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Phoniex
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Category > Accounting Posted 13 Jul 2017 My Price 30.00

WileyPlus Accounting

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Question 1

Riverbed Beverage Company reported the following items in the most recent year.

Net income		$48,300
Dividends paid		6,320
Increase in accounts receivable		11,860
Increase in accounts payable		7,470
Purchase of equipment (capital expenditure)		8,710
Depreciation expense		4,470
Issue of notes payable		22,850

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

RIVERBED BEVERAGE COMPANY Statement of Cash Flows

		$
	$












		$

Compute free cash flow.

Free Cash Flow

Question 2

The major classifications of activities reported in the statement of cash flows are operating, investing, and financing. Classify each of the transactions listed below as:

1.		Operating activity-add to net income.
2.		Operating activity-deduct from net income.
3.		Investing activity.
4.		Financing activity.
5.		Reported as significant noncash activity

The transactions are as follows.

	Transactions	Classifications of Activities
(a)	Issuance of common stock.
(b)	Purchase of land and building.
(c)	Redemption of bonds
(d)	Sale of equipment.
(e)	Depreciation of machinery.
(f)	Amortization of patent.
(g)	Issuance of bonds for plant assets.
(h)	Payment of cash dividends.
(i)	Exchange of furniture for office equipment.
(j)	Purchase of treasury stock.
(k)	Loss on sale of equipment.
(l)	Increase in accounts receivable during the year.
(m)	Decrease in accounts payable during the year.

Question 3

The comparative balance sheets of Wildhorse Inc. at the beginning and the end of the year 2017 are as follows.

WILDHORSE INC. BALANCE SHEETS
	Dec. 31, 2017	Jan. 1, 2017	Inc./Dec.
Assets
Cash	$ 47,620	$ 15,620	$32,000	Inc.
Accounts receivable	94,790	89,170	5,620	Inc.
Equipment	42,790	23,170	19,620	Inc.
Less: Accumulated Depreciation-Equipment	20,790	11,000	9,790	Inc.
Total	$164,410	$116,960
Liabilities and Stockholders’ Equity
Accounts payable	$ 23,790	$ 16,170	7,620	Inc.
Common stock	102,620	81,170	21,450	Inc.
Retained earnings	38,000	19,620	18,380	Inc.
Total	$164,410	$116,960

Net income of $47,790 was reported, and dividends of $29,410 were paid in 2017. New equipment was purchased and none was sold.

Prepare a statement of cash flows for the year 2017. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

WILDHORSE INC. Statement of Cash Flows

		$
Adjustments to reconcile net income to

	$















		$

Question 4

Novak Corporation is preparing its 2017 statement of cash flows, using the indirect method. Presented below is a list of items that may affect the statement. Using the code below, indicate how each item will affect Novak’s 2017 statement of cash flows.

Code Letter		Effect
A		Added to net income in the operating section
D		Deducted from net income in the operating section
R-I		Cash receipt in investing section
P-I		Cash payment in investing section
R-F		Cash receipt in financing section
P-F		Cash payment in financing section
N		Noncash investing and financing activity

(a)		Purchase of land and building.
(b)		Decrease in accounts receivable.
(c)		Issuance of stock.
(d)		Depreciation expense.
(e)		Sale of land at book value.
(f)		Sale of land at a gain.
(g)		Payment of dividends.
(h)		Increase in accounts receivable.
(i)		Purchase of available-for-sale debt investment.
(j)		Increase in accounts payable.
(k)		Decrease in accounts payable.
(l)		Loan from bank by signing note.
(m)		Purchase of equipment using a note.
(n)		Increase in inventory.
(o)		Issuance of bonds.
(p)		Redemption of bonds payable.
(q)		Sale of equipment at a loss.
(r)		Purchase of treasury stock.

Question 5

Waterway Inc., a greeting card company, had the following statements prepared as of December 31, 2017.

WATERWAY INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2017 AND 2016
	12/31/17		12/31/16
Cash	$6,000		$7,000
Accounts receivable	62,600		50,600
Short-term debt investments (available-for-sale)	35,200		18,100
Inventory	39,600		59,700
Prepaid rent	5,000		4,000
Equipment	152,800		128,900
Accumulated depreciation—equipment	(34,900	)	(24,800	)
Copyrights	45,900		49,800
Total assets	$312,200		$293,300

Accounts payable	$45,900		$39,900
Income taxes payable	4,000		6,000
Salaries and wages payable	8,100		3,900
Short-term loans payable	8,000		10,000
Long-term loans payable	60,500		68,500
Common stock, $10 par	100,000		100,000
Contributed capital, common stock	30,000		30,000
Retained earnings	55,700		35,000
Total liabilities & stockholders’ equity	$312,200		$293,300

WATERWAY INC. INCOME STATEMENT FOR THE YEAR ENDING DECEMBER 31, 2017
Sales revenue		$337,675
Cost of goods sold		175,500
Gross profit		162,175
Operating expenses		119,500
Operating income		42,675
Interest expense	$11,300
Gain on sale of equipment	2,000	9,300
Income before tax		33,375
Income tax expense		6,675
Net income		$26,700

Additional information:

1.		Dividends in the amount of $6,000 were declared and paid during 2017.
2.		Depreciation expense and amortization expense are included in operating expenses.
3.		No unrealized gains or losses have occurred on the investments during the year.
4.		Equipment that had a cost of $20,000 and was 70% depreciated was sold during 2017.

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

WATERWAY INC. Statement of Cash Flows

		$
	$




















		$

Question 6

Pharoah Inc., a greeting card company, had the following statements prepared as of December 31, 2017.

PHAROAH INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2017 AND 2016
	12/31/17		12/31/16
Cash	$6,100		$6,900
Accounts receivable	61,900		50,500
Short-term debt investments (available-for-sale)	34,800		18,200
Inventory	39,900		59,800
Prepaid rent	4,900		4,000
Equipment	155,500		131,200
Accumulated depreciation—equipment	(34,800	)	(25,300	)
Copyrights	45,700		50,200
Total assets	$314,000		$295,500

Accounts payable	$46,200		$39,700
Income taxes payable	4,000		6,100
Salaries and wages payable	7,900		4,000
Short-term loans payable	7,900		10,000
Long-term loans payable	59,800		68,600
Common stock, $10 par	100,000		100,000
Contributed capital, common stock	30,000		30,000
Retained earnings	58,200		37,100
Total liabilities & stockholders’ equity	$314,000		$295,500

PHAROAH INC. INCOME STATEMENT FOR THE YEAR ENDING DECEMBER 31, 2017
Sales revenue		$335,575
Cost of goods sold		173,200
Gross profit		162,375
Operating expenses		119,100
Operating income		43,275
Interest expense	$11,400
Gain on sale of equipment	2,000	9,400
Income before tax		33,875
Income tax expense		6,775
Net income		$27,100

Additional information:

1.		Dividends in the amount of $6,000 were declared and paid during 2017.
2.		Depreciation expense and amortization expense are included in operating expenses.
3.		No unrealized gains or losses have occurred on the investments during the year.
4.		Equipment that had a cost of $20,100 and was 70% depreciated was sold during 2017.

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).)

PHAROAH INC. Statement of Cash Flows

		$
Adjustments to reconcile net income to

	$

























		$

Answers

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Status NEW Posted 13 Jul 2017 05:07 AM My Price 30.00

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