Acc 560 week 9 chapter 13 exercises acc560 week 9 chapter 13
ACC 560 WEEK 9 CHAPTER 13 EXERCISES ACC560 Week 9 CHAPTER 13 EXERCISES ACC/560 Week 9 CHAPTER 13 EXERCISES
Chapter 13 Exercises 4, 6, 7, Problem 1A.
The text book used is Managerial Accounting: Tools for Business Decision Making – 7th Edition Jerry J. Weygandt; Paul D. Kimmel; Donald E. Kieso
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.
Prepare the operating activities section—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.)
Prepare statement of cash flows and compute free cash flow.
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:
1. Net income was $22,630. Dividends declared and paid were $19,500.
2. No noncash investing and financing activities occurred during 2017.
3. The land was sold for cash of $4,900.
Instructions
1. Prepare a statement of cash flows for 2017 using the indirect method.
2. Compute free cash flow.
Prepare a statement of cash flows—indirect method.
P13-1A You are provided with the following transactions that took place during a recent fiscal year.
| Transaction | Statement of
Cash Flow Activity Affected |
Cash Inflow,
Outflow, or 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.
Determine cash flow effects of changes in equity accounts.