ACC/560 ACC560 ACC 560 WEEK 9 HOMEWORK
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- 06 Sep 2017
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ACC 560 WEEK 9 HOMEWORK
- Week 9 Chapter 13: Exercises 4, 6, and 7; Problem 1
E13-4 Gutierrez Company reported net income of $225,000 for 2017. Gutierrez also reported depreciation expense of $45,000 and a loss of $5,000 on the disposal of equipment. The comparative balance sheet shows a decrease in accounts receivable of $15,000 for the year, a $17,000 increase in accounts payable, and a $4,000 decrease in prepaid expenses.
Instructions
Prepare the operating activities section of the statement of cash flows for 2017. Use the indirect method.
E13-6 The three accounts shown below appear in the general ledger of Herrick Corp. during 2017.
Equipment
Date Debit Credit Balance
Jan. 1 Balance 160,000
July 31 Purchase of equipment 70,000 230,000
Sept. 2 Cost of equipment constructed 53,000 283,000
Nov. 10 Cost of equipment sold 49,000 234,000
Accumulated Depreciation—Equipment
Date Debit Credit Balance
Jan. 1 Balance 71,000
Nov. 10 Accumulated depreciation on equipment sold 30,000 41,000
Dec. 31 Depreciation for year 28,000 69,000
Retained Earnings
Date Debit Credit Balance
Jan. 1 Balance 105,000
Aug. 23 Dividends (cash) 14,000 91,000
Dec. 31 Net income 77,000 168,000
Instructions
From the postings in the accounts, indicate how the information is reported on a statement of cash flows using the indirect method. The loss on disposal of equipment was $7,000. (Hint: Cost of equipment constructed is reported in the investing activities section as a decrease in cash of $53,000.)
E13-7 Rojas Corporation's comparative balance sheets are presented below.
ROJAS CORPORATION
Comparative Balance Sheets
December 31
2017 2016
Cash $14,300 $10,700
Accounts receivable 21,200 23,400
Land 20,000 26,000
Buildings 70,000 70,000
Accumulated depreciation—buildings (15,000) (10,000)
________ _________
Total $110,500 $120,100
Accounts payable $12,370 $31,100
Common stock 75,000 69,000
Retained earnings 23,130 20,000
_________ _________
Total $110,500 $120,100
Additional information:
- Net income was $22,630. Dividends declared and paid were $19,500
- No noncash investing and financing activities occurred during 2017.
- The land was sold for cash of $4,900.
Instructions
- Prepare a statement of cash flows for 2017 using the indirect method.
P13-1A You are provided with the following transactions that took place during a recent fiscal year.
Transaction Statement of Cash Inflow,
Cash Flow Outflow,or
Activity Affected No Effect?
(a) Recorded depreciation expense on the plant assets.
(b) Recorded and paid interest expense.
(c) Recorded cash proceeds from a disposal of plant assets.
(d) Acquired land by issuing common stock.
(e) Paid a cash dividend to preferred stockholders.
(f) Paid a cash dividend to common stockholders.
(g) Recorded cash sales.
(h) Recorded sales on account.
(i) Purchased inventory for cash.
(j) Purchased inventory on account.
Instructions
Complete the table indicating whether each item (1) affects operating (O) activities, investing (I) activities, financing (F) activities, or is a noncash (NC) transaction reported in a separate schedule, and (2) represents a cash inflow or cash outflow or has no cash flow effect. Assume use of the indirect approach.
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