Exercise 21–7
Bond
interest Bond interest Unamortized Cash paid
Situation expense payable discount for interest
increase increase
(decrease) (decrease)
1 10 0 0 10
1. Summary Entry Bond interest expense 10
21–22 Intermediate Accounting, 8/e
Exercise 21–7 (concluded)
Bond
interest Bond interest Unamortized Cash paid
Situation expense payable discount for interest
increase increase
(decrease) (decrease)
5. Summary Entry Bond interest expense 10
6 10 (2) (3) 9
6. Summary Entry Bond interest expense 10
Exercise 21–8
Bond
interest Bond interest Unamortized Cash paid
Situation expense payable discount for interest
1. Summary Entry Bond interest expense 20
2 20 4 0 16
2. Summary Entry Bond interest expense 20
3. Summary Entry Bond interest expense 20
4 20 (4) (6) 18
4. Summary Entry Bond interest expense 20
Exercise 21–9
Income Deferred
tax Income tax tax Cash paid
Situation expense payable liability for taxes
increase increase
(decrease) (decrease)
1 10 0 0 10
1. Summary Entry Income tax expense 10
2. Summary Entry Income tax expense 10
3. Summary Entry Income tax expense 10
4. Summary Entry Income tax expense 10
5. Summary Entry Income tax expense 10
Exercise 21–9 (concluded)
Income Deferred
6. Summary Entry Income tax expense 10
Income tax payable 3
8 10 (3) (2) 15
8. Summary Entry Income tax expense 10
9 10 (3) 2 11
9. Summary Entry Income tax expense 10
21–26 Intermediate Accounting, 8/e
Exercise 21–10
Income Deferred
tax Income tax tax Cash paid
Situation expense payable liability for taxes
increase (decrease) increase (decrease)
1 10 0 0 10
1. Summary Entry Income tax expense 10
2. Summary Entry Income tax expense 10
3. Summary Entry Income tax expense 10
4. Summary Entry Income tax expense 10
Income tax payable 3
Exercise 21–11
Most would report the cash inflow of $566,589,440 from the sale of the bonds as a
cash inflow from financing activities in its statement of cash flows.
The $64,000,000 cash interest paid ($32,000,000* + 32,000,000**) is a cash outflow
Exercise 21–12
National would report the cash inflow of $4 million from the borrowing as a cash
inflow from financing activities in its statement of cash flows.
Exercise 21–13
Requirement 1
Cash Flows from Investing Activities:
Proceeds from sale of land $ 12
21–30 Intermediate Accounting, 8/e
Exercise 21–14
Requirement 1
Cash Flows from Investing Activities:
Proceeds from sale of equipment $ 8
Exercise 21–15
Wilson would report the $3,000,000* investment in the commercial food
processor and its financing with a capital lease as a significant noncash
investing and financing activity in the disclosure notes to the financial
Exercise 21–15 (concluded)
Calculations:
September 30, 2016*
Leased equipment (calculated below) ..................... 3,000,000
Lease payable (calculated below) ....................... 3,000,000
Exercise 21–16
Investing Activities:
Beilich would report the $600 million investment as a cash outflow among investing
21–34 Intermediate Accounting, 8/e
Exercise 21–17
RECONCILIATION OF NET INCOME TO
NET CASH FLOWS FROM OPERATING ACTIVITIES
Net income $50,000
Adjustments for noncash effects:
Depreciation expense 7,000
Exercise 21–18
($ in millions)
Net income closed to retained earnings
Income summary .................................................................................... 75
Cash dividend
Retained earnings (given) .................................................... 25
Stock dividend
Retained earnings (given) .................................................... 16
Property dividend
Retained earnings (given) .................................................... 12
Exercise 21–18 (concluded)
Sale of treasury shares
Exercise 21–19
Income Statement
Sales $600a
Cost of goods sold 360b
Salaries expense 78c
a Summary Entry Cash (received from customers) 612
b Summary Entry Cost of goods sold 360
c Summary Entry Salaries expense 78
d Summary Entry Insurance expense 42
21–38 Intermediate Accounting, 8/e
Exercise 21–20
RECONCILIATION OF NET INCOME TO
NET CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 26
Adjustments for noncash effects:
Depreciation expense 11
Changes in operating assets and liabilities:
Increase in accounts receivable (54)
Exercise 21–21
Requirement 1:
a. Summary Entry Cash (received from customers) 311
Accounts receivable 6
Sales revenue 305
Requirement 2:
Cash Flows from Operating Activities:
Cash received from customers $311
21–40 Intermediate Accounting, 8/e
Exercise 21–22
RECONCILIATION OF NET INCOME TO
NET CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (5,000)
Adjustments for noncash effects:
