CHAPTER 16 Statement of Cash Flows
Prob. 16-1A
Cash flows from (used for) operating activities:
and liabilities:
Increase in accounts receivable (60,000)
Increase in inventories (24,000)
Increase in accounts payable 48,000
Decrease in accrued expenses
payable (6,000)
Net cash flows from operating activities $ 588,000
*Accumulated Depreciation: $720,000 – $600,000
** $108,000 + $30,000 – $36,000 = $102,000
PROBLEMS
For the Year Ended December 31, 20Y3
Iglesias Inc.
Statement of Cash Flows
CHAPTER 16 Statement of Cash Flows
Prob. 16-1A (Concluded)
Appendix 1 (Optional)
Balance, Balance,
Account Title Dec. 31, 20Y2 Dec. 31, 20Y3
Cash 180,000 (m) 6,000 186,000
Accum. depr.—equipment (600,000) (g) 120,000 (720,000)
Accounts payable (360,000) (f) 48,000 (408,000)
Accrued expenses payable (60,000) (e) 6,000 (54,000)
Dividends payable (30,000) (d) 6,000 (36,000)
Increase in accounts
receivable (l) 60,000
Increase in inventories (k) 24,000
Increase in accounts payable (f) 48,000
Decrease in accrued
expenses payable (e) 6,000
Investing activities:
Purchase of equipment (h) 240,000
The letters in the Debit and Credit columns are included for reference purposes. They do
not correspond to the letters in the additional data section of this problem.
Debit Credit
Iglesias Inc.
Spreadsheet (Work Sheet) for Statement of Cash Flows
For the Year Ended December 31, 20Y3
Transactions
CHAPTER 16 Statement of Cash Flows
Prob. 16-2A
Cash flows from (used for) operating activities:
Net income $ 359,000
Increase in accounts payable 19,000
Net cash flows from operating activities $ 425,000
Cash flows from (used for) investing activities:
Cash paid for equipment $ (750,000)
Net cash flows used for investing activities (750,000)
Cash flows from (used for) financing activities:
*76,000 shares × $15 = $1,140,000
Note to Instructors: The disposal of fully depreciated equipment is not included in
the cash flow statement because there is no associated cash flow. This transaction
strictly involves the removal of $142,000 from the equipment and accumulated
depreciation—equipment accounts.
For the Year Ended December 31, 20Y8
Orange Angel Enterprises Inc.
Statement of Cash Flows
CHAPTER 16 Statement of Cash Flows
Prob. 16-2A (Concluded)
Appendix 1 (Optional)
Balance, Balance,
Account Title Dec. 31, 20Y7 Dec. 31, 20Y8
Accounts payable (171,000) (e) 19,000 (190,000)
Mortgage note payable (759,000) (d) 759,000 —
Common stock, $10 par (380,000) (c) 760,000 (1,140,000)
Paid-in capital in excess
of par—common stock (190,000) (c) 380,000 (570,000)
Increase in merchandise
inventory (j) 209,000
Increase in prepaid expenses (i) 9,000
Increase in accounts payable (e) 19,000
Investing activities:
Purchase of equipment (h) 750,000
Financing activities:
Payment of cash dividends (b) 95,000
The letters in the Debit and Credit columns are included for reference purposes. They
do not correspond to the letters in the additional data section of this problem.
Debit Credit
Orange Angel Enterprises Inc.
Spreadsheet (Work Sheet) for Statement of Cash Flows
For the Year Ended December 31, 20Y8
Transactions
CHAPTER 16 Statement of Cash Flows
Prob. 16-3A
Cash flows from (used for) operating activities:
and liabilities:
Increase in accounts receivable (66,960)
Increase in inventories (105,480)
Decrease in prepaid expenses 5,760
Decrease in accounts payable (35,820)
Cash paid for purchase of equipment (104,400)
Net cash flows used for investing activities (514,800)
Cash flows from (used for) financing activities:
Cash received from issuing bonds payable $ 270,000
Cash received from issuing common stock 400,000
*$26,280 + $29,340
** $151,200 – $163,800
*** When a company has negative cash flow from operations, the total is described as net
cash used for operating activities.
For the Year Ended December 31, 20Y2
Whitman Co.
Statement of Cash Flows
CHAPTER 16 Statement of Cash Flows
Prob. 16-3A (Concluded)
Appendix 1 (Optional)
Balance, Balance,
Account Title Dec. 31, 20Y1 Dec. 31, 20Y2
Accum. depr.—buildings (382,320) (e) 26,280 (408,600)
Equipment 454,680 (i) 104,400 (j) 46,800 512,280
Accum. depr.—equipment (158,760) (j) 46,800 (d) 29,340 (141,300)
Accounts payable (958,320) (c) 35,820 (922,500)
(b) 32,400
Totals 0 988,780 988,780 0
Operating activities:
Net loss (a) 35,320
Depreciation—equipment (d) 29,340
Depreciation—buildings (e) 26,280
Loss on sale of land (l) 12,600
Increase in accts. receivable (g) 66,960
Increase in inventories (h) 105,480
Decrease in prepaid expenses (f) 5,760
Totals 941,980 941,980
Debit Credit
Whitman Co.
Spreadsheet (Work Sheet) for Statement of Cash Flows
For the Year Ended December 31, 20Y2
Transactions
CHAPTER 16 Statement of Cash Flows
Appendix 2 Prob. 16-4A
Cash flows from (used for) operating activities:
Cash flows from (used for) investing activities:
Cash received from sale of investments $ 176,000
Cash paid for purchase of land (520,000)
Cash paid for purchase of equipment (200,000)
Net cash flows used for investing activities (544,000)
Cash flows from (used for) financing activities:
Schedule Reconciling Net Income with Net Cash Flows from Operating Activities:
Cash flows from (used for) operating activities:
Net income…………………………………………………………………
…
$217,200
Adjustments to reconcile net income to net cash flows
from (used for) operating activities:
Depreciation…………………………………………………………
…
44,000
Loss on sale of investments……………………………………… 64,000
Changes in current operating assets and liabilities:
For the Year Ended December 31, 20Y6
Canace Products Inc.
Statement of Cash Flows
CHAPTER 16 Statement of Cash Flows
Appendix 2 Prob. 16-4A (Concluded)
Computations:
1. Sales………………………………………………………………………………
…
$5,980,000
Increase in accounts receivable………………………………………………
…
(19,400)
Cash received from customers………………………………………………
…
$5,960,600
…
…
CHAPTER 16 Statement of Cash Flows
Appendix 2 Prob. 16-5A
Cash flows from (used for) operating activities:
Cash received from customers1$ 3,540,000
Cash paid for merchandise2(1,656,000)
Cash paid for purchase of land (600,000)
Cash paid for purchase of equipment (240,000)
Net cash flows used for investing activities (630,000)
Cash flows from (used for) financing activities:
Cash received from issuing common stock $ 150,000
Cash dividends4(102,000)
Schedule Reconciling Net Income with Net Cash Flows from Operating Activities:
Cash flows from (used for) operating activities:
Net income………………………………………………………………… $600,000
Adjustments to reconcile net income to net cash flows
from (used for) operating activities:
Depreciation…………………………………………………………
…
120,000
Gain on sale of investments……………………………………… (90,000)
Changes in current operating assets and liabilities:
For the Year Ended December 31, 20Y3
Iglesias Inc.
Statement of Cash Flows
CHAPTER 16 Statement of Cash Flows
Appendix 2 Prob. 16-5A (Concluded)
Computations:
1. Sales……………………………………………………………………………… $3,600,000
Increase in accounts receivable……………………………………………
…
(60,000)
Cash received from customers……………………………………………
…
$3,540,000
3. Operating expenses other than depreciation……………………………
…
$1,140,000
Decrease in accrued expenses payable…………………………………… 6,000
Cash paid for operating expenses…………………………………………
…
$1,146,000
CHAPTER 16 Statement of Cash Flows
Prob. 16-1B
Cash flows from (used for) operating activities:
Net income $ 141,680
and liabilities:
Increase in accounts receivable (19,040)
Increase in inventories (8,670)
Increase in accounts payable 11,560
Increase in accrued expenses
Cash paid for purchase of land (295,800)
Cash paid for purchase of equipment (80,580)
Net cash flows used for investing activities (284,580)
Cash flows from (used for) financing activities:
Cash received from issuing common stock $ 250,000
*$91,800 – $102,000 = $10,200 loss on sale of investment
** $102,000 + $20,400 – $25,500 = $96,900
For the Year Ended December 31, 20Y9
Merrick Equipment Co.
Statement of Cash Flows
CHAPTER 16 Statement of Cash Flows
Prob. 16-1B (Concluded)
Appendix 1 (Optional)
Balance, Balance,
Account Title Dec. 31, 20Y8 Dec. 31, 20Y9
Accum. depr.—equipment (84,320) (g) 14,790 (99,110)
Accounts payable (194,140) (f) 11,560 (205,700)
Accrued expenses payable (26,860) (e) 3,740 (30,600)
Dividends payable (20,400) (d) 5,100 (25,500)
Common stock, $1 par (102,000) (c) 100,000 (202,000)
Operating activities:
Net income (a) 141,680
Depreciation (g) 14,790
Loss on sale of investments (j) 10,200
Increase in accounts
receivable (l) 19,040
Increase in inventories (k) 8,670
Increase in accounts payable (f) 11,560
Increase in accrued expenses
payable (e) 3,740
Investing activities:
The letters in the Debit and Credit columns are included for reference purposes. They
do not correspond to the letters in the additional data section of this problem.
Debit Credit
Merrick Equipment Co.
Spreadsheet (Work Sheet) for Statement of Cash Flows
For the Year Ended December 31, 20Y9
Transactions
CHAPTER 16 Statement of Cash Flows
Prob. 16-2B
Cash flows from (used for) operating activities:
Net income $ 524,580
Increase in accounts receivable (73,080)
Decrease in inventories 134,680
Increase in prepaid expenses (6,440)
Decrease in accounts payable (89,600)
Decrease in salaries payable (8,120)
Cash dividends* (123,480)
Net cash flows from financing activities 100,520
Net increase in cash $ 82,320
Cash balance, January 1, 20Y4 360,920
Cash balance, December 31, 20Y4 $ 443,240
$131,040 + $25,200 – $32,760 = $123,480
For the Year Ended December 31, 20Y4
Harris Industries Inc.
Statement of Cash Flows
*
CHAPTER 16 Statement of Cash Flows
Prob. 16-2B (Continued)
Appendix 1 (Optional)
Balance, Balance,
Account Title Dec. 31, 20Y3 Dec. 31, 20Y4
Cash 360,920 (p) 82,320 443,240
Accum. depr.—buildings (414,540) (k) 51,660 (466,200)
Machinery and equipment 781,200 781,200
Accum. depr.—machinery
and equipment (191,520) (j) 22,680 (214,200)
Patents 112,000 (i) 5,040 106,960
Accounts payable (927,080) (h) 89,600 (837,480)
Dividends payable (25,200) (g) 7,560 (32,760)
Salaries payable (87,080) (f) 8,120 (78,960)
The letters in the Debit and Credit columns are included for reference purposes. They
do not correspond to the letters in the additional data section of this problem.
Debit Credit
Harris Industries Inc.
Spreadsheet (Work Sheet) for Statement of Cash Flows
For the Year Ended December 31, 20Y4
Transactions