PROBLEM 12-1B
Transaction
SCF Activity
Affected
Cash Inflow,
Outflow, or No
Effect?
(a)
Purchased shares of common
treasury stock.
F
Cash outflow
(b)
Paid a cash dividend
to common stockholders.
F
Cash outflow
Recorded cash sales.
(d)
Recorded sales on account.
Recorded prepayment of
insurance expense.
O
Purchased supplies on
account.
O
No cash flow effect
(g)
Recorded amortization
expense on a patent.
O
No cash flow effect
(h)
Recorded and received
interest revenue.
O
Cash inflow
a sale of plant assets.
Acquired land by issuing
a note payable.
No cash flow effect
PROBLEM 12-2B
(a) Cash inflows (outflows) related to plant assets 2017:
Equipment purchase ……………………… ($85,000)
Land purchase ………………………………. (50,000)
Note to instructor—some students may find journal entries helpful in under–
standing this exercise.
Equipment ……………………………………………………………. 85,000
Cash ……………………………………………………………… 85,000
(b) Equipment purchase Investing activities (outflow)
Land purchase Investing activities (outflow)
PROBLEM 12-3B
HUBBLE COMPANY
Partial Statement of Cash Flows
For the Year Ended December 31, 2017
Cash flows from operating activities
Net income ………………………………………………. $1,245,000
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation expense ………………………… $105,000
Amortization expense ………………………… 15,000
*PROBLEM 12-4B
HUBBLE COMPANY
Partial Statement of Cash Flows
For the Year Ended December 31, 2017
Cash flows from operating activities
Cash receipts from customers ……… $5,890,000 (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 12-5B
MOSLEY COMPANY
Partial Statement of Cash Flows
For the Year Ended December 31, 2017
Cash flows from operating activities
Net income ……………………………………………….. $204,000
Adjustments to reconcile net income
to net cash provided by operating
activities
Depreciation expense …………………………. $56,000
*PROBLEM 12-6B
MOSLEY COMPANY
Partial Statement of Cash Flows
For the Year Ended December 31, 2017
Cash flows from operating activities
Cash receipts from customers ……… $843,000 (1)
Less cash payments:
(1) Computation of cash receipts from customers
Revenues $850,000
(2) Computation of cash payments for operating expenses
Operating expenses per income statement $506,000
(3) Computation of cash payments for income taxes
Income tax expense per income statement $80,000
PROBLEM 12-7B
(a) FILMORE COMPANY
Statement of Cash Flows
For the Year Ended December 31, 2017
Cash flows from operating activities
Net income …………………………………………….. $47,000
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation expense ……………………… $ 6,000
Increase in accounts receivable ………. (9,000)
Cash flows from investing activities
Sale of equipment ………………………………….. 10,000
Purchase of equipment ………………………….. (8,000)
Net cash provided by investing
activities ……………………………………… 2,000
PROBLEM 12-7B (Continued)
(b) 1. $8,000 ÷
$49,000*+ $69,000**
2
= .136 times
2. $8,000 ÷
$69,000* +$79,000**
2
= .108 times
*PROBLEM 12-8B
(a) FILMORE 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)
Cash flows from investing activities
Sale of equipment …………………….. 10,000
Purchase of equipment …………….. (8,000)
Cash flows from financing activities
Issuance of bonds …………………….. 10,000
Computations:
(1) Cash receipts from customers
Sales ………………………………………………………………. $295,000
*PROBLEM 12-8B (Continued)
(2) Cash payments to suppliers
Cost of goods sold ……………………………………………….. $194,000
(3) Cash payments for income taxes
Income tax expense ……………………………………………… $ 14,000
(b) 1. $8,000 ÷
$49,000* +$ 69,000**
2
= .136 times
*$23,000 + $26,000 **$46,000 + $23,000
PROBLEM 12-9B
TURNER INC.
Statement of Cash Flows
For the Year Ended December 31, 2017
Cash flows from operating activities
Net income ……………………………………………….. $137,000
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation expense …………………………. $ 50,000
Loss on disposal of plant assets …………. 9,000
Cash flows from investing activities
Sale of plant assets …………………………………… 2,000
Purchase of plant assets …………………………... (90,000)
*PROBLEM 12-10B
TURNER INC.
Statement of Cash Flows
For the Year Ended December 31, 2017
Cash flows from operating activities
Cash receipts from customers ………….. $594,000 (1)
Less cash payments:
To suppliers ……………………………… $294,000 (2)
Cash flows from investing activities
Sale of plant assets ………………………….. 2,000
Purchase of plant assets ………………….. (90,000)
Purchase of investments ………………….. (32,000)
Net cash used by investing
activities ……………………………….. (120,000)
Computations:
(1) Cash receipts from customers
Sales ………………………………………… $610,000
*PROBLEM 12-10B (Continued)
(2) Cash payments to suppliers
Cost of goods sold …………………………..…………………….. $290,000
(3) Cash payments for operating expenses
Operating expenses exclusive of
PROBLEM 12-11B
BERKLER COMPANY
Statement of Cash Flows
For the Year Ended December 31, 2017
Cash flows from operating activities
Net income ……………………………………………………. $46,000
Adjustments to reconcile net income
to net cash provided by operating
Cash flows from investing activities
Sale of land …………………………………………………… 34,000
Sale of equipment …………………………………………. 9,000
PROBLEM 12-12B
Transaction
Free Cash
Flow
($80,000)
Current
Cash Debt
Coverage
Ratio
(0.7 times)
Cash Debt
Coverage
Ratio
(0.4 times)
(a)
Recorded cash sales
$4,800.
I
I
I
(b)
Sold land for $20,000
cash.
NE
NE
NE
(c)
Declared $6,000 cash
dividends.
NE
dividends declared
last year.
(e)
Paid amount owed
to suppliers, $9,400.
common stock.