Chapter 13 Appendix A Appendix A: Short Exercises (15 min.) S 13A-1 Req. 1 White Chocolate Inc. Statement of Cash Flows Year Ended December 31, 2011 Cash flows from operating activities: Collections from customers $ 624,000 Payments to suppliers and employees (413,000 ) Net cash provided by operating activities $ 211,000 Cash flows from investing activities: Purchase of equipment $(143,000 ) Net cash used for investing activities (143,000) Cash flows from financing activities: Payment of dividends $ Chapter 13 The Statement of Cash Flows 905
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Chapter 13 Appendix A
Appendix A: Short Exercises
(15 min.) S 13A-1
Req. 1
White Chocolate Inc.Statement of Cash Flows
Year Ended December 31, 2011Cash flows from operating activities:
Collections from customers $ 624,000Payments to suppliers and employees (413,000 )Net cash provided by operating
activities$ 211,000
Cash flows from investing activities:Purchase of equipment $(143,000 )Net cash used for investing activities (143,000)
Cash flows from financing activities:Payment of dividends $ (49,000 )Net cash used for financing activities (49,000 )
Net increase in cash $ 19,000Cash balance, beginning 52,000 Cash balance, ending $ 71,000
Chapter 13 The Statement of Cash Flows 905
(5 min.) S 13A-2
Req. 1
Stella’s Learning CenterStatement of Cash Flows (partial)
Year ended June 30, 2011Cash flows from operating activities:
Collections from customers $196,000Payments to suppliers (110,000)Payments to employees (68,000 )Net cash provided by operating
activities$18,000
Accounting 8/e Solutions Manual906
(15 min.) S 13A-3
Req. 1
Stella’s Learning CenterStatement of Cash Flows Year ended June 30, 2011
Cash flows from operating activities:Receipts:
Collections from customers $196,000 Total cash receipts 196,000
Total cash payments (178,000)Net cash provided by operating
activities $ 18,000
Cash flows from investing activities:Cash receipt from sale of land $ 61,000Purchase of equipment (37,000 )Net cash provided by investing
activities24,000
Cash flows from financing activities:Payment of note payable $ (34,000)Cash receipt from issuance of stock 20,000Payment of dividends (4,000 )Net cash used for financing activities (18,000 )
O+ a. Collection of account F – i. Purchase of treasury stockreceivable
F+ b. Issuance of note payable F + j. Issuance of common stockto borrow cash for cash
N c. Depreciation O– k. Payment of account payable
F+ d. Issuance of preferred NIF l. Acquisition of building bystock for cash issuance of common stock
F– e. Payment of cash I– m. Purchase of equipmentdividend
I + f. Sale of land O– n. Payment of wages toemployees
NIF g. Acquisition of equipment O+ o. Collection of cash interest by issuing note payable
F– h. Payment of note payable I+ p. Sale of building
Chapter 13 The Statement of Cash Flows 909
(5-10 min.) E 13A-6
Req. 1
a. Investing activities g. Operating activities
b. Investing activities h. Financing activities
c. Financing activities i. Financing activities
d. Noncash investing and j. Operating activitiesfinancing activities
e. Operating activities k. Investing activities
f. Financing activities l. Operating activities
(5-10 min.) E 13A-7
Req. 1
1. Payments of salaries and wages Included2. Depreciation Not Included3. Payment of interest Included4. Payment of dividends Not Included5. Collections from customers Included6. Net income Not Included7. Payment of income tax Included8. Collection of dividend revenue Included9. Payment to suppliers Included
Accounting 8/e Solutions Manual910
(continued) E 13A-7
Req. 2
Cash flows from operating activities:Receipts:
Collections from customers $ 118,000Collection of dividend
Beg. Prop. End. Prop.d. Acquisitions of & Equip., & Equip.,
property and Net + Acquisitions − Deprec. = Netequipment = $1,184 = $3,428 + X − $270 = $4,342
X = $1,184
Beg. End.LT Liab. + Borrowing = LT Liab
e. Borrowing = $10 = $467 + X = $477
X = $ 10
f. Cash receipt Beg. Common End. Commonfrom issuance Stock + Issuance = Stockof stock = $232 = $446 + X = $678
X = $232
Beg. Ret. Net End. Ret.g. Payment of Earnings + Income − Dividends = Earnings
dividends = $275 = $3,772 + $1,504 − X = $5,001
X = $275
Chapter 13 The Statement of Cash Flows 915
Appendix A: Problems A
(35-45 min.) P 13A-12A
KTG, Inc.Statement of Cash Flows
Year Ended November 30, 2011
Cash flows from operating activities: Receipts: Collections from customers $ 605,300 Dividends received 4,200 Total cash receipts $ 609,500 Payments: To suppliers $(371,300) To employees (94,000) For interest (13,500) For income tax (39,000 ) Total cash payments (517,800 ) Net cash provided by operating activities 91,700
Cash flows from investing activities: Purchase of plant assets $(58,400) Cash receipt from sale of plant assets 22,500 Net cash used for investing activities (35,900)
Cash flows from financing activities: Cash receipt from issuance of notes payable $ 48,100 Cash receipt from issuance of common stock 68,900 Payment of notes payable (49,000) Payment of dividends (50,400 ) Net cash provided by financing activities 17,600 Net increase in cash $ 73,400 Cash balance, November 30, 2010 39,700 Cash balance, November 30, 2011 $ 113,100
Accounting 8/e Solutions Manual916
(40 min.) P 13A-13A
Req. 1
The purpose of the cash flow statement is to show where cash
came from and how cash was spent during the period.
Req. 2
North American Reserve Rare CoinsIncome Statement
Year Ended December 31, 2010Sales revenue (2,900 × $300) $870,000Cost of goods sold 310,000Salary expense 96,000Depreciation expense ($46,000 / 5) 9,200Rent expense 11,000Income tax expense 16,000 Net income $ 427,800
North American Reserve Rare CoinsStatement of Cash Flows
Year Ended December 31, 2010Cash flows from operating activities: Cash receipts: Collections from customers (2,900 x $300 x .85) $ 739,500 Cash payments: To suppliers ($330,000 + $135,000 + $11,000) $(476,000) To employees ($96,000 – $5,000) (91,000) For income tax (16,000 ) Total cash payments (583,000 ) Net cash provided by operating activities 156,500
Cash flows from investing activities: Purchase of store fixtures (46,000 ) Net cash used for investing activities (46,000)
Cash flows from financing activities: Issuance of common stock $475,000 Payment of dividends (43,000) Net cash used for financing activities 432,000 Net increase in cash $ 542,500Cash balance, December 31, 2009 0 Cash balance, December 31, 2010 $ 542,500
Chapter 13 The Statement of Cash Flows 919
(30-40 min.) P 13A-14A
Req. 1
Cobbs Hill, Inc.Statement of Cash Flows
Year Ended December 31, 2012Cash flows from operating activities: Cash receipts: Collections from customers ($443,000 − $1,700) $ 441,300 Receipts of interest 8,700 Total cash receipts $ 450,000 Cash payments: To suppliers: Inventory ($200,200 − $12,800 − $4,900) $(182,500) Operating expenses ($10,000 + $1,800) (11,800) To employees (73,400) For interest (21,800) For income tax (19,700 ) Total cash payments (309,200 ) Net cash provided by operating activities 140,800
Cash flows from investing activities: Purchase of land $ (24,700) Purchase of equipment ($92,700 − depreciation expense of $14,200 = $78,500; $100,900 − $78,500) (22,400 ) Net cash used for investing activities (47,100)
Cash flows from financing activities: Payment of dividends ($5,700 + $112,400 − $38,300) $ (79,800) Payment of note payable (27,000) Issuance of common stock 23,800 Net cash used for financing activities (83,000 )Net increase in cash $ 10,700Cash balance, December 31, 2011 15,300 Cash balance, December 31, 2012 $ 26,000
Accounting 8/e Solutions Manual920
(continued) P 13A-14A
Req. 2
C. This problem will help evaluate an investment because I will
learn how operating activities, investing activities, and
financing activities generate cash receipts and cash payments,
and I will learn how companies prepare the statement of cash
flows.
Chapter 13 The Statement of Cash Flows 921
(45-60 min.) P 13A-15A
I-M-Mobile, Inc.Statement of Cash Flows
Year Ended December 31, 2010
Cash flows from operating activities: Receipts: Collections from customers $ 308,600 Receipts of Interest 17,100 Total cash receipts $ 325,700 Payments: To suppliers ($101,100 + $46,200) $(147,300) To employees (65,500) For interest (21,100) For income tax (6,000 ) Total cash payments (239,900 ) Net cash provided by operating activities 85,800
Cash flows from investing activities: Purchase of equipment $ (54,500) Net cash used for investing activities (54,500)
Cash flows from financing activities: Issuance of common stock $ 60,700 Payment of note payable (82,000) Payment of dividends (1,500 ) Net cash used for financing activities (22,800 )Net increase in cash $ 8,500 Cash balance, December 31, 2009 87,300 Cash balance, December 31, 2010 $ 95,800
Accounting 8/e Solutions Manual922
Appendix A: Problems B
(35-45 min.) P 13A-16B
SKG, Inc.Statement of Cash Flows
Year Ended November 30, 2011
Cash flows from operating activities: Receipts: Collections from customers $ 605,500 Dividends received 4,400 Total cash receipts $ 609,900 Payments: To suppliers $(374,800) To employees (95,000) For interest (12,500) For income tax (40,000 ) Total cash payments (522,300 ) Net cash provided by operating activities 87,600
Cash flows from investing activities: Purchase of plant assets $(55,400) Cash receipt from sale of plant assets 25,500 Net cash used for investing activities (29,900)
Cash flows from financing activities: Cash receipt from issuance of notes payable $ 43,100 Cash receipt from issuance of common stock 60,900 Payment of notes payable (48,000) Payment of dividends (50,400 ) Net cash provided by financing activities 5,600 Net increase in cash $ 63,300 Cash balance, November 30, 2010 40,000 Cash balance, November 30, 2011 $ 103,300
Chapter 13 The Statement of Cash Flows 923
(40 min.) P 13A-17B
Req. 1
Official Reserve Rare CoinsIncome Statement
Year Ended December 31, 2010Sales revenue (2,800 × $225) $630,000Cost of goods sold 340,000Salary expense 94,000Depreciation expense ($46,000 / 5) 9,200Rent expense 10,000Income tax expense 22,000 Net income $154,800
Official Reserve Rare CoinsStatement of Cash Flows
Year Ended December 31, 2010Cash flows from operating activities: Cash receipts: Collections from customers (2,800 x $225 x .80) $ 504,000 Cash payments: To suppliers ($310,000 + $137,000 + $10,000) $(457,000) To employees ($94,000 – $2,000) (92,000) For income tax (22,000 ) Total cash payments (571,000 ) Net cash used for operating activities (67,000)
Cash flows from investing activities: Purchase of store fixtures (46,000 ) Net cash used for investing activities (46,000)
Cash flows from financing activities: Issuance of common stock $475,000 Payment of dividends (44,000) Net cash used for financing activities 431,000 Net increase in cash $ 318,000Cash balance, December 31, 2009 0 Cash balance, December 31, 2010 $ 318,000
Chapter 13 The Statement of Cash Flows 925
(30-40 min.) P 13A-18B
Req. 1
Digital Subscriptions, Inc.Statement of Cash Flows
Year Ended December 31, 2012Cash flows from operating activities: Cash receipts: Collections from customers ($441,000 − $1,500) $ 439,500 Receipts of interest 8,100 Total cash receipts $ 447,600 Cash payments: To suppliers: Inventory ($205,200 − $11,600 − $5,500) $(188,100) Operating expenses ($10,300 + $1,600) (11,900) To employees (79,400) For interest (21,900) For income tax (19,900 ) Total cash payments (321,200 ) Net cash provided by operating activities 126,400
Cash flows from investing activities: Purchase of land $ (24,700) Purchase of equipment ($88,700 − depreciation expense of $14,800 = $73,900; $96,900 − $73,900) (23,000 ) Net cash used for investing activities (47,700)
Cash flows from financing activities: Payment of dividends ($4,200 + $97,600 − $38,700) $ (63,100) Payment of note payable (29,000) Issuance of common stock 24,400 Net cash used for financing activities (67,700 )Net increase in cash $ 11,000Cash balance, December 31, 2011 15,800 Cash balance, December 31, 2012 $ 26,800
Accounting 8/e Solutions Manual926
(continued) P 13A-18B
Req. 2
C. This problem will help evaluate an investment because I will
learn how operating activities, investing activities, and
financing activities generate cash receipts and cash payments,
and I will learn how companies prepare the statement of cash
flows.
Chapter 13 The Statement of Cash Flows 927
(45-60 min.) P 13A-19B
B-Mobile, Inc.Statement of Cash Flows
Year Ended December 31, 2010
Cash flows from operating activities: Receipts: Collections from customers $ 308,900 Receipts of Interest 14,600 Total cash receipts $ 323,500 Payments: To suppliers ($101,100 + $46,700) $(147,800) To employees (69,500) For interest (21,100) For income tax (9,500 ) Total cash payments (247,900 ) Net cash provided by operating activities 75,600
Cash flows from investing activities: Purchase of equipment $ (49,500) Net cash used for investing activities (49,500)
Cash flows from financing activities: Issuance of common stock $ 60,100 Payment of note payable (75,000) Payment of dividends (1,300 ) Net cash used for financing activities (16,200 )Net increase in cash $ 9,900 Cash balance, December 31, 2009 87,400 Cash balance, December 31, 2010 $ 97,300
Accounting 8/e Solutions Manual928
Chapter 13 Appendix B
Appendix B Problems
(45-60 min.) P 13B-1B
Alden Group, Inc.Work Sheet for Statement of Cash Flows (Indirect Method)
Alden Group, Inc.Work Sheet for Statement of Cash Flows (Indirect Method)
Year Ended December 31, 2008
PANEL B – STATEMENTOF CASH FLOWS
BALANCESDEC. 31,
2011
TRANSACTION ANALYSIS BALANCESDEC. 31,
2012DEBIT CREDITCash flows fromoperating activities: Net income (a) 61,600 Adjustments to reconcile net inc. to cash flow from oper. Depreciation (b) 15,300 Decr. in accounts rec. (c) 1,600 Incr. in inventory (d) 3,600 Decr. in accts. pay. (e) 1,200 Incr. in accrued liab. (f) 1,900
Cash flows frominvesting activities: Purchase of land (g) 25,100 Purchase of equip. (h) 22,500
Cash flows fromfinancing activities: Payment of dividends (i) 28,700 Payment of note pay. (j) 10,000 Issuance of com. stk. (k) 8,800
89,200 91,100Net decrease in cash and cash equivalents (l) 1,900 Totals 91,100 91,100
Accounting 8/e Solutions Manual930
(45-60 min.) P 13B-2B
Cobbs Hill, Inc.Work Sheet for Statement of Cash Flows (Indirect Method)
Cobb Hill, Inc.Work Sheet for Statement of Cash Flows (Indirect Method)
Year Ended December 31, 2012
PANEL B – STATEMENTOF CASH FLOWS
BALANCESDEC. 31,
2011
TRANSACTION ANALYSIS BALANCESDEC. 31,
2012DEBIT CREDITCash flows fromoperating activities: Net income (a)112,400 Adjustments to reconcile net inc. to cash flow from oper. Depreciation (b) 14,200 Incr. in accounts rec. (c) 1,700 Decr. in inventory (d) 12,800 Incr. in accts. pay. (e) 4,900 Decr. in accrued liab. (f) 1,800
Cash flows frominvesting activities: Purchase of land (g) 24,700 Purchase of equip. (h) 22,400
Cash flows fromfinancing activities: Payment of dividends (i) 79,800 Payment of note pay. (j) 27,000 Issuance of com. stk. (k) 23,800
168,100 157,400Net decrease in cash and cash equivalents (l)10,700Totals 168,100 168,100
Accounting 8/e Solutions Manual932
(45-60 min.) P 13B-3B
Alden Group, Inc.Work Sheet for Statement of Cash Flows (Indirect Method)
Alden Group, Inc.Work Sheet for Statement of Cash Flows (Indirect Method)
Year Ended December 31, 2012
PANEL B – STATEMENTOF CASH FLOWS
BALANCESDEC. 31,
2011
TRANSACTION ANALYSIS BALANCESDEC. 31,
2012DEBIT CREDITCash flows fromoperating activities: Net income (a) 60,700 Adjustments to reconcile net inc. to cash flow from oper. Depreciation (b) 15,600 Decr. in accounts rec. (c) 1,600 Incr. in inventory (d) 3,400 Decr. in accts. pay. (e) 1,100 Incr. in accrued liab. (f) 1,300
Cash flows frominvesting activities: Purchase of land (g) 25,400 Purchase of equip. (h) 22,300
Cash flows fromfinancing activities: Payment of dividends (i) 28,400 Payment of note pay. (j) 12,000 Issuance of com. stk. (k) 8,300
87,500 92,600Net decrease in cash and cash equivalents (l) 5,100 Totals 92,600 92,600
Accounting 8/e Solutions Manual934
(45-60 min.) P 13B-4B
Digital Subscriptions, Inc.Work Sheet for Statement of Cash Flows (Indirect Method)
Digital Subscriptions, Inc.Work Sheet for Statement of Cash Flows (Indirect Method)
Year Ended December 31, 2012
PANEL B – STATEMENTOF CASH FLOWS
BALANCESDEC. 31,
2011
TRANSACTION ANALYSIS BALANCESDEC. 31,
2012DEBIT CREDITCash flows fromoperating activities: Net income (a) 97,600 Adjustments to reconcile net inc. to cash flow from oper. Depreciation (b) 14,800 Incr. in accounts rec. (c) 1,500 Decr. in inventory (d) 11,600 Incr. in accts. pay. (e) 5,500 Decr. in accrued liab. (f) 1,600
Cash flows frominvesting activities: Purchase of land (g) 24,700 Purchase of equip. (h) 23,000
Cash flows fromfinancing activities: Payment of dividends (i) 63,100 Payment of note pay. (j) 29,000 Issuance of com. stk. (k) 24,400
153,900 142,900Net decrease in cash and cash equivalents (l)11,000Totals 153,900 153,900