Financial Accounting (12th Edition) (What's New in Accounting)
12th Edition
ISBN: 9780134725987
Author: C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr.
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 11, Problem 11.24AE
(Learning Objective 4: Prepare the statement of
Additional data:
- a. Collections from customers are $1 5,500 less than sales.
- b. Payments to suppliers are $1,500 more than the sum of cost of goods sold plus advertising expense.
- c. Payments to employees are $2,400 more than salary expense.
- d. Dividend revenue, interest expense, and income tax expense equal their cash amounts.
- e. Acquisition of plant assets is $156,000. Of this amount, $108,000 is paid in cash and $48,000 is financed by signing a long-term note payable.
- f. Proceeds from the sale of land totaled $26,000.
- g. Proceeds from the issuance of common stock totaled $86,000.
- h. Payment of a long-term note payable is $29,000.
- i. Payment of dividends is $9,000.
- j. Cash balance, June 30, 2017, was $38,000.
Requirements
- 1. Prepare Hapland Light’s statement of cash flows and accompanying schedule of noncash investing and financing activities. Report operating activities using the direct method.
- 2. Evaluate the company’s cash flows for the year. In your evaluation, mention all three categories of cash flows and give the rationale for your evaluation.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
(Learning Objectives 1, 7: Show how to speed up cash flow from receivables;evaluate liquidity through ratios) Norfolk Co., Inc., an electronics and appliance chain,reported these figures in millions of dollars:Net sales .........................................Receivables at end of year...............2019$398,5003,8602018$418,5004,110Requirements1. Compute Norfolk’s days’ sales in receivables or days’ sales outstanding (DSO) during 2019.(For this exercise, use “net sales” for “net credit sales” when calculating ratios.)2. Is Norfolk’s DSO long or short? Nico Networks takes 39 days to collect its average levelof receivables. Divencenzo, the overnight shipper, takes 33 days. What causes Norfolk’scollection period to be so different?
(Learning Objectives 1, 7: Show how to speed up cash flow from receivables;evaluate liquidity through ratios) Geneva Co., Inc., an electronics and appliance chain,reported these figures in millions of dollars:Net sales .........................................Receivables at end of year...............2019$523,1253,8602018$543,1254,510Requirements1. Compute Geneva’s days’ sales in receivables or days’ sales outstanding (DSO) during2019. (For this exercise, use “net sales” for “net credit sales” when calculating ratios.)2. Is Geneva’s DSO long or short? Kurzwel Networks takes 39 days to collect its averagelevel of receivables. Domarko Freight, the overnight shipper, takes 33 days. What causesGeneva’s collection period to be so different?
rect method.
Carlson Software Corp. has assembled the following data for the years ending December 31,
P12-60A (Learning Objectives 2, 3: Prepare the statement of cash flows-indirect method)
2016 and 2015
3. Prepal
cash flows from opl
4
5
6
7
8
$
10
11
12
13
Current Accounts:
Current assets:
Cash and cash equivalents
Accounts receivable
Inventories
Prepaid expenses
Current liabilities:
Accounts payable
Income tax payable
Accrued liabilities
Transaction Data for 2016:
Acquisition of land by issuing
long-term note payable.....
Stock dividends
Collection of loan.
Depreciation expense.
Purchase of building
with cash.
Retirement of honds payable
by issuing common stock....
Purchase of long-term
investment with cash........
$202,000
34,900
12,400
19,000
159,000
80,000
45,300
31, 2016 Format
December 31,
2016
$ 105,800
18,000
8,600
2,900
equipment
Amortization expense
$ 9,300
28,600
15,000
Purchase of treasury stock.
Loss on sale of equipment......
Payment of cash dividends
Issuance of…
Chapter 11 Solutions
Financial Accounting (12th Edition) (What's New in Accounting)
Ch. 11 - Quick Check (Answers are given here) The statement...Ch. 11 - Prob. 2QCCh. 11 - Prob. 3QCCh. 11 - Which of the three types of activities reported on...Ch. 11 - Prob. 5QCCh. 11 - On the statement of cash flows, which of the...Ch. 11 - On the statement of cash flows, which of the...Ch. 11 - Prob. 8QCCh. 11 - Prob. 9QCCh. 11 - Which of the following transactions does not...
Ch. 11 - If the indirect method is used to calculate net...Ch. 11 - In 2018, Jubilee Company repurchased its own stock...Ch. 11 - Prob. 13QCCh. 11 - Prob. 14QCCh. 11 - Prob. 11.1ECCh. 11 - LO 1 (Learning Objective 1: Explain the purposes...Ch. 11 - Prob. 11.2SCh. 11 - Prob. 11.3SCh. 11 - Prob. 11.4SCh. 11 - (Learning Objective 2: Distinguish among...Ch. 11 - Prob. 11.6SCh. 11 - (Learning Objective 3: Prepare a statement of cash...Ch. 11 - Prob. 11.8SCh. 11 - (Learning Objective 3: Calculate financing cash...Ch. 11 - Prob. 11.10SCh. 11 - (Learning Objective 4: Calculate operating cash...Ch. 11 - Prob. 11.12SCh. 11 - Prob. 11.13SCh. 11 - Prob. 11.14SCh. 11 - Prob. 11.15AECh. 11 - (Learning Objectives 2, 3: Distinguish among...Ch. 11 - Prob. 11.17AECh. 11 - Prob. 11.18AECh. 11 - Prob. 11.19AECh. 11 - Prob. 11.20AECh. 11 - Prob. 11.21AECh. 11 - Prob. 11.22AECh. 11 - Prob. 11.23AECh. 11 - (Learning Objective 4: Prepare the statement of...Ch. 11 - Prob. 11.25AECh. 11 - Prob. 11.26BECh. 11 - (Learning Objectives 2, 3: Distinguish among...Ch. 11 - Prob. 11.28BECh. 11 - Prob. 11.29BECh. 11 - Prob. 11.30BECh. 11 - Prob. 11.31BECh. 11 - Prob. 11.32BECh. 11 - Prob. 11.33BECh. 11 - Prob. 11.34BECh. 11 - Prob. 11.35BECh. 11 - Prob. 11.36BECh. 11 - Prob. 11.37QCh. 11 - Prob. 11.38QCh. 11 - Prob. 11.39QCh. 11 - Prob. 11.40QCh. 11 - Prob. 11.41QCh. 11 - Prob. 11.42QCh. 11 - Prob. 11.43QCh. 11 - Prob. 11.44QCh. 11 - Prob. 11.45QCh. 11 - Prob. 11.46QCh. 11 - Prob. 11.47QCh. 11 - Prob. 11.48QCh. 11 - Prob. 11.49QCh. 11 - Prob. 11.50QCh. 11 - The book value of equipment sold during 2018 was...Ch. 11 - Prob. 11.52QCh. 11 - Prob. 11.53QCh. 11 - Prob. 11.54QCh. 11 - Prob. 11.55QCh. 11 - Prob. 11.56QCh. 11 - Prob. 11.57APCh. 11 - Prob. 11.58APCh. 11 - (Learning Objectives 2, 3: Prepare the statement...Ch. 11 - Prob. 11.60APCh. 11 - Prob. 11.61APCh. 11 - Prob. 11.62APCh. 11 - Prob. 11.63APCh. 11 - (Learning Objectives 2, 3, 4: Prepare the...Ch. 11 - Prob. 11.65APCh. 11 - Prob. 11.66BPCh. 11 - (Learning Objectives 2, 4: Prepare an income...Ch. 11 - (Learning Objectives 2, 3: Prepare the statement...Ch. 11 - Prob. 11.69BPCh. 11 - Prob. 11.70BPCh. 11 - Prob. 11.71BPCh. 11 - Prob. 11.72BPCh. 11 - Prob. 11.73BPCh. 11 - Prob. 11.74BPCh. 11 - Prob. 11.75CEPCh. 11 - Prob. 11.76CEPCh. 11 - Prob. 11.77CEPCh. 11 - Prob. 11.78SCCh. 11 - Prob. 11.79DCCh. 11 - Prob. 11.80DCCh. 11 - Ethical Issues Georgetown Motors is having a bad...Ch. 11 - Prob. 1FFCh. 11 - Prob. 1FA
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- (Learning Objectives 1, 7: Show how to speed up cash flow from receivables;evaluate liquidity using ratios) The comparative financial statements of Diamond Pools, Inc.,for 2020, 2019, and 2018 included the following select data:Balance sheetCurrent assets:Cash...............................................Investment in trading securities......Receivables, net of allowancefor uncollectible accounts of $7,$6, and $4, respectivelyInventories .....................................Prepaid expenses............................Total current assets........................Total current liabilities.......................Income statementNet sales (all on account)...................(In millions)2020$ 9015027034050$ 900$ 550$7,7002019$ 9518028035540$ 950$ 640$5,3552018$ 6011523032535$ 765$ 650$4,745Requirements1. Compute the following ratios for 2020 and 2019:a. Current ratiob. Quick (acid-test) ratioc. Days’ sales outstanding2. Which ratios improved from 2019 to 2020 and which ratios deteriorated?…arrow_forwardPARNELL COMPANY Income Statement For the Year Ended December 31, 2021 ($ in thousands) Revenues and gains: Sales $890 11 $901 Gain on sale of building Expenses and loss: Cost of goods sold Salaries $ 345 129 53 Insurance 132 Depreciation Interest expense Loss on sale of equipment 59 13 731 170 Income before tax 85 Income tax expense $ 85 Net income PARNELL COMPANY Selected Accounts from Comparative Balance Sheets December 31, 2021 and 2020 ($ in thousands) Year Change $ 61 2021 2020 Cash 152 91 Accounts receivable Inventory 342 207 135 312 57 228 120 78 181 (131) (49) 120 36 17 (37) 443 Prepaid insurance Accounts payable Salaries payable Deferred tax liability Bond discount 106 108 84 61 218arrow_forwardSuppose your company sells services of $180 in exchange for $110 cash and $70 on account.Required:1. Show the journal entry to record this transaction.2. Identify the amount that should be reported as net cash flow from operating activities.3. Identify the amount that would be included in net income.4. Show how the indirect method would convert net income (requirement 3) to net cash flowfrom operating activities (requirement 2).5. What general rule about converting net income to operating cash flows is revealed by youranswer to requirement 4?arrow_forward
- Mazaya Company has the following information available: Net Income R.O. 37,500; Cash Provided by Operations R.O. 46,500; Cash Sales R.O. 97,500; Capital Expenditures R.O.16,500; Dividends Paid R.O. 4,500. What is Mazaya's free cash flow?arrow_forward! Required information [The following information applies to the questions displayed below.] The following information pertains to the inventory of Parvin Company during Year 2. January 1 April 1 700 units @ $31 2,600 units @ $36 900 units @ $39 October 1 Beginning Inventory Purchased Purchased During Year 2, Parvin sold 3,900 units of inventory at $85 per unit and incurred $44,500 of operating expenses. Parvin currently uses the FIFO method but is considering a change to LIFO. All transactions are cash transactions. Assume a 40 percent income tax rate. Parvin started the period with cash of $81,000, inventory of $21,700, common stock of $56,000, and retained earnings of $46,700. d. Determine the cash flow from operating activities under FIFO and LIFO. (Amounts to be deducted should be indicated with minus sign.)arrow_forwardwhat is the cash flow from investing, and financing and operating? Use the following information to perform the calculations below (using the indirect method). Net income Depreciation expense Beginning accounts receivable Ending accounts receivable Beginning inventory Ending inventory Beginning prepaid insurance Ending prepaid insurance (a) $650,000 96,000 423,200 446,000 520,000 577,000 41,600 50,000 Beginning accounts payable Ending accounts payable Purchase of long-term assets Issuance of long-term debt Issuance of stock for cash Issuance of stock for long-term assets Purchase of treasury stock Sale of long-term investment at cost $121,000 159.000 610,000 263,000 188,000 113,000 67.500 57,500arrow_forward
- Prepare cash flows using direct method. Thanks. One Stop Corporation Statement of Cash Flows Year Ended June 30, 2018 Cash Flows from Operating Activities: Receipts: Total Cash Receipts Payments: Total Cash Payments Net Cash Provided by (Used for) Operating Activities Collections from customers $17,000 more than sales dividend revenue, interest expense, and income tax expense equal cash amounts. payments to suppliers are sum of cost of goods sold plus advertising expense. d payments to employees are $1,500 more than salaries expense. Cash payment for acquisition of plant assets is $103,000. cash receipts from sale of land total $24,000 cash receipts from issuance of common stock total $33,000 PAYMENT OF long term notes payable $11,000 payment of dividends is $12,500 cash balance at June 30, 2017 was $26,000 at June 30, 2018 was $40,000 One stop corporation Income statement Year ended June 30, 2018 net sales revenue…arrow_forwarduse the information in the income statement below to calculate operating cash flow (OCF). sales- $1,280 COGS- $620 Dep Exp- $180 EBIT- $480 Int Exp- $110 EBT- $370 Taxes- $78 NI- $292arrow_forwardThe following is the balance sheet and income statement for Metro Eagle Outfitters, in condensed form, plus some information from the cash flow statement. Balance Sheet Cash and short-term investments Accounts receivable Inventory Other current assets Total current assets Long-lived assets Total assets Current liabilities Total liabilities Shareholders' equity Total liabilities and equity Income Statement Sales Cost of sales Gross margin Operating expenses Earnings before interest and taxes Net income Interest paid in cash Taxes paid in cash Cash Flows Cash flow from operations Capital expenditures Dividends 2022 $ 649,992 48,221 351, 452 111,135 1,160,800 573,332 $ 1,734, 132 $ 480,402 511,045 1,223,087 $ 1,734, 132 1. Inventory turnover. 2. Current ratio. 3. Quick ratio. 4. Cash flow ratio. $ 3,479,602 2,104,480 $ 1,375,122 971, 184 $ 403,938 $ 251,108 99 143,909 $ 604,171 95,839 87,492 Required: Calculate the following liquidity ratios for Metro Eagle in 2021 and 2022: 2021 $…arrow_forward
- Comparative financial statements for Weaver Company follow: Weaver Company Comparative Balance Sheet at Decenber 31 This Year Last Year Ansets Canh and canh equivalents Accounte receivable Inventory Prepaiafexpenses Total chrrent assets Property, plant, and equi pnent Less accumulated depreeiation Net property, plant, and equipnent Long-term investmenta 15 19 430 290 150 7 195 602 509 600 105 490 40 450 495 18 39 Total asseta $1,115 $ 998 Liabilities and Stockholders' Equity Accounts payable Acerued liabilities Income taxes payable Total current liabilitien Bonds payable Total liabilities $ 310 65 76 245 80 69 451 250 394 190 701 584 Common stock Retained earnings Total stockholders equity 338 400 76 14 414 $1,115 414 Total liabilities and stockholders' equity 998 Meaver Company Incone Statement For This Year Ended Decenber 31 Sales $790 Cost of gooda sold Gross margin Selling and administrative expenses Net operating income Nonoperating itema: Gain on sale of investments Loss on sale…arrow_forwardSuppose your company sells goods for $300, of which $200 is received in cash and $100 is onaccount. The goods cost your company $125 and were paid for in a previous period. Your companyalso recorded salaries and wages of $70, of which only $30 has been paid in cash.Required:1. Show the journal entries to record these transactions.2. Calculate the amount that should be reported as net cash flow from operating activities.3. Calculate the amount that should be reported as net income.4. Show how the indirect method would convert net income (requirement 3) to net cash flowfrom operating activities (requirement 2).5. What general rule about converting net income to operating cash flows is revealed by youranswer to requirement 4?arrow_forwardPLEASE, PERFORM THE EXERCISE IN EXCEL AND SHOW THE FORMULASPLEASE, PERFORM THE EXERCISE IN EXCEL AND SHOW THE FORMULASPLEASE, PERFORM THE EXERCISE IN EXCEL AND SHOW THE FORMULAS (Not written.. please) 2) The company La Planetaria, S.A., presents you with the following income statement and additional information, so that you can support it with the calculations to make a decision on the planning of its cash management. La Planetaria, S.A. Income Statement 2020 Sales.................................................... $35'112,356.84 Cost of Sales.................................. 18'960,672.69 Gross Profit....................................... $16'151,684.15 Operating Expenses.......................... 7'258,741.36 Operating Income......................... $ 8'892,942.79 Financial Expenses.............................. 2'940,168.18 UAIR(Integrated Risk Management…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
The KEY to Understanding Financial Statements; Author: Accounting Stuff;https://www.youtube.com/watch?v=_F6a0ddbjtI;License: Standard Youtube License