income taxes payable
23,000
18,000
Net income
$204,000
Mosley’s balance sheet contained these comparative data at December 31.
2014
2013
Accounts receivable
Accounts payable pertain to operating expenses.
Instructions:
Prepare the operating activities section of the statement of cash flows using the direct method.
MOSLEY INC.
Partial Statement of Cash Flows
For the Year Ended December 31, 2014
For income taxes (3)
Net cash provided by operating activities
$254,000
Computation of cash receipts from customers
Cash flows from operating activities
Cash receipts from customers (1)
$843,000
Less cash payments:
For operating expenses (2)
$514,000
KimFin_7e_SET_Ch12.xlsx, Page 20 of 30 Page(s), 4/15/202211:59 AM
1. Depreciation expense was
2.
4.
Financial Accounting, Seventh Edition by Kimmel, Weygandt, and Kieso
Primer on Using Excel in Accounting by Rex A Schildhouse
P12-7B, Prepare a statement of cash flows—indirect method, and compute cash-based ratios.
Presented below are the financial statements of Filmore Company.
FILMORE COMPANY
Comparative Balance Sheets
Name:
Date:
Instructor:
Course:
Accounts receivable
23,000
14,000
Inventory
41,000
25,000
December 31
Assets
2014
2013
Cash
$25,000
$33,000
Property, plant, and equipment
$73,000
$78,000
Less: Accumulated depreciation
(27,000)
46,000
(24,000)
54,000
Accounts payable
$23,000
$46,000
Income taxes payable
26,000
23,000
Total
$135,000
$126,000
Liabilities and Stockholders’ Equity
Retained earnings
41,000
22,000
Total
$135,000
$126,000
Bonds payable
20,000
10,000
Common stock
25,000
25,000
FILMORE COMPANY
Income Statement
For the Year Ended December 31, 2014
Sales revenue
$295,000
Cost of goods sold
194,000
Income from operations
64,000
Interest expense
3,000
Income before income taxes
61,000
Gross profit
101,000
Selling expenses
$28,000
Administrative expenses
9,000
37,000
3.
During the year equipment was sold for
$10,000
cash. This equipment cost
$13,000
Income tax expense
14,000
Net income
$47,000
Additional data:
originally and had accumulated depreciation of
$3,000
at the time of sale.
Additional equipment was purchased for
$8,000
cash.
$6,000
Dividends of
$28,000
were declared and paid.
KimFin_7e_SET_Ch12.xlsx, Page 21 of 30 Page(s), 4/15/202211:59 AM
Name:
Date:
Instructor:
Course:
+
+
– – =
Amount
Adjustments to reconcile net income to net cash
provided by operating activities
Title
Amount
Instructions:
(a) Prepare a statement of cash flows using the indirect method.
FILMORE COMPANY
Statement of Cash Flows
For the Year Ended December 31, 2014
Cash flows from operating activities
Net income
Title
Amount
Title
Amount
Formula
Title
Amount
Title
Amount
Title
Amount
Net cash provided by investing activities
Formula
Title
Formula
Cash flows from investing activities
Title
Amount
Title
Formula
Title
Formula
Title
Amount
Cash flows from financing activities
Title
Amount
Title
Amount
Formula
Times
Number
Title
Formula
(b) (1) Compute the current cash debt coverage ratio.
Amount
÷
Amount
Amount
=
Formula
Times
Number
Calculation as desired
Calculation as desired
(b) (2) Compute the cash debt coverage ratio.
Amount
÷
Amount
Amount
=
Calculation as desired
Calculation as desired
(b) (3) Compute the free cash flow.
Amount
Amount
Amount
Formula
KimFin_7e_SET_Ch12.xlsx, Page 22 of 30 Page(s), 4/15/202211:59 AM
1. Depreciation expense was
2.
During the year equipment was sold for
$10,000
originally and had accumulated depreciation of
$3,000
at the time of sale.
Additional equipment was purchased for
$8,000
Financial Accounting, Seventh Edition by Kimmel, Weygandt, and Kieso
Primer on Using Excel in Accounting by Rex A Schildhouse
P12-7B, Prepare a statement of cash flows—indirect method, and compute cash-based ratios.
Presented below are the financial statements of Filmore Company.
FILMORE COMPANY
Comparative Balance Sheets
Name:
Solution
Date:
Instructor:
Course:
Inventory
$73,000
$78,000
$23,000
$46,000
December 31
Assets
2014
2013
Cash
$25,000
$33,000
FILMORE COMPANY
Income Statement
For the Year Ended December 31, 2014
Sales revenue
$295,000
Cost of goods sold
194,000
Income from operations
Interest expense
Income before income taxes
Gross profit
101,000
Selling expenses
$28,000
Administrative expenses
Income tax expense
Net income
$47,000
Additional data:
$6,000
Dividends of
$28,000
were declared and paid.
KimFin_7e_SET_Ch12.xlsx, Page 23 of 30 Page(s), 4/15/202211:59 AM
Name:
Solution
Date:
Instructor:
Course:
$47,000
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation expense
$6,000
Instructions:
(a) Prepare a statement of cash flows using the indirect method.
FILMORE COMPANY
Statement of Cash Flows
For the Year Ended December 31, 2014
Cash flows from operating activities
Net income
Increase in accounts receivable
Increase in income taxes payable
3,000
Net increase in cash
Cash flows from financing activities
Issuance of bonds
10,000
Payment of dividends
Cash flows from investing activities
Sale of equipment
10,000
(b) (1) Compute the current cash debt coverage ratio.
(b) (2) Compute the cash debt coverage ratio.
(b) (3) Compute the free cash flow.
KimFin_7e_SET_Ch12.xlsx, Page 24 of 30 Page(s), 4/15/202211:59 AM
1.
2.
4.
5.
6.
7.
8.
Financial Accounting, Seventh Edition by Kimmel, Weygandt, and Kieso
Primer on Using Excel in Accounting by Rex A Schildhouse
P12-8B, Prepare a statement of cash flows—direct method, and compute cash-based ratios.
Presented below are the financial statements of Filmore Company.
FILMORE COMPANY
Comparative Balance Sheets
Name:
Date:
Instructor:
Course:
Accounts receivable
23,000
14,000
Merchandise inventory
41,000
25,000
December 31
Assets
2014
2013
Cash
$25,000
$33,000
Property, plant, and equipment
$73,000
$78,000
Accumulated depreciation
(27,000)
46,000
(24,000)
54,000
Income taxes payable
26,000
23,000
Bonds payable
20,000
10,000
Total
$135,000
$126,000
Liabilities and Stockholders’ Equity
Accounts payable
$23,000
$46,000
FILMORE COMPANY
Income Statement
For the Year Ended December 31, 2014
Selling expenses
$28,000
Administrative expenses
9,000
37,000
Service revenue
$295,000
Cost of goods sold
194,000
Net income
$47,000
Gross profit
101,000
Income tax expense
14,000
Income from operations
64,000
Common stock
25,000
Total
$135,000
25,000
Retained earnings
41,000
22,000
$126,000
During the year equipment was sold for
$10,000
cash. This equipment cost
$3,000
Accounts payable pertains to merchandise creditors.
Interest expense
Additional data:
Depreciation expense was
$6,000
at the time of sale.
3,000
Income before income taxes
61,000
All operating expenses except for depreciation are paid in cash.
Dividends of
$28,000
were declared and paid.
All depreciation expense is in the selling expense category.
All sales and purchases are on account.
$13,000
originally and had accumulated depreciation of
Additional equipment was purchased for
$8,000
cash.
3.
KimFin_7e_SET_Ch12.xlsx, Page 25 of 30 Page(s), 4/15/202211:59 AM
Name:
Date:
Instructor:
Course:
Formula
Formula
Title
Formula
Title
Formula
Instructions:
(a) Prepare a statement of cash flows using the direct method.
Net cash provided by operating activities
Formula
Cash flows from investing activities
Title
Amount
Title
FILMORE COMPANY
Statement of Cash Flows
For the Year Ended December 31, 2014
Cash flows from operating activities
Title
Formula
Less cash payments:
Title
Formula
Title
Title
Amount
Title
Formula
Amount
Net cash provided by investing activities
Formula
Cash flows from financing activities
Title
Amount
Title
Formula
Title
Amount
Title
Formula
Computations:
(1)
Cash receipts from customers
Title
Amount
Title
Amount
Title
Formula
(2)
Cash payments to suppliers
Title
Amount
Title
Amount
Title
(3)
Cash payments for operating expenses
Title
Amount
Title
Amount
Title
Formula
Formula
Title
Amount
Title
Formula
KimFin_7e_SET_Ch12.xlsx, Page 26 of 30 Page(s), 4/15/202211:59 AM
Name:
Date:
Instructor:
Course:
+
+
– – =
(4)
Cash payments for income taxes
Title
Amount
Add: Title
Amount
Title
Formula
(b) (1) Compute the current cash debt coverage ratio.
Amount
÷
Amount
Amount
=
Calculation as desired
Calculation as desired
(b) (2) Compute the cash debt coverage ratio.
Formula
Times
Number
Number
Calculation as desired
Calculation as desired
Amount
÷
Amount
Amount
=
Formula
Times
(b) (3) Compute the free cash flow.
Amount
Amount
Amount
Formula
KimFin_7e_SET_Ch12.xlsx, Page 27 of 30 Page(s), 4/15/202211:59 AM
1.
2.
During the year equipment was sold for
$10,000
$3,000
Accounts payable pertains to merchandise creditors.
at the time of sale.
All operating expenses except for depreciation are paid in cash.
All depreciation expense is in the selling expense category.
All sales and purchases are on account.
originally and had accumulated depreciation of
Additional equipment was purchased for
$8,000
Financial Accounting, Seventh Edition by Kimmel, Weygandt, and Kieso
Primer on Using Excel in Accounting by Rex A Schildhouse
P12-8B, Prepare a statement of cash flows—direct method, and compute cash-based ratios.
Presented below are the financial statements of Filmore Company.
FILMORE COMPANY
Comparative Balance Sheets
Name:
Solution
Date:
Instructor:
Course:
Accounts receivable
23,000
14,000
Merchandise inventory
41,000
25,000
Property, plant, and equipment
$73,000
$78,000
Accumulated depreciation
Income taxes payable
26,000
23,000
Bonds payable
20,000
10,000
Accounts payable
$23,000
$46,000
Common stock
25,000
25,000
Retained earnings
December 31
Assets
2014
2013
Cash
$25,000
$33,000
FILMORE COMPANY
Income Statement
For the Year Ended December 31, 2014
Selling expenses
$28,000
Administrative expenses
Net income
$47,000
Income tax expense
Income from operations
64,000
Interest expense
Income before income taxes
61,000
Service revenue
$295,000
Cost of goods sold
194,000
Gross profit
101,000
Additional data:
Depreciation expense was
$6,000
Dividends of
$28,000
were declared and paid.
KimFin_7e_SET_Ch12.xlsx, Page 28 of 30 Page(s), 4/15/202211:59 AM
Name:
Solution
Date:
Instructor:
Course:
31,000
Instructions:
(a) Prepare a statement of cash flows using the direct method.
Cash flows from investing activities
Sale of equipment
10,000
Sale of equipment
Net cash provided by investing activities
FILMORE COMPANY
Statement of Cash Flows
For the Year Ended December 31, 2014
Cash flows from operating activities
Cash receipts from customers (1)
$286,000
Less cash payments:
Cash flows from financing activities
Issuance of bonds
10,000
Computations:
(1)
Cash receipts from customers
Sales
$295,000
Deduct: Increase in accounts receivable
9,000
Cash receipts from customers
Cash payments to suppliers
$194,000
Add: Increase in inventory
(3)
Cash payments for operating expenses
Deduct: Depreciation
6,000
Cash payments for operating expenses
Deduct: Increase in accounts payable
Cash payments to suppliers
KimFin_7e_SET_Ch12.xlsx, Page 29 of 30 Page(s), 4/15/202211:59 AM
Name:
Solution
Date:
Instructor:
Course:
+
(b) (3) Compute the free cash flow.
$28,000
$49,000
$69,000
(4)
Cash payments for income taxes
Income tax expense
$14,000
Add: Decrease in income taxes payable
(3,000)
Cash payments for income taxes
$11,000
(b) (1) Compute the current cash debt coverage ratio.
(b) (2) Compute the cash debt coverage ratio.
$69,000
$79,000
KimFin_7e_SET_Ch12.xlsx, Page 30 of 30 Page(s), 4/15/202211:59 AM