CHAPTER 12
SOLUTIONS TO PROBLEMS—SET C
PROBLEM 12-1C
Transaction
SCF Activity
Affected
Cash inflow, outflow,
or no cash flow effect?
(a)
Recorded depreciation
expense on the
plant assets.
O
No cash flow effect
(b)
Incurred a loss on
disposal of plant assets.
O
No cash flow effect
(c)
Acquired a building by
paying cash.
Cash outflow
(d)
Made principal
repayments on a
mortgage.
Issued common stock
another company to be
held as a long-term
stock investment.
(g)
Paid cash dividends to
common stockholders.
F
Cash outflow
(h)
system.
credit.
Paid wages to
employees.
O
Cash outflow
Sold inventory on credit.
The company uses a
perpetual inventory
O
No cash flow effect
PROBLEM 12-2C
(a) Cash inflows (outflows) related to plant assets 2017:
Equipment purchase ……………………… ($85,000)
Accumulated Depreciation removed from accounts for sale of equipment
Accumulated Depreciation—
Equipment
96,000
Plug 14,000
62,000
Note to instructor—some students may find journal entries helpful in under-
standing this exercise.
Equipment ……………………………………………………………. 85,000
Cash ……………………………………………………………… 85,000
PROBLEM 12-3C
HAUSER COMPANY
Partial Statement of Cash Flows
For the Year Ended December 31, 2017
Cash flows from operating activities
Net income ………………………………………………. $845,000
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation expense ………………………… $105,000
Amortization expense ………………………… 15,000
*PROBLEM 12-4C
HAUSER COMPANY
Partial Statement of Cash Flows
For the Year Ended December 31, 2017
Cash flows from operating activities
Cash receipts from customers ……… $5,490,000 (1)
Less cash payments:
Computations:
(1) Cash receipts from customers
(2) Cash payments to suppliers
Cost of goods sold ……………………………………. $3,290,000
(3) Cash payments for operating expenses
Operating expenses
($420,000 + $525,000) ………………. $ 945,000
PROBLEM 12-5C
ZAMORA INC.
Partial Statement of Cash Flows
For the Year Ended December 31, 2017
Cash flows from operating activities
Net income ……………………………………………….. $113,000
Adjustments to reconcile net income
to net cash provided by operating
activities:
*PROBLEM 12-6C
ZAMORA INC.
Partial Statement of Cash Flows
For the Year Ended December 31, 2017
Cash flows from operating activities
Cash receipts from customers ………….. $575,000 (1)
Less cash payments:
(1) Cash receipts from customers
Revenues ……………………………………………………………….. $560,000
(2) Cash payments for operating expenses
Operating expenses ………………………………………………… $400,000
(3) Cash payments for income taxes
Income tax expense ………………………………………………… $ 47,000
PROBLEM 12-7C
(a) KLEMMER COMPANY
Statement of Cash Flows
For the Year Ended December 31, 2017
Cash flows from operating activities
Net income …………………………………………….. $44,000
Adjustments to reconcile net income
to net cash provided by operating
activities:
PROBLEM 12-7C (Continued)
(b) 1. $5,000 ÷
$49,000*+ $69,000**
2
= .085 times
*PROBLEM 12-8C
(a) KLEMMER COMPANY
Statement of Cash Flows
For the Year Ended December 31, 2017
Cash flows from operating activities
Cash receipts from customers ….. $286,000 (1)
Less cash payments:
To suppliers ………………………. $233,000 (2)
For operating expenses
Cash flows from investing activities
Sale of equipment …………………….. 10,000
Cash flows from financing activities
Issuance of bonds …………………….. 10,000
Computations:
(1) Cash receipts from customers
Sales ………………………………………………………………. $295,000
*PROBLEM 12-8C (Continued)
(2) Cash payments to suppliers
Cost of goods sold ……………………………………………….. $194,000
(3) Cash payments for income taxes
Income tax expense ……………………………………………… $ 13,000
(b) 1. $5,000 ÷
$49,000* +$ 69,000**
2
= .085 times
PROBLEM 12-9C
CADET COMPANY
Statement of Cash Flows
For the Year Ended December 31, 2017
Cash flows from operating activities
Net income ……………………………………………….. $107,830
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation expense …………………………. $ 35,500
Gain on disposal of plant assets …………. (3,000)
Increase in accounts receivable ………….. (35,970)
Cash flows from investing activities
Sale of investments …………………………………… 17,500
Sale of plant assets …………………………………… 13,000
*PROBLEM 12-10C
CADET COMPANY
Statement of Cash Flows
For the Year Ended December 31, 2017
Cash flows from operating activities
Cash receipts from customers ………….. $258,530 (1)
Less cash payments:
To suppliers ……………………………… $114,290 (2)
Cash flows from investing activities
Sale of investments …………………………. 17,500
Sale of plant assets ………………………….. 13,000
Purchase of plant assets ………………….. (151,000)
Net cash used by investing
activities ……………………………….. (120,500)
*PROBLEM 12-10C (Continued)
Computations:
(1) Cash receipts from customers
(2) Cash payments to suppliers
Cost of goods sold …………………………………………………. $104,460
(3) Cash payments for operating expenses
PROBLEM 12-11C
LYBECK COMPANY
Statement of Cash Flows
For the Year Ended December 31, 2017
Cash flows from operating activities
Net income ……………………………………………………. $30,600
Adjustments to reconcile net income
to net cash provided by operating
activities:
Cash flows from investing activities
Sale of land …………………………………………………… 50,000
Sale of equipment …………………………………………. 25,000
Purchase of equipment………………………………….. (70,000)
Net cash provided by investing activities … 5,000