*EXERCISE 17-10
Sales revenue ………………………………………………….. $192,000)
Deduct: Increase in accounts receivable ………….. (60,000)
Cash receipts from customers* ………………….. $132,000
**
Accounts Receivable
Balance, Beginning of year 0
Revenues for the year 192,000
Cash receipts for year 132,000
Balance, End of year 60,000
**
Accounts Payable
*EXERCISE 17-11
(a) Cash payments to suppliers
Cost of goods sold ……………………………. $4,852.7 million
Add: Increase in inventory ……………….. 18.1
(b) Cash payments for operating expenses
Operating expenses exclusive
of depreciation ……………………………… $9,470.5 million
($10,671.5 – $1,201)
*EXERCISE 17-12
Cash flows from operating activities
Cash receipts from
Customers ………………………………………….. $230,000*
Dividend revenue ………………………………… 18,000*
$248,000*
Less cash payments:
To suppliers for merchandise ………………. 115,000
*EXERCISE 17-13
Cash payments for rent
Rent expense …………………………………………….. $ 48,000*
Cash payments for salaries
Salaries expense ………………………………………… $ 54,000*
Add: Decrease in salaries payable ……………… 2,000*
Cash payments for salaries ………………………… $ 56,000*
Cash receipts from customers
Sales revenue …………………………………………….. $175,000*
*EXERCISE 17-14
INTERNATIONAL COMPANY
Worksheet
Statement of Cash Flows
For the Year Ended December 31, 2017
Balance
12/31/16
Reconciling Items
Balance
12/31/17
Balance Sheet Accounts
Debit
Credit
Debits
Cash
Accounts receivable
Inventory
22,000
76,000
189,000
(k) 51,000
(a) 9,000
(b) 9,000
73,000
85,000
180,000
Credits
Accumulated depreciation—equipment
Accounts payable
Bonds payable
42,000
47,000
200,000
(c) 13,000
(h) 50,000
(d) 24,000
66,000
34,000
150,000
Statement of Cash Flow Effects
486,000
486,000
Operating activities
Net income
Increase in accounts receivable
Decrease in inventory
Sale of land
Purchase of equipment
Financing activities
Payment of dividends
Redemption of bonds
(j) 135,000
(b) 9,000
(e) 25,000
(a) 9,000
(f) 50,000
(g) 70,000
(h) 50,000
SOLUTIONS TO PROBLEMS
PROBLEM 17-1A
Transaction
SCF Activity
Affected
Cash Inflow, Outflow,
or No Effect?
(a)
Recorded depreciation
expense on the plant assets.
O
No cash flow effect
(b)
Recorded and paid interest
O
Cash outflow
(c)
Recorded cash proceeds from
(d)
Acquired land by issuing
No cash flow effect
common stock.
(e)
Paid a cash dividend to preferred
stockholders.
F
Cash outflow
(f)
Paid a cash dividend
to common stockholders.
F
Cash outflow
PROBLEM 17-2A
(a) Net income can be determined by analyzing
the retained earnings account.
Retained earnings beginning of year …………………….. $250,000
Add: Net income (plug) ………………………………………… 75,500*
325,500
(b) Cash inflow from the issue of stock was $19,500 ($170,000 – $140,000 –
$10,500).
Common Stock
140,000
Stock Dividend
170,000
(c) Both of the above activities (issue of common stock and payment of
PROBLEM 17-3A
WHITLOCK COMPANY
Partial Statement of Cash Flows
For the Year Ended November 30, 2017
Cash flows from operating activities
Net income …………………………………………………. $1,650,000
Adjustments to reconcile net income
to net cash provided by operating activities
activities
Depreciation expense ……………………….. $ 70,000
Increase in accounts receivable ……….. (200,000)
*PROBLEM 17-4A
WHITLOCK COMPANY
Partial Statement of Cash Flows
For the Year Ended November 30, 2017
Cash flows from operating activities
Cash receipts from customers …….. $7,500,000 (1)
Less cash payments:
To suppliers …………………………. $4,740,000 (2)
Computations:
(1) Cash receipts from customers
Sales revenue …………………………………………… $7,700,000
Deduct: Increase in accounts receivable …… 200,000
Cash receipts from customers …………………… $7,500,000
(2) Cash payments to suppliers
Cost of goods sold ……………………………………. $4,900,000
(3) Cash payments for operating expenses
Operating expenses, exclusive
of depreciation ………………………… $1,080,000*
Add: Increase in prepaid
PROBLEM 17-5A
ZUMBRUNN COMPANY
Partial Statement of Cash Flows
For the Year Ended December 31, 2017
Cash flows from operating activities
Net income …………………………………………………. $230,000
Adjustments to reconcile net income
to net cash provided by operating activities
*PROBLEM 17-6A
ZUMBRUNN COMPANY
Partial Statement of Cash Flows
For the Year Ended December 31, 2017
Cash flows from operating activities
Cash receipts from customers ……… $960,000 (1)
Less cash payments:
(1) Computation of cash receipts from customers
Service revenue ………………………………………………. $970,000
Deduct: Increase in accounts receivable
(2) Computation of cash payments for operating expenses
Operating expenses per income statement ……….. $624,000
Deduct: Increase in accounts payable
(3) Computation of cash payments for income taxes
Income tax expense per income statement ……….. $ 40,000
PROBLEM 17-7A
(a) NOSKER COMPANY
Statement of Cash Flows
For the Year Ended December 31, 2017
Cash flows from operating activities
Net income ………………………………………………… $32,000
Adjustments to reconcile net income
to net cash provided by operating activities
Cash flows from investing activities
Sale of equipment ………………………………………. 8,500
Cash flows from financing activities
Issuance of common stock …………………………. 4,000
Net cash used by financing activities ……….. (22,000)
Net increase in cash ………………………………………… 18,000
Cash at beginning of period …………………………….. 20,000
*PROBLEM 17-8A
(a) NOSKER COMPANY
Statement of Cash Flows
For the Year Ended December 31, 2017
Cash flows from operating activities
Cash receipts from customers …… $226,000 (1)
Less cash payments:
To suppliers ………………………. $173,000 (2)
For operating expenses ……… 9,500 (3)
Cash flows from investing activities
Sale of equipment …………………….. 8,500
Cash flows from financing activities
Issuance of common stock ……….. 4,000
Redemption of bonds ……………….. (6,000)
Net increase in cash ………………………… 18,000
Cash at beginning of period …………….. 20,000
Cash at end of period ………………………. $ 38,000
Computations:
(1) Cash receipts from customers
Sales revenue …………………………………………. $242,000
*PROBLEM 17-8A (Continued)
(2) Cash payments to suppliers
Cost of goods sold ……………………………………….. $175,000
Add: Increase in inventory ……………………………. 7,000
(3) Cash payments for operating expenses
Operating expenses ……………………………………… $ 24,000
Deduct: Depreciation ……………………………………. 14,500
(4) Cash payments for income taxes
Income tax expense ………………………………………. $ 8,000
Add: Decrease in income taxes payable …………. 1,000
PROBLEM 17-9A
CHENG INC.
Statement of Cash Flows
For the Year Ended December 31, 2017
Cash flows from operating activities
Net income ………………………………………………… $158,900
Adjustments to reconcile net income
to net cash provided by operating activities
Depreciation expense ………………………….. $46,500
Loss on disposal of plant assets ………….. 7,500
Cash flows from investing activities
Sale of plant assets ……………………………………. 1,500
Purchase of investments ……………………………. (29,000)
Cash flows from financing activities
Issuance of common stock …………………………. 45,000
Net increase in cash ………………………………………….. 32,400
*PROBLEM 17-10A
CHENG INC.
Statement of Cash Flows
For the Year Ended December 31, 2017
Cash flows from operating activities
Cash receipts from customers………….. $332,980 (1)
Less cash payments:
To suppliers ……………………………… $105,410 (2)
For income taxes ………………………. 27,280
Cash flows from investing activities
Sale of plant assets …………………………. 1,500
Purchase of investments………………….. (29,000)
Cash flows from financing activities
Issuance of common stock ………………. 45,000
Redemption of bonds ………………………. (40,000)
Net increase in cash …………………………..…… 32,400
Cash at beginning of period ……………………. 48,400
Cash at end of period ……………………………… $ 80,800
Computations:
(1) Cash receipts from customers
Sales revenue …………………………... $392,780
*PROBLEM 17-10A (Continued)
(2) Cash payments to suppliers
Cost of goods sold ………………………………………… $135,460
Add: Increase in inventory …………………………….. 14,650
(3) Cash payments for operating expenses
Operating expenses exclusive of
depreciation……………………………………… $ 12,410
PROBLEM 17-11A
ROTHLISBERGER COMPANY
Statement of Cash Flows
For the Year Ended December 31, 2017
Cash flows from operating activities
Net income ………………………………………………….. $ 42,000
Adjustments to reconcile net income
to net cash provided by operating activities
Depreciation expense ……………………………. $42,000
Loss on disposal of equipment ………………. 4,000*
Decrease in accounts receivable ……………. 21,000
Cash flows from investing activities
Sale of land ………………………………………………….. 25,000
Sale of equipment ………………………………………… 6,000
Purchase of equipment …………………………..……. (88,000)
Net cash used by investing activities ……… (57,000)
Noncash investing and financing activities
Conversion of bonds by issuance
of common stock …………………………………… $ 40,000