E23-12B (20–30 minutes)
FULTON CORP.
Statement of Cash Flows
For the Year Ended December 31, 2014
(Direct Method)
Cash flows from operating activities
Cash collections from customers* …………………….
$15,050
Less: Cash paid for merchandise**……………………
Cash paid for income taxes ……………………..
Cash flows from investing activities
Sale of investments [$200 – $50] ………………………..
150
Purchase of plant assets
[($1,600 – $1,200) – $100] …………………………………..
(300)
Net cash used by investing activities ………………….
(150)
Cash flows from financing activities
Retirement of bonds payable ……………………………..
Payment of cash dividends ………………………………..
Net cash used by financing activities ………………….
(800)
Net increase in cash …………………………………………………..
Cash, January 1, 2014 ………………………………………………..
600
Cash, December 31, 2014……………………………………………
Noncash investing and financing activities
Issuance of common stock for land …………………….
$100
*$15,200 + $2,100 – $2,250
***($1,205 – $145) + $520 – $330
E23-13B (30–40 minutes)
JACKSON SKI HAUS
Statement of Cash Flows
For the Year Ended December 31, 2014
Cash flows from operating activities
Cash received from customers …………………….
Less:
Cash paid to suppliers …………………………………
Cash paid for operating expenses ………………..
Cash paid for interest …………………………………..
Cash paid for taxes ……………………………………..
Cash flows from investing activities
Sale of equipment ……………………………………….
16,000
Purchase of equipment ………………………………..
(71,000)
Sale of available-for-sale investments …………..
25,000
Net cash used by investing activities ……………
Cash flows from financing activities
Proceeds on short-term loan ………………………..
23,500
Principal payment on long-term loan …………….
Dividend payments ……………………………………..
Net cash used by financing activities ……………
Net increase in cash ……………………………………………..
Cash, January 1, 2014 …………………………………………..
E23-13B (Continued)
bCost of goods sold ……………………………………………….
$302,000
– Increase in accounts payable ………………………………
(17,200)
37,000
$321,800
$94,000
– Decrease in prepaid insurance …………………………..…
(2,000)
– Depreciation expense
$23,000 – [$18,000 – ($25,000 X .20)] …………………
(10,500)
– Amortization of trademarks ………………………………….
(4,000)
+ Decrease in wages payable ………………………………….
5,000
Cash paid operating expenses ………………………………..
$82,500
dTax expense …………………………………………………………
$40,500
– Increase in income taxes payable …………………………
Cash paid for taxes ………………………………………………..
$34,400
E23-14B (30–40 minutes)
JACKSON SKI HAUS
Statement of Cash Flows
For the Year Ended December 31, 2014
Cash flows from operating activities
Net income ……………………………………………………
$79,200
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation expense …………………………….
$10,500*
Amortization of copyright ……………………….
Loss on sale of equipment ……………………..
Increase in inventories …………………………...
(37,000)
Decrease in prepaid insurance ………………..
Increase in income taxes payable ……………
Increase in accounts payable ………………….
Decrease in wages payable …………………….
Net cash provided by operating activities ..
Cash flows from investing activities
Sale of equipment …………………………………………
16,000
Purchase of equipment ………………………………….
(71,000)
Sale of available-for-sale investments …………….
25,000
Net cash used by investing activities ……………..
(30,000)
Cash flows from financing activities
Proceeds on short-term loan ………………………….
23,500
Principal payment on long-term loan ………………
(50,000)
Dividend payments ……………………………………….
Net cash used by financing activities ……………..
(46,500)
Net increase in cash ………………………………………………
Cash, January 1, 2014 ……………………………………………
Cash, December 31, 2014……………………………………….
$ 2,500
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest
Income taxes
E23-15B (25–35 minutes)
NATURAL HOMES COMPANY
Statement of Cash Flows
For the Year Ended December 31, 2014
Cash flows from operating activities
Net income* ……………………………………………………..
$47,000
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation expense ………………………………..
Gain on sale of investments ……………………….
Gain on sale of plant assets ……………………….
Decrease in current liabilities……………………..
Net cash provided by operating activities …………..
Cash flows from investing activities
Sale of plant assets ………………………………………….
2,000
Sale of investments ………………………………………….
30,000
Purchase of investments …………………………………..
(35,000)
Purchase of plant assets** ………………………………..
Net cash used by investing activities …………………
Cash flows from financing activities
Proceeds from issuance of common stock …………
20,000
Payment of bonds payable ………………………………..
(50,000)
Payment of dividends ……………………………………….
Net cash used by financing activities …………………
(50,000)
Net increase in cash ………………………………………………….
Cash balance, January 1, 2014 …………………………………..
Cash balance, December 31, 2014 ……………………………..
$15,000
*Net income $40,000 + $5,000 + $2,000 = $47,000
**Purchase of plant assets)\
Plant assets, December 31, 2013 ……………………..
$351,000
Less: Plant assets sold …………………………………..
(57,000)
294,000
Plant assets, December 31, 2014 ……………………..
E23-16B (20–25 minutes)
(a) Computation of net cash provided by operating activities:
Net income ($83,000 + $7,000) – $72,500 ……………
$17,500
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation expense ($45,000 – $36,000) ….
$ 9,000*
Gain on sale of land
($31,500 – $20,000) …………………………..…..
(11,500)
Decrease in accounts receivable
Decrease in prepaid expenses
($12,000 – $9,000) …………………………………
Decrease in accounts payable
Increase in accrued expenses
Net cash provided by operating activities ………….
(b)
Computation of net cash provided by investing activities:
Sale of land …………………………..…………………………
$31,500
Net cash provided by investing activities …………..
$27,500
Purchase of equipment
(c)
Computation of net cash provided by financing
activities:
Cash dividends paid …………………………………………
$ (7,000)
Payment of notes payable…………………………………
Issuance of bonds payable ……………………………….
E23-17B (30–40 minutes)
(a) RYAN INC.
Statement of Cash Flows
For the Year Ended December 31, 2014
Cash flows from operating activities
Net income ………………………………………………..
$49,600
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation expense …………………………
21,800
Net cash provided by operating activities ……
71,400
Purchase of land …………………………..…………..
Net cash used by investing activities ………….
Cash flows from financing activities
Payment of dividends ………………………………..
Payment of notes payable ………………………….
Issuance of capital stock …………………………...
Net cash used by financing activities ………….
Net increase in cash …………………………..……………….
Cash, January 1, 2014 …………………………………………
Cash, December 31, 2014 ……………………………………
$31,600
Noncash investing and financing activities
Issuance of bonds for land …………………………
$50,000
E23-17B (Continued)
(b) RYAN INC.
Balance Sheet
December 31, 2014
Assets
Equities
Cash
$ 31,600
Current liabilities
$ 87,600
Current assets
other than cash
Bonds payable
Investments
Preferred stock
Plant assets (net)
*
Capital stock
Land
54,000
Retained earnings
86,100
*$119,500 + $50,000 – 21,800
***$49,000 + $49,600 – $12,500
E23-18B (25–30 minutes)
HARVEY COMPANY
Statement of Cash Flows (partial)
For the Year Ended December 31, 2014
Cash flows from operating activities
Net income ……………………………………………………
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation expense …………………………….
$ 82,500
Net cash provided by operating activities ……….
Cash flows from investing activities
Purchase of machinery …………………………………
(156,000)
Sale of machinery
[($202,000 – $60,000) + $36,600] …………………
Extraordinary repairs on machinery ………………
(56,000)
Net cash used by investing activities ……………..
Cash flows from financing activities
Payment of cash dividends …………………………...
Increase in cash ……………………………………………………
Cash, January 1, 2014 …………………………………………..
Cash, December 31, 2014 ………………………………………
E23-19B (20–25 minutes)
Retained Earnings …………………………..…………………….
40,000
Financing—Cash Dividends …………………………..
40,000
Operating—Net Income ………………………………………….
82,600
Retained Earnings …………………………………………
82,600
Operating—Depreciation Expense ………………………….
82,500
Accumulated Depreciation—Machinery ………….
82,500
Machinery …………………………………………………………….
Investing—Purchase of Machinery …………………
Accumulated Depreciation—Machinery ………………….
56,000
Investing—Extraordinary Repairs to Machinery …
Accumulated Depreciation—Machinery ………………….
60,000
Investing—Sale of Machinery …………………………………
Machinery …………………………………………………….
Operating—Gain on Sale of Equipment …………..
36,600
E23-20B (20–25 minutes)
1.
Bonds Payable ……………………………………………….
500,000
Common Stock ………………………………………
100,000
Additional Paid-in Capital ……………………….
400,000
(Noncash financing activity)
2.
Operating—Net Income …………………………………..
Retained Earnings ………………………………….
3.
Operating—Depreciation Expense …………………..
Accumulated Depreciation ……………………..
491,000
4.
Accumulated Depreciation ……………………………..
45,000
Equipment …………………………..…………………………
63,000
Operating—Gain on Exchange of
Equipment ………………………………………….
18,000
Delivery Vehicles ……………………………………
Investing—Purchase of Equipment …………
40,000
5.
Retained Earnings ………………………………………….
Cash Dividend Payable …………………………………..
Financing—Payment of Dividends …………..
E23-21B (45–55 minutes)
UNOBOC INDUSTRIES
Worksheet for Preparation of Statement of Cash Flows
For the Year Ended December 31, 2014
Acct.
Bal. at
end of
2013
Reconciling Trans-
Acct. Bal.
at end of
2014
actions during 2014
Debits
Debit
Credit
Cash
$ 11,000
(16)
$ 1,500
$ 9,500
Short-term
investments
50,000
(2)
15,000
35,000
Accounts receivable
80,000
(3)
Inventories
41,000
(4)
$20,800
Prepaid insurance
(5)
2,000
Land
20,000
(10)
Buildings
Equipment
35,000
(11)
63,000
Trademarks
(12)
25,000
Credits
Accounts payable
$ 36,000
(6)
$10,500
$ 46,500
Short-term notes
payable
10,000
(7)
5,000
15,000
Accrued payables
10,000
(8)
5,000
5,000
Allowance for doubtful
accounts
(3)
Accum. depr.—bldg.
15,000
(13)
Accum. depr.—equip.
11,100
(13)
11,900
Mortgage payable
70,000
(14)
65,000
Capital stock
58,000
(15)
Addtl. paid-in capital
(15)
22,000
E23-21B (Continued)
Statement of Cash Flows Effects:
Operating activities
Net income
(1)
47,900
Depreciation
(13)
16,900
Dec. in accounts
receivable (net)
(3)
Inc. in inventories
(4)
20,800
Dec. in prepaid expenses
(5)
Inc. in accounts payable
(6)
10,500
Dec. in notes payable
(7)
Dec. in accrued payables
(8)
Investing activities
Sale of investments
(2)
15,000
Purchase of land
(10)
20,000
Purchase of equipment
(11)
28,000
Purchase of trademarks
(12)
25,000
Financing activities
Payment of cash dividends
(9)
30,000
Payment of mortgage
(14)
Sale of stock
(15)
Totals
Decrease in cash
(16)