Fundamentals of Financial Accounting - With Access
5th Edition
ISBN: 9781259695858
Author: PHILLIPS
Publisher: MCG
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Textbook Question
Chapter 12, Problem 12.3CP
Preparing a Statement of
Hunter Company is developing its annual financial statements at December 31, 2015. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statement are summarized:
2015 | 2014 | |
Balance Sheet at December 31 | ||
Cash | $ 44,000 | $ 18,000 |
Accounts Receivable | 27,000 | 29,000 |
Inventory | 30,000 | 36,000 |
Equipment | 111,000 | 102,000 |
Accumulated |
(36,000) | (30,000) |
$176,000 | $155,000 | |
Accounts Payable | $ 25,000 | $ 22,000 |
Salaries and Wages Payable | 800 | 1,000 |
Note Payable (long-term) | 38,000 | 48,000 |
Common Stock | 80,000 | 60,000 |
32,200 | 24,000 | |
$176,000 | $155,000 | |
Income Statement for 2015 | ||
Sales Revenue | $100,000 | |
Cost of Goods Sold | 61,000 | |
Other Expenses | 27,000 | |
Net Income | $ 12,000 |
Additional Data:
- a. Bought equipment for cash, $9,000.
- b. Paid $10,000 on the long-term note payable.
- c. Issued new shares of stock for $20,000 cash.
- d. Declared and paid a $3,800 cash dividend.
- e. Other expenses included depreciation, $6,000; salaries and wages, $10,000; taxes, $3,000; utilities, $8,000.
- f. Accounts Payable includes only inventory purchases made on credit. Because there are no liability accounts relating to taxes or other expenses, assume that these expenses were fully paid in cash.
Required:
- 1. Prepare the statement of cash flows for the year ended December 31, 2015, using the indirect method.
- 2. Use the statement of cash flows to evaluate Hunter’s cash flows.
TIP: Demonstration Case A provides a good example of information to consider when evaluating cash flows.
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Fundamentals of Financial Accounting - With Access
Ch. 12 - Compare the purposes of the income statement, the...Ch. 12 - Prob. 2QCh. 12 - Prob. 3QCh. 12 - What are the major categories of business...Ch. 12 - Prob. 5QCh. 12 - Describe the types of items used to compute cash...Ch. 12 - Under the indirect method, depreciation expense is...Ch. 12 - Prob. 8QCh. 12 - Explain why a 50,000 increase in inventory during...Ch. 12 - Prob. 10Q
Ch. 12 - As a junior analyst, you are evaluating the...Ch. 12 - Prob. 12QCh. 12 - Prob. 13QCh. 12 - Prob. 14QCh. 12 - (Supplement 12A) How is the sale of equipment...Ch. 12 - Prob. 1MCCh. 12 - Prob. 2MCCh. 12 - Prob. 3MCCh. 12 - Prob. 4MCCh. 12 - Which of the following would not appear in the...Ch. 12 - Prob. 6MCCh. 12 - Prob. 7MCCh. 12 - Prob. 8MCCh. 12 - The total change in cash as shown near the bottom...Ch. 12 - Prob. 10MCCh. 12 - Prob. 12.1MECh. 12 - Matching Items Reported to Cash Flow Statement...Ch. 12 - Determining the Effects of Account Changes on Cash...Ch. 12 - Computing Cash Flows from Operating Activities...Ch. 12 - Prob. 12.5MECh. 12 - Computing Cash Flows from Investing Activities...Ch. 12 - Computing Cash Flows from Financing Activities...Ch. 12 - Computing Cash Flows Under IFRS Using the data...Ch. 12 - Prob. 12.9MECh. 12 - Interpreting Cash Flows from Operating, Investing,...Ch. 12 - Matching Items Reported to Cash Flow Statement...Ch. 12 - Computing Cash Flows from Operating Activities...Ch. 12 - Prob. 12.13MECh. 12 - Matching items Reported to Cash Flow Statement...Ch. 12 - Prob. 12.2ECh. 12 - Prob. 12.3ECh. 12 - Prob. 12.4ECh. 12 - Prob. 12.5ECh. 12 - Prob. 12.6ECh. 12 - Prob. 12.7ECh. 12 - Prob. 12.8ECh. 12 - Reporting and Interpreting Cash Flows from...Ch. 12 - Prob. 12.10ECh. 12 - Prob. 12.11ECh. 12 - Inferring Balance Sheet Changes from the Cash Flow...Ch. 12 - Prob. 12.13ECh. 12 - Prob. 12.14ECh. 12 - Prob. 12.15ECh. 12 - Prob. 12.16ECh. 12 - Prob. 12.17ECh. 12 - Prob. 12.18ECh. 12 - Prob. 12.19ECh. 12 - Prob. 12.20ECh. 12 - Prob. 12.21ECh. 12 - Prob. 12.22ECh. 12 - (Supplement 12B) Preparing a Statement of Cash...Ch. 12 - Determining Cash Flow Statement Effects of...Ch. 12 - Prob. 12.2CPCh. 12 - Preparing a Statement of Cash Flows (Indirect...Ch. 12 - Preparing and Interpreting a Statement of Cash...Ch. 12 - Prob. 12.5CPCh. 12 - Prob. 12.6CPCh. 12 - (Supplement 12A) Preparing and Interpreting a...Ch. 12 - Prob. 12.1PACh. 12 - Prob. 12.2PACh. 12 - Prob. 12.3PACh. 12 - Preparing and Interpreting a Statement of Cash...Ch. 12 - Computing Cash Flows from Operating Activities...Ch. 12 - Prob. 12.6PACh. 12 - (Supplement 12A) Preparing and Interpreting a...Ch. 12 - Prob. 12.1PBCh. 12 - Prob. 12.2PBCh. 12 - Prob. 12.3PBCh. 12 - Preparing and Interpreting a Statement of Cash...Ch. 12 - Prob. 12.5PBCh. 12 - Prob. 12.6PBCh. 12 - Prob. 12.1SDCCh. 12 - Prob. 12.2SDCCh. 12 - Prob. 12.6SDCCh. 12 - Prob. 12.7SDCCh. 12 - Prob. 12.8SDCCh. 12 - Prob. 12.9SDCCh. 12 - Prob. 12.1CC
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