12-1
CHAPTER 12
SOLUTIONS TO EXERCISES—SET B
EXERCISE 12-1B
(a) Noncash investing and financing activities.
(b) Financing activities.
EXERCISE 12-2B
(a)
(b)
Operating activity.
Noncash investing and
(h)
(i)
Financing activity.
Operating activity.
EXERCISE 12-3B
Point in Time
Phase
Maturity phase
A
B
Growth phase
Introductory phase
EXERCISE 12-3B (Continued)
During the introductory phase (point B), cash from operations and investing
EXERCISE 12-4B
BRAZIL COMPANY
Partial Statement of Cash Flows
For the Year Ended December 31, 2017
Cash flows from operating activities
Net income ………………………………………………… $200,000
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation expense …………………………. $45,000
12-3
EXERCISE 12-5B
ALBERT INC.
Partial Statement of Cash Flows
For the Year Ended December 31, 2017
Cash flows from operating activities
Net income ……………………………………………….. $163,000
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation expense …………………………. $17,000
EXERCISE 12-6B
MAYER CORPORATION
Statement of Cash Flows—Indirect Method
For the Year Ended December 31, 2017
Cash flows operating activities
Net income ………………………………………………………….. $289,100
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation expense …………………………………… $162,000
Increase in accounts receivable ……………………. (8,200)
Cash flows from investing activities
Sale of land ………………………………………………….. 40,000
Cash flows from financing activities
Issuance of bonds ………………………………………… 100,000
Payment of dividend …………………………………….. (12,000)
12-5
EXERCISE 12-7B
PURINA CORP.
Partial Statement of Cash Flows
For the Year Ended December 31, 2017
Cash flows from operating activities
Net income ……………………………………………….. $ 72,000
Adjustments to reconcile net income
to net cash provided by operating
Cash flows from investing activities
Sale of equipment ……………………………………… 23,000
Purchase of equipment …………………………..…. (70,000)
*Cost of equipment sold ……………………………. $49,000
Accumulated depreciation ……………………….. (16,000)
EXERCISE 12-8B
MARZANO COMPANY
Statement of Cash Flows
For the Year Ended December 31, 2017
Cash flows from operating activities
Net income …………………………………………. $103,000
Adjustments to reconcile net income
to net cash provided by operating
activities:
Cash flows from investing activities
Sale of land ………………………………………… 20,000
Purchase of equipment ……………………….. (65,000)
Net cash used by investing
activities ………………………………….. (45,000)
Cash flows from financing activities
12-7
EXERCISE 12-9B
PepsiCo
Coca-Cola
EXERCISE 12-10B
Widow
Corporation
Haggerty
Corporation
$85,000 – $40,000 – $5,000
$110,000 – $70,000 – $10,000
*EXERCISE 12-11B
Sales revenue …………………………………………………. $188,000
Deduct: Increase in accounts receivable ………… 50,000
Cash receipts from customers* ………………… $138,000
*
Accounts Receivable
Balance, Beginning of year
Revenues for the year 188,000
Cash receipts for year 138,000
Balance, End of year 50,000
Payments for the year 60,000
Balance, Beginning of year 0
Operating expenses for year 83,000
Balance, End of year 23,000
12-9
*EXERCISE 12-12B
(a) Cash payments to suppliers
Cost of goods sold ……………………. $5,487.4 million
Add: Increase in inventory ……….. 12.9
(b) Cash payments for operating expenses
Operating expenses exclusive
*EXERCISE 12-13B
Cash flows from operating activities
Cash receipts from
Customers …………………………………………. $243,000*
*EXERCISE 12-14B
BRANSON MILLS CORP.
Statement of Cash Flows—Direct Method
For the Year Ended December 31, 2017
Cash flows from operating activities
Cash receipts from customers ……………………… $576,100
Less: Cash payments:
For goods and services ………………………….. $279,100
Cash flows from investing activities
Sale of building ……………………………………… 197,600
Purchase of equipment ………………………….. (113,200)
Net cash provided by investing
activities ……………………………………….. 84,400
*EXERCISE 12-15B
Cash payments for rent
Rent expense ……………………………………………………… $ 40,000
Add: Increase in prepaid rent ……………………………… 1,500
Cash payments for rent ……………………………………….. $ 41,500