General Instructions
1. The following worksheet may be used to complete the exercise/problem.
You may need to refer to your textbook for additional information.
3. The completed exercise/problem may be printed or e-mailed per direction from your instructor.
P12-9A
Cash 155,000$
Accounts receivable 140,000
Total current assets 295,000$
Land 100,000$
Plant and equipment 700,000
Common stock 500,000$
Retained earnings 120,000
Total stockholders’ equity 620,000$
Total liabilities and stockholders’ equity 1,045,000$
Required
(Enter amounts in thousands of dollars)
on account.
i. The amount of current liabilities decreased by $20,000 during the year.
d. An additional $50,000 of common stock was issued for cash.
e. Bonds payable of $100,000 were purchased for cash and retired at no gain or loss.
f. Cash purchases of plant and equipment during the year were $60,000.
g. An additional $200,000 of land was acquired in exchange for a long-term note payable.
h. During the year, sales exceeded cash collections on account by $15,000. All sales are
1. Prepare a statement of cash flows for 2016 using the indirect method in the Operating
Activities section. Include a supplemental schedule for noncash activities.
POODLE COMPANY
c. Cash dividends of $40,000 were declared and paid.
The balance sheet of Poodle Company at the end of 2015 is presented here, along with certain
other information for 2016:
December 31, 2015
Other information is as follows:
a. Net income for 2016 was $50,000.
b. Included in operating expenses was $25,000 in depreciation.
2. The blue cells are for data entry. Enter text in the T cells, formulas in the F cells, and
dollars or numbers in the $ cells.
Cash Flows from Operating Activities
Net income 50$
Adjustments to reconcile net income to net
Cash Flows from Investing Activities
Acquisitions of plant and equipment (60)$
Cash Flows from Financing Activities
Payment of cash dividends (40)$
Retirement of bonds (100)
Acquisition of land in exchange for note 200$
(Enter amounts in thousands of dollars)
Cash 45$
Accounts receivable 155
DECEMBER 31, 2016
(IN THOUSANDS OF DOLLARS)
FOR THE YEAR ENDED DECEMBER 31, 2016
(IN THOUSANDS OF DOLLARS)
Schedule of Noncash Investing and Financing
2. Prepare a balance sheet at December 31, 2016.
POODLE COMPANY
BALANCE SHEET
STATEMENT OF CASH FLOWS
Long-term note payable 200$
responsible for the large decrease in the company’s cash balance at the end of the year.
3. What primary uses did Poodle make of the cash it generated from operating
activities?
Poodle’s cash from operations of $40,000 was insufficient to cover its acquisitions of new plant
Bannack Corp. is in the process of preparing its statement of cash flows for the year ended June 30, 2016.
An income statement for the year and comparative balance sheets are as follows:
For the Year Ended
June 30, 2016
June 30
2. Evaluate the following statement: Whether a company uses the direct or indirect method to report
cash flows from operations is irrelevant because the amount of cash flow from operating activities
is the same regardless of which method is used.
1. Prepare a statement of cash flows for 2016 using the direct method in the Operating Activities section.
BANNACK CORP.
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2016
It is true that the amount of cash flow from operating activities is the same regardless of which method (direct or
General Instructions
1. The following worksheet may be used to complete the exercise/problem.
You may need to refer to your textbook for additional information.
3. The completed exercise/problem may be printed or e-mailed per direction from your instructor.
P12-11
Sales revenue 550,000$
Net income 33,000$
2016 2015
Cash 31,000$ 40,000$
Accounts receivable 90,000 75,000
Income taxes payable 8,000 10,000
Total current liabilities 195,000$ 184,000$
Long-term bank loan payable 100,000$ 130,000$
Common stock 350,000$ 200,000$
Retained earnings 258,000 232,000
Total stockholders’ equity 608,000$ 432,000$
Total liabilities and stockholders’ equity 903,000$ 746,000$
Glendive Corp. is in the process of preparing its statement of cash flows for the year ended June 30,
2016. An income statement for the year and comparative balance sheets are as follows:
For the Year
Ended June 30,
2016
June 30
Required
Cash Flows from Operating Activities
Cash collections from customers 535,000$
Cash payments for:
Inventory (328,000)
FOR THE YEAR ENDED JUNE 30, 2016
2. Evaluate the following statement: Whether a company uses the direct or indirect method to
report cash flows from operations is irrelevant because the amount of cash flow from operating
activities is the same regardless of which method is used.
It is true that the amount of cash flow from operating activities is the same regardless of which method
The original cost of the assets sold was $45,000, and their book value was $30,000. Additional stock was issued
for cash, and a portion of the bank loan was repaid.
1. Prepare a statement of cash flows for 2016 using the direct method in the Operating Activities
section.
GLENDIVE CORP.
STATEMENT OF CASH FLOWS
Dividends of $7,000 were declared and paid during the year. New plant assets were purchased during the year for
$195,000 in cash. Also, land was purchased for cash. Plant assets were sold during the year for $25,000 in cash.
General Instructions
1. The following worksheet may be used to complete the exercise/problem.
You may need to refer to your textbook for additional information.
3. The completed exercise/problem may be printed or e-mailed per direction from your instructor.
P12-12A
Sales revenue 400,000$
Cost of goods sold 240,000
2016 2015
Cash 25,000$ 40,000$
Accounts receivable 80,000 69,000
Inventory 75,000 50,000
Prepaid rent 2,000 18,000
Total current assets 182,000$ 177,000$
Land 60,000$ 150,000$
Bannack Corp. is in the process of preparing its statement of cash flows for the year ended June 30,
2016. An income statement for the year and comparative balance sheets are as follows:
For the Year Ended June
30, 2016
June 30
Common stock 100,000$ 100,000$
Retained earnings 132,000 127,000
Total stockholders’ equity 232,000$ 227,000$
Total liabilities and stockholders’ equity 507,000$ 577,000$
Required
Cash Flows from Operating Activities
Net income 10,000$
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation expense 80,000$
Cash Flow from Investing Activities
Sale of land 90,000$
Purchase of plant and equipment (125,000)
Sale of plant and equipment 20,000
Net cash used by investing activities (15,000)$
Cash Flow from Financing Activities
Repayment of long-term loan (75,000)$
FOR THE YEAR ENDED JUNE 30, 2016
2. Evaluate the following statement: Whether a company uses the direct or indirect method to
1. Prepare a statement of cash flows for 2016 using the indirect method in the Operating Activities
section.
BANNACK CORP.
STATEMENT OF CASH FLOWS
report cash flows from operations is irrelevant because the amount of cash flow from operating
activities is the same regardless of which method is used.
It is true that the amount of cash flow from operating activities is the same regardless of which method (direct
of cash flows. The direct method shows the actual inflows and outflows of cash, while the indirect method
arrives at the same amount by reconciling net income to cash flow from operating activities.
or indirect) is used. The two methods, however, differ in the information reported to the reader of the statement
General Instructions
1. The following worksheet may be used to complete the exercise/problem.
You may need to refer to your textbook for additional information.
3. The completed exercise/problem may be printed or e-mailed per direction from your instructor.
P12-12
Sales revenue 550,000$
Cost of goods sold 350,000
2016 2015
Cash 31,000$ 40,000$
Accounts receivable 90,000 75,000
Inventory 80,000 95,000
Prepaid rent 12,000 16,000
Total current assets 213,000$ 226,000$
Land 250,000$ 170,000$
Glendive Corp. is in the process of preparing its statement of cash flows for the year ended June 30,
2016. An income statement for the year and comparative balance sheets are as follows:
For the Year Ended June
30, 2016
June 30
Common stock 350,000$ 200,000$
Retained earnings 258,000 232,000
Total stockholders’ equity 608,000$ 432,000$
Total liabilities and stockholders’ equity 903,000$ 746,000$
Required
Increase in other accrued liabilities 6,000
Decrease in income taxes payable (2,000)
Net cash provided by operating activities 128,000$
Cash Flow from Investing Activities
Sale of plant assets 25,000$
Acquisition of land (80,000)
FOR THE YEAR ENDED JUNE 30, 2016
1. Prepare a statement of cash flows for 2016 using the indirect method in the Operating Activities
section.
GLENDIVE CORP.
STATEMENT OF CASH FLOWS
2. Evaluate the following statement: Whether a company uses the direct or indirect method to
report cash flows from operations is irrelevant because the amount of cash flow from operating
activities is the same regardless of which method is used.
It is true that the amount of cash flow from operating activities is the same regardless of which method (direct
of cash flows. The direct method shows the actual inflows and outflows of cash, while the indirect method
arrives at the same amount by reconciling net income to cash flow from operating activities.
or indirect) is used. The two methods, however, differ in the information reported to the reader of the statement
General Instructions
1. The following worksheet may be used to complete the exercise/problem.
You may need to refer to your textbook for additional information.
3. The completed exercise/problem may be printed or e-mailed per direction from your instructor.
P12-13
2016 2015
Assets:
Current assets:
Cash 60$ 100$
U.S. Treasury bills (six-month) – 50
Accounts receivable 610 500
Inventory 720 600
Liabilities and Owners’ Equity
Current liabilities:
Accounts payable 360$ 300$
Taxes payable 25 20
(thousands omitted)
June 30
Lang Company has not yet prepared a formal statement of cash flows for 2016. Following
are comparative balance sheets as of December 31, 2016 and 2015, and a statement of
income and retained earnings for the year ended December 31, 2016:
Lang Company
Balance Sheet
December 31
Total liabilities and owners’ equity 2,105$ 1,930$
Sales $2,408
Less expenses and interest:
Cost of goods sold 1,100$
Salaries and benefits 850
Heat, light, and power 75
Depreciation 60
Property taxes 18
Required
If not, how should they be classified? Explain your answers.
(Enter amounts in thousands of dollars)
LANG COMPANY
STATEMENT OF CASH FLOWS
1. For purposes of a statement of cash flows, are the U.S. Treasury bills cash equivalents?
2. Prepare a statement of cash flows for 2016 using the direct method in the Operating Activities
section.
Lang Company
Statement of Income and Retained Earnings
For the Year Ended December 31, 2016
(thousands omitted)
Salaries and benefits (850)
Heat, light, and power (75)
Property taxes (18)
Miscellaneous expense (10)