PROBLEM 12-3B
HUBBLE COMPANY
Partial Statement of Cash Flows
For the Year Ended December 31, 2014
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
Decrease in accounts receivable ………… 290,000
*PROBLEM 12-4B
HUBBLE COMPANY
Partial Statement of Cash Flows
For the Year Ended December 31, 2014
Cash flows from operating activities
Cash receipts from customers ……… $5,890,000 (1)
Less cash payments:
Computations:
(1) Cash receipts from customers
Sales ………………………………………………………… $5,600,000
(2) Cash payments to suppliers
Cost of goods sold ……………………………………. $3,290,000
Add: Increase in inventories …………………….. 140,000
(3) Cash payments for operating expenses
Operating expenses
($420,000 + $525,000) ………………. $ 945,000
Add: Increase in prepaid
PROBLEM 12-5B
MOSLEY COMPANY
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
Depreciation expense …………………………. $56,000
Loss on disposal of equipment …………… 4,000
*PROBLEM 12-6B
MOSLEY COMPANY
Partial Statement of Cash Flows
For the Year Ended December 31, 2014
Cash flows from operating activities
Cash receipts from customers ……… $843,000 (1)
Less cash payments:
For operating expenses ………… $514,000 (2)
(1) Computation of cash receipts from customers
Revenues $850,000
Deduct: Increase in accounts receivable
(2) Computation of cash payments for operating expenses
Operating expenses per income statement $506,000
Add: Decrease in accounts payable
(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, 2014
Cash flows from operating activities
Net income …………………………………………….. $47,000
Adjustments to reconcile net income
to net cash provided by operating
activities:
Cash flows from investing activities
Cash flows from financing activities
Issuance of bonds ………………………………….. 10,000
PROBLEM 12-7B (Continued)
(b) 1. $8,000 ÷
$49,000* + $69,000**
2 = .136 times
*PROBLEM 12-8B
(a) FILMORE COMPANY
Statement of Cash Flows
For the Year Ended December 31, 2014
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
Net decrease in cash ……………………….. (8,000)
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 ÷
$4 9, 0 00 * + $ 69 , 00 0 **
2 = .136 times
PROBLEM 12-9B
TURNER INC.
Statement of Cash Flows
For the Year Ended December 31, 2014
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
Cash flows from financing activities
Sale of common stock ……………………………….. 25,000
Net increase in cash …………………………………………. 4,000
*PROBLEM 12-10B
TURNER INC.
Statement of Cash Flows
For the Year Ended December 31, 2014
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
Cash flows from financing activities
Sale of common stock ……………………… 25,000
Net increase in cash ……………………………….. 4,000
Computations:
(1) Cash receipts from customers
Sales ………………………………………… $610,000
Deduct: Increase in accounts
*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
depreciation ……………………………………… $65,000
PROBLEM 12-11B
BERKLER COMPANY
Statement of Cash Flows
For the Year Ended December 31, 2014
Cash flows from operating activities
Net income ……………………………………………………. $46,000
Adjustments to reconcile net income
to net cash provided by operating
activities:
Cash flows from investing activities
Sale of land …………………………………………………… 34,000
Cash flows from financing activities
Payment of cash dividends ……………………………. (12,000)
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
(d) Paid $5,800 cash
dividends declared
last year.
D I I
BYP 12-1 FINANCIAL REPORTING PROBLEM
(a) Net cash provided by operating activities:
(c) Tootsie Roll uses the indirect method of computing and presenting the
net cash provided by operating activities.
BYP 12-2 COMPARATIVE ANALYSIS PROBLEM
(
a
)
Hershe
y
Tootsie Roll
1. Current cash
$580,867
$50,390
(b) Tootsie Roll’s current cash debt coverage provides a ratio of $0.86 of net
cash provided by operating activities for every dollar of current debt. It is