FINANCIAL AND MANAGERIAL ACCOUNTING
9th Edition
ISBN: 9781264898732
Author: Wild
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Question
Chapter 12, Problem 11E
(a)
To determine
Introduction: Reconstruction of
To prepare: A reconstruction entry.
(b)
To determine
Introduction: Cash flow from investing activities is a section of the cash flow statement that shows the cash generated through the investing activities. Investing activities do not include Cash related to nominal business operations.
The effect on cash flow statement.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
For each of the following separate transactions, (a) prepare the reconstructed journal entry and (b) identify the effect it has, if any, on the investing section or financing section of the statement of cash flows. 1. Sold a building costing $30,000, with $20,000 of accumulated depreciation, for $8,000 cash, resulting in a $2,000 loss. 2. Acquired machinery worth $10,000 by issuing $10,000 in notes payable. 3. Issued 1,000 shares of common stock at par for $2 per share. 4. Notes payable with a carrying value of $40,000 were retired for $47,000 cash, resulting in a $7,000 loss.
On the basis of the details of the following fixed asset account, indicate the items to be reported on the statement of cash flows:
Date
Item
Debit
Credit
BalanceDebit
BalanceCredit
January 1
Balance
1,131,000
March 12
Purchased for cash
385,000
1,516,000
October 4
Sold for $211,000
181,000
1,335,000
Item
Section of Statement ofCash Flows
Added or Deducted
Amount
March 12: Purchase of fixed asset
$fill in the blank 3
October 4: Sale of fixed asset
$fill in the blank 6
Gain on sale of fixed asset (assume the indirect method)
$fill in the blank 9
Equipment that had been acquired several years ago by a special revenue fund at a cost of $40,000 was sold for $15,000 cash. Accumulated depreciation of $30,000 existed at the time of the sale.
What would be journal entry that should be made in the special revenue fund (in debit and credit form)?
Chapter 12 Solutions
FINANCIAL AND MANAGERIAL ACCOUNTING
Ch. 12 - Prob. 1QSCh. 12 - Prob. 2QSCh. 12 - Prob. 3QSCh. 12 - Prob. 4QSCh. 12 - Prob. 5QSCh. 12 - Prob. 6QSCh. 12 - Prob. 7QSCh. 12 - Prob. 8QSCh. 12 - Prob. 9QSCh. 12 - Prob. 10QS
Ch. 12 - Prob. 11QSCh. 12 - Prob. 12QSCh. 12 - Prob. 13QSCh. 12 - Prob. 14QSCh. 12 - Prob. 15QSCh. 12 - Prob. 16QSCh. 12 - Prob. 17QSCh. 12 - Prob. 18QSCh. 12 - Prob. 19QSCh. 12 - Prob. 20QSCh. 12 - Prob. 21QSCh. 12 - Prob. 22QSCh. 12 - Prob. 23QSCh. 12 - Prob. 24QSCh. 12 - Prob. 25QSCh. 12 - Prob. 26QSCh. 12 - Prob. 27QSCh. 12 - Prob. 28QSCh. 12 - Prob. 1ECh. 12 - Prob. 2ECh. 12 - Prob. 3ECh. 12 - Prob. 4ECh. 12 - Prob. 5ECh. 12 - Prob. 6ECh. 12 - Prob. 7ECh. 12 - Prob. 8ECh. 12 - Prob. 9ECh. 12 - Prob. 10ECh. 12 - Prob. 11ECh. 12 - Prob. 12ECh. 12 - Prob. 13ECh. 12 - Prob. 14ECh. 12 - Prob. 15ECh. 12 - Prob. 16ECh. 12 - Prob. 17ECh. 12 - Prob. 18ECh. 12 - Prob. 19ECh. 12 - Prob. 20ECh. 12 - Prob. 21ECh. 12 - Prob. 22ECh. 12 - Prob. 1PSACh. 12 - Prob. 2PSACh. 12 - Prob. 3PSACh. 12 - Prob. 4PSACh. 12 - Prob. 5PSACh. 12 - Prob. 6PSACh. 12 - Prob. 7PSACh. 12 - Prob. 8PSACh. 12 - Prob. 1PSBCh. 12 - Prob. 2PSBCh. 12 - Prob. 3PSBCh. 12 - Prob. 4PSBCh. 12 - Prob. 5PSBCh. 12 - Prob. 6PSBCh. 12 - Prob. 7PSBCh. 12 - Prob. 8PSBCh. 12 - Prob. 12SPCh. 12 - Prob. 1.1AACh. 12 - Prob. 1.2AACh. 12 - Prob. 1.3AACh. 12 - Prob. 1.4AACh. 12 - Prob. 2.1AACh. 12 - Prob. 2.2AACh. 12 - Prob. 2.3AACh. 12 - Prob. 3.1AACh. 12 - Prob. 3.2AACh. 12 - Prob. 3.3AACh. 12 - Prob. 1DQCh. 12 - Prob. 2DQCh. 12 - Prob. 3DQCh. 12 - Prob. 4DQCh. 12 - Prob. 5DQCh. 12 - Prob. 6DQCh. 12 - Prob. 7DQCh. 12 - Prob. 8DQCh. 12 - Prob. 9DQCh. 12 - Prob. 10DQCh. 12 - Prob. 11DQCh. 12 - Prob. 1BTNCh. 12 - Prob. 2BTNCh. 12 - Prob. 3BTNCh. 12 - Prob. 5BTN
Knowledge Booster
Similar questions
- An analysis of the general ledger accounts indicates that delivery equipment, which cost P80,000 and on which accumulated depreciationtotaled 36,000 on the date of sale, was sold for P37,200 during the year. Using this information, indicate the items to be reported on thestatement of cash flowsarrow_forwardPrepare the journal entry for the following transactions (1) Geysler Company sold some old equipment that initially cost $30, 000 and had $25,000 of accumulated depreciation and received cash in the amount of $3,000. (2) Assume the facts except Geysler received $9,000.arrow_forwardEstimate the average total estimated useful life of depreciable property, plant, and equipment. Starbucks reports 580.6 million of depreciation and amortization in the statement of cash flows, of which 4.5 million relates to amortization of limited-life intangible assets. Does the estimate reconcile with stated accounting policy on useful lives for property, plant, and equipment? Explain.arrow_forward
- 7. A company purchased a POS cash register on January 1 for RM5,400. This register has a useful life of 10 years and a salvage value of RM400. What would be the depreciation expense for the second-year of its useful life using the double-declining-balance method? a. RM864 b. RM812 c. RM800 d. RM755 8. Which of the following is NOT an activity listed in the statement of cash flows? a. Investing Activities b. Financing Activities c. Operating Activities d. Funding Activities 9. Which of the following is an example of a deferral? a. Accruing year-end wages b. Recording prepaid rent c. Recognizing revenues earned but not yet recorded d. Recognizing expenses incurred but not yet recorded 10. Deciding whether to record a sale when the order for services is received or when the services are performed is an example of a a. recognition b. valuation issue. c. classification d. communicationarrow_forwardPrint Item Use the following information from Albuquerque Company's financial statements: Net income $328,000 Change in accumulated depreciation (no sale of depreciable assets this year) 26,200 Loss on sale of company truck 9,500 Determine operating net cash flows (indirect method).arrow_forwardOn the basis of the details of the following fixed asset account, indicate the items to be reported on the statement of cash flows: ACCOUNT Land ACCOUNT NO. Balance Date Item Debit Credit Debit Credit Jan. 1 Balance 1,003,000 Mar. 12 Purchased for cash 301,000 1,304,000 Oct. 4 Sold for $165,000 141,000 1,163,000 Item Section of Statement ofCash Flows Added or Deducted Amount Mar. 12: Purchase of fixed asset Oct. 4: Sale of fixed asset Gain on sale of fixed asset (assume the indirect method)arrow_forward
- Equipment that had been acquired several years ago by a special revenue fund at a cost of $40,000 was sold for $15,000 cash. Accumulated depreciation of $30,000 existed at the time of the sale. The journal entry to be made in the special revenue fund will include Multiple Choice A credit to Gain on Sale of Equipment. A debit to Accumulated Depreciation. A credit to Equipment. A credit to Other Financing Sources-Proceeds of Sale of Assets.arrow_forward! Required information [The following information applies to the questions displayed below.] At the beginning of Year 1, Copeland Drugstore purchased a new computer system for $95,000. It is expected to have a five-year life and a $15,000 salvage value. b. Record the purchase of the computer system and the depreciation expense for the first year under straight-line and double- declining-balance methods in a horizontal statements model. (In the Statement of Cash Flows column, use the initials OA to designate operating activity, IA for investing activity, and FA for financing activity. Leave blank to indicate that an element is not affected by the event. Enter any decreases to account balances and cash outflows with a minus sign.) Cash Assets + + Balance Sheet + Book Value of Computer Straight-line depreciation - 11 11 Double-declining-balance depreciation = COPELAND DRUGSTORE Horizontal Statements Model Stockholders' Equity Retained Earnings Revenue Income Statement I I Expenses = = =…arrow_forward) Provide an accurate, full and complete explanation and implication of the information presented in (mathematical forms) by explaining the significance of the cash flow statement The net income reported on the income statement for the current year was $128,000. Depreciation recorded on store equipment for the year amounted to $21,100. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year Cash $51,200 $47,100 Accounts receivable (net) 36,710 34,810 Merchandise inventory 50,120 52,990 Prepaid expenses 5,630 4,470 Accounts payable (merchandise creditors) 47,970 44,560 Wages payable 26,210 29,110arrow_forward
- Using the Exhibit below, assume that the depreciation expense on the Income Statement for the year was $38,000. When preparing the Statement of Cash Flow using the indirect method for the current year, which of the following statements would describe the proper presentation of depreciation expense on the Cash flow from operating activities section? EXHIBIT Increase (Decrease) Net Income (loss) $XXX Adjustments to reconcile net income to net cash flow from operating activities: Depreciation of fixed assets XXX Losses on disposal of assets XXX Gains on disposal of assets (XXX) Changes in current operating assets and liabilities:…arrow_forwardIndicate the effect each separate transaction has on investing cash flows. a. Sold a truck costing $40,000, with $22,000 of accumulated depreciation, for $8,000 cash. The sale results in a $10,000 loss. b. Sold a machine costing $10,000, with $8,000 of accumulated depreciation, for $5,000 cash. The sale results in a $3,000 gain. c. Purchased stock investments for $16,000 cash. The purchaser believes the stock is worth at least $30,000.arrow_forwardBelow are the most recent balance sheets for Country Kettles, Incorporated. Excluding accumulated depreciation, determine whether each item is a source or a use of cash, and the amount. (Input all amounts as positive values.) Assets Cash COUNTRY KETTLES, INCORPORATED Balance Sheets 2019 $ 30,900 70,400 61,300 152,000 46,320 Accounts receivable Inventories Property, plant, and equipment Less: Accumulated depreciation Total assets Liabilities and Equity Accounts payable Accrued expenses Long-term debt Common stock Item Cash Accounts receivable Inventories Property, plant, and equipment Accounts payable $ 47,540 6,020 26,100 28,750 21,000 25,500 Accumulated retained earnings 169,000 170,610 Total liabilities and equity $ 268,280 $278,420 Accrued expenses Long-term debt Common stock Accumulated retained earnings 2020 $ 30,040 73,480 $ 268,280 $278,420 $ 45,400 6,780 63,500 161,800 50,400 Source/Use Amountarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Financial Reporting, Financial Statement Analysis...FinanceISBN:9781285190907Author:James M. Wahlen, Stephen P. Baginski, Mark BradshawPublisher:Cengage Learning
Excel Applications for Accounting PrinciplesAccountingISBN:9781111581565Author:Gaylord N. SmithPublisher:Cengage Learning
College Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,Century 21 Accounting Multicolumn JournalAccountingISBN:9781337679503Author:GilbertsonPublisher:Cengage
Financial Reporting, Financial Statement Analysis...
Finance
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:Cengage Learning
Excel Applications for Accounting Principles
Accounting
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Cengage Learning
College Accounting, Chapters 1-27
Accounting
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:Cengage Learning,
Century 21 Accounting Multicolumn Journal
Accounting
ISBN:9781337679503
Author:Gilbertson
Publisher:Cengage