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ACC 201 Chapter 13 Problem set A
Problem 13-1A
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Your answer is correct. |
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You are provided with the following transactions that took place during a recent fiscal year.
Complete the table indicating whether each item (1) affects operating activities, investing activities, financing activities, or is a noncash 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.
Problem 13-3A
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Your answer is correct. |
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The income statement of Toby Zed Company is presented here.
Toby Zed Company |
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Sales revenue |
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$7,500,000 |
Cost of goods sold |
 |  |  |  |
    Beginning inventory |
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$1,900,000 |
 |  |
    Purchases |
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4,400,000 |
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    Goods available for sale |
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6,300,000 |
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    Ending inventory |
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1,400,000 |
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Total cost of goods sold |
 |  |  |
4,900,000 |
Gross profit |
 |  |  |
2,600,000 |
Operating expenses |
 |  |  |
1,150,000 |
Net income |
 |  |  |
$1,450,000 |
Additional information:
1. |
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Accounts receivable increased $200,000Â during the year, and inventory decreased $500,000. |
2. |
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Prepaid expenses increased $175,000Â during the year. |
3. |
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Accounts payable to suppliers of merchandise decreased $340,000Â during the year. |
4. |
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Accrued expenses payable decreased $105,000Â during the year. |
5. |
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Operating expenses include depreciation expense of $85,000. |
Prepare the operating activities section of the statement of cash flows for the year ended November 30, 2014, for Toby Zed Company, 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 13-5A
Rattigan Company’s income statement contained the condensed information below.
Rattigan Company |
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Service revenue |
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$970,000 |
Operating expenses, excluding depreciation |
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$624,000 |
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Depreciation expense |
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55,000 |
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Loss on disposal of plant assets |
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25,000 |
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704,000 |
Income before income taxes |
 |  |  |
266,000 |
Income tax expense |
 |  |  |
40,000 |
Net income |
 |  |  |
$226,000 |
Rattigan’s balance sheet contained the comparative data at December 31, shown below.
 |  |
2014 |
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2013 |
Accounts receivable |
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$75,000 |
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$60,000 |
Accounts payable |
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41,000 |
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27,000 |
Income taxes payable |
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13,000 |
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7,000 |
Accounts payable pertain to operating expenses.
Prepare the operating activities section of the 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 13-7A
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Your answer is correct. |
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Presented below are the financial statements of Rajesh Company.
Rajesh Company |
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Assets |
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2014 |
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2013 |
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Cash |
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$37,000 |
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$20,000 |
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Accounts receivable |
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33,000 |
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14,000 |
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Inventory |
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30,000 |
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20,000 |
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Equipment |
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60,000 |
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78,000 |
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Accumulated depreciation—equipment |
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(29,000 |
) |
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(24,000 |
) |
   Total |
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$131,000 |
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$108,000 |
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Liabilities and Stockholders’ Equity |
 |  |  |  |  |  |
Accounts payable |
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$29,000 |
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$Â 15,000 |
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Income taxes payable |
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7,000 |
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8,000 |
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Bonds payable |
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27,000 |
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33,000 |
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Common stock |
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18,000 |
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14,000 |
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Retained earnings |
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50,000 |
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38,000 |
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   Total |
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$131,000 |
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$108,000 |
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Â
Rajesh Company |
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Sales revenue |
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$242,000 |
Cost of goods sold |
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175,000 |
Gross profit |
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67,000 |
Operating expenses |
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24,000 |
Income from operations |
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43,000 |
Interest expense |
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3,000 |
Income before income taxes |
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40,000 |
Income tax expense |
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8,000 |
Net income |
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$32,000 |
Additional data:
1. |
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Depreciation expense is 13,300. |
2. |
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Dividends declared and paid were $20,000. |
3. |
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During the year equipment was sold for $9,700Â cash. This equipment cost $18,000Â originally and had accumulated depreciation of $8,300 at the time of sale. |
(a) 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).)
Â
Problem 13-9A
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Your answer is partially correct. |
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Condensed financial data of Sinjh Inc. follow.
SINJH INC. |
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Assets |
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2014 |
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2013 |
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Cash |
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$100,350 |
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$48,400 |
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Accounts receivable |
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92,800 |
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33,000 |
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Inventory |
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112,500 |
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102,850 |
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Prepaid expenses |
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29,300 |
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26,000 |
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Long-term investments |
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140,000 |
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114,000 |
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Plant assets |
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265,000 |
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242,500 |
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Accumulated depreciation |
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(47,000 |
) |
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(52,000 |
) |
   Total |
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$692,950 |
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$514,750 |
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Liabilities and Stockholders’ Equity |
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Accounts payable |
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$112,000 |
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$67,300 |
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Accrued expenses payable |
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16,500 |
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17,000 |
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Bonds payable |
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110,000 |
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150,000 |
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Common stock |
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220,000 |
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175,000 |
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Retained earnings |
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234,450 |
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105,450 |
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   Total |
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$692,950 |
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$514,750 |
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Â
SINJH INC. |
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Sales revenue |
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$392,780 |
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Gain on disposal of plant assets |
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5,000 |
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$397,780 |
Less: |
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     Cost of goods sold |
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135,460 |
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     Operating expenses, excluding depreciation |
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12,410 |
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     Depreciation expense |
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45,000 |
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     Income tax expense |
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27,280 |
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     Interest expense |
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4,730 |
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224,880 |
Net income |
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$172,900 |
Additional information:
1. |
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New plant assets costing $80,000Â were purchased for cash during the year. |
2. |
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Old plant assets having an original cost of $57,500Â and accumulated depreciation of 50,000 were sold for $12,500Â cash. |
3. |
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Bonds payable matured and were paid off at face value for cash. |
4. |
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A cash dividend of $43,900Â was declared and paid during the year. |
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 13-11A
The comparative balance sheets for Strackman Lux Company as of December 31 are presented below.
Strackman Lux Company |
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Assets |
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2014 |
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2013 |
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Cash |
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$59,520 |
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$45,000 |
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Accounts receivable |
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44,000 |
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62,000 |
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Inventory |
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154,550 |
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142,000 |
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Prepaid expenses |
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15,280 |
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21,000 |
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Land |
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145,000 |
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130,000 |
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Buildings |
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200,000 |
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200,000 |
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Accumulated depreciation—buildings |
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(60,000 |
) |
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(40,000 |
) |
Equipment |
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228,000 |
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155,000 |
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Accumulated depreciation—equipment |
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(45,000 |
) |
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(35,000 |
) |
   Total |
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$741,350 |
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$680,000 |
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Liabilities and Stockholders’ Equity |
 |  |  |  |  |  |
Accounts payable |
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$46,350 |
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$40,000 |
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Bonds payable |
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300,000 |
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300,000 |
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Common stock, $1 par |
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195,000 |
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160,000 |
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Retained earnings |
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200,000 |
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180,000 |
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   Total |
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$741,350 |
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$680,000 |
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Additional information:
1. |
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Operating expenses include depreciation expense of $40,000. |
2. |
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Land was sold for cash at book value of $20,000. |
3. |
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Cash dividends of $25,000Â were paid. |
4. |
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Net income for 2014 was $45,000. |
5. |
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Equipment was purchased for $95,000Â cash. In addition, equipment costing $22,000Â with a book value of $12,000Â was sold for $6,000Â cash. |
6. |
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Issued 35,000 shares of $1 par value common stock in exchange for land with a fair value of $35,000. |
Prepare a statement of cash flows for the year ended December 31, 2014, 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).)
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