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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
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
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
