ACC/305 ACC305 ACC 305 WEEK 8 HOMEWORK

ACC 305 WEEK 8 HOMEWORK

Brief Exercise 23-4

Bloom Corporation had the following 2014 income statement.

The following accounts increased during 2014: Accounts Receivable $13,290; Inventory $11,280; Accounts Payable $14,590. Prepare the cash flows from operating activities section of Bloom’s 2014 statement of cash flows using the direct method.

 

 

Brief Exercise 23-5

Bloom Corporation had the following 2014 income statement.

The following accounts increased during 2014: Accounts Receivable $14,500; Inventory $11,000; Accounts Payable $13,940. Prepare the cash flows from operating activities section of Bloom’s 2014 statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Brief Exercise 23-10

Hendrickson Corporation reported net income of $52,730 in 2014. Depreciation expense was $16,200. The following working capital accounts changed.

Compute net cash provided by operating activities. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Exercise 23-7

Presented below are two independent situations.

Situation A:
Annie Lennox Co. reports revenues of $198,290 and operating expenses of $109,090 in its first year of operations, 2014. Accounts receivable and accounts payable at year-end were $81,530 and $36,290, respectively. Assume that the accounts payable related to operating expenses. Ignore income taxes.

Using the direct method, compute net cash provided (used) by operating activities. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Situation B:
The income statement for Blues Traveler Company shows cost of goods sold $308,190 and operating expenses (exclusive of depreciation) $229,610. The comparative balance sheet for the year shows that inventory increased $20,210, prepaid expenses decreased $8,350, accounts payable (related to merchandise) decreased $16,570, and accrued expenses payable increased $12,580.

Compute (a) cash payments to suppliers and (b) cash payments for operating expenses.

 

Exercise 23-9

Los Lobos Corp. uses the direct method to prepare its statement of cash flows. Relevant balances for Los Lobos at December 31, 2014 and 2013, are as follows.

Additional information:

1.		Los Lobos purchased $7,650 in equipment during 2014.
2.		Los Lobos allocated one-third of its depreciation expense to selling expenses and the remainder to general and administrative expenses.
3.		Bad debt expense for 2014 was $4,820, and write-offs of uncollectible accounts totaled $4,260.

Determine what amounts Los Lobos should report in its statement of cash flows for the year ended December 31, 2014, for the following items.

 

Exercise 23-11

	Your answer is correct.

Condensed financial data of Pat Metheny Company for 2014 and 2013 are presented below.

Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

 

Problem 23-6

Comparative balance sheet accounts of Marcus Inc. are presented below.

Additional data (ignoring taxes):

Marcus’s 2014 income statement follows (ignoring taxes).

(a) Compute net cash flow from operating activities using the direct method. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

(b) Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

 

IFRS Multiple Choice Question 06

Which of the following is false with regard to IFRS and the statement of cash flows?

All of the above statements are false with regard to IFRS and the statement of cash flows.

 

In certain circumstances under IFRS, bank overdrafts are considered part of cash and cash equivalents.

 

IFRS requires that noncash investing and financing activities be excluded from the statement of cash flows.

 

The IASB is strongly in favor of requiring use of the direct method for operating activities.

 

IFRS Multiple Choice Question 07

Ocean Company follows IFRS for its external financial reporting. Which of the following methods of reporting are acceptable under IFRS for the items shown?

Interest paid

Dividends paid

 

Investing Financing

 

Operating Investing

 

Financing Investing

 

Operating Financing

 

IFRS Multiple Choice Question 08

Ocean Company follows IFRS for its external financial reporting. Which of the following methods of reporting are acceptable under IFRS for the items shown?

Interest received

Dividends received

 

Investing Financing

 

Financing Investing

 

Operating Financing

 

Operating Investing

 

IFRS Multiple Choice Question 09

Wave, Inc. follows IFRS for its external financial reporting. The statement of cash flows reports changes in cash and cash equivalents, which of the following is not considered cash or a cash equivalent under IFRS?

Bank overdrafts.

 

Coin.

 

Commercial paper.

 

Accounts receivable.

 

IFRS Multiple Choice Question 10

Surf Company follows IFRS for its external financial reporting. The following amounts were available at December 31, 2013:

Interest paid		$22,000
Dividends paid		16,000
Taxes paid		37,000

Under IFRS, what is the maximum amount that could be reported for cash used by operating activities for Surf Company for the year ended December 31, 2013?

$53,000

 

$75,000

 

$59,000

 

$38,000