Corporate Financial Accounting
14th Edition
ISBN: 9781305653535
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Textbook Question
Chapter 13, Problem 13.5APR
Statement of
The comparative balance sheet of Livers Inc. for December 31, 20Y3 and 20Y2 is as follows:
Dec. 31, 20Y3 | Dec. 31, 20Y2 | |
Assets |
||
Cash | $ 155,000 | $ 150,000 |
Accounts receivable (net) | 450,000 | 400,000 |
Inventories | 770,000 | 750,000 |
Investments | 0 | 100,000 |
Land | 500,000 | 0 |
Equipment | 1,400,000 | 1,200,000 |
Accumulated |
(600,000) | (500,000) |
Total assets Liabilities and |
$2,675,000 | $2,100,000 |
Accounts payable (merchandise creditors) | $ 340,000 | $ 300,000 |
Accrued expenses payable (operating expenses) | 45,000 | 50,000 |
Dividends payable | 30,000 | 25,000 |
Common stock, $4 par | 700,000 | 600,000 |
Paid-in capital: Excess of issue price over par—common stock | 200,000 | 175,000 |
1,360,000 | 950,000 | |
Total liabilities and stockholders' equity | $2,675,000 | $2,100,000 |
The income statement for the year ended December 31, 20Y3, is as follows:
Sales | $ 3,000,000 | |
Cost of goods sold | 1,400,000 | |
Gross profit | $ 1,600,000 | |
Operating expenses: | ||
Depreciation expense | $ 100,000 | |
Other operating expenses. | 950,000 | |
Total operating expenses | 1,050,000 | |
Operating income | $550,000 | |
Gain on sale of investments | 75,000 | |
Income before income tax | $625,000 | |
Income tax expense | 125,00 | |
Net income | $ 500,000 |
Additional data obtained from an examination of the* accounts in the ledger for 20Y3 are as follows:
- A. The investments were sold for $175,000 cash.
- B. Equipment and land were acquired for cash.
- C. There were no disposals of equipment during the year.
- D. The common stock was issued for cash.
- E. There was a $90,000 debit to Retained Earnings for cash dividends declared.
Instructions
Prepare a .statement of cash flows, using the direct method of presenting cash flows from operating activities.
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Chapter 13 Solutions
Corporate Financial Accounting
Ch. 13 - What is the principal disadvantage of the direct...Ch. 13 - What are the major advantages of the indirect...Ch. 13 - A corporation issued 2,000,000 of common stock in...Ch. 13 - A retail business, using the accrual method of...Ch. 13 - If salaries payable was 100,000 at the beginning...Ch. 13 - Prob. 6DQCh. 13 - A corporation issued 2,000,000 of 20-year bonds...Ch. 13 - Fully depreciated equipment costing 50,000 was...Ch. 13 - Prob. 9DQCh. 13 - Name five common major classes of operating cash...
Ch. 13 - Classifying cash flows Identify whether each of...Ch. 13 - Adjustments to net incomeindirect method Ripley...Ch. 13 - Prob. 13.3BECh. 13 - Prob. 13.4BECh. 13 - Prob. 13.5BECh. 13 - Common stock transactions on the statement of cash...Ch. 13 - Appendix 2 Cash received from customersdirect...Ch. 13 - Reporting changes in equipment on statement of...Ch. 13 - Prob. 13.1EXCh. 13 - Effect of transactions on cash flows State the...Ch. 13 - Classifying cash flows Identify the type of cash...Ch. 13 - Prob. 13.4EXCh. 13 - Cash flows from operating activities indirect...Ch. 13 - Prob. 13.6EXCh. 13 - Cash flows from operating activitiesindirect...Ch. 13 - Prob. 13.8EXCh. 13 - Prob. 13.9EXCh. 13 - Prob. 13.10EXCh. 13 - Determining cash payments to stockholders The...Ch. 13 - Prob. 13.12EXCh. 13 - Reporting land acquisition for cash and mortgage...Ch. 13 - Reporting issuance and retirement of long-term...Ch. 13 - Prob. 13.15EXCh. 13 - Prob. 13.16EXCh. 13 - Statement of cash flowsindirect method The...Ch. 13 - Statement of cash flowsindirect method List the...Ch. 13 - Prob. 13.19EXCh. 13 - Prob. 13.20EXCh. 13 - Prob. 13.21EXCh. 13 - Prob. 13.22EXCh. 13 - Statement of cash flowsindirect method The...Ch. 13 - Prob. 13.2APRCh. 13 - Prob. 13.3APRCh. 13 - Prob. 13.4APRCh. 13 - Statement of cash flows direct method applied to...Ch. 13 - Prob. 13.1BPRCh. 13 - Prob. 13.2BPRCh. 13 - Prob. 13.3BPRCh. 13 - Prob. 13.4BPRCh. 13 - Statement of cash flowsdirect method applied to PR...Ch. 13 - Prob. 13.1ADMCh. 13 - Prob. 13.2ADMCh. 13 - Prob. 13.3ADMCh. 13 - Priceline: Free cash flow Priceline Group, Inc. is...Ch. 13 - Ethics in Action Head Donuts Inc. is a retailer of...Ch. 13 - Prob. 13.3TIF
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- Statement of cash flowsdirect method applied to PR 13-1A The comparative balance sheet of Livers Inc. for December 31, 20Y3 and 20Y2, is as follows: Additional data obtained from an examination of the accounts in the ledger for 20Y3 are as follows: A. The investments were sold for 175,000 cash. B. Equipment and land were acquired for cash. C. There were no disposals of equipment during the year. D. The common stock was issued for cash. E. There was a 90,000 debit to Retained Earnings for cash dividends declared. Instructions Prepare a statement of cash flows, using the direct method of presenting cash flows from operating activities.arrow_forwardStatement of cash flows indirect method The comparative balance sheet of Harris Industries Inc. at December 31, 20Y4 and 20Y3, is as follows: Dec. 31, 20Y4 Dec. 31, 20Y3 Assets Cash 443,240 360,920 Accounts receivable {net 665,280 592,200 Inventories 887,880 1,022,560 Prepaid expenses 31,640 25,200 Land 302,400 302,400 Buildings 1,713,600 1,134,000 Accumulated depreciationbuildings (466,200) (414,540) Machinery and equipment 781,200 781,200 Accumulated depreciationmachinery and equipment (214,200) (191,520) Patents 106,960 112,000 Total assets 4,251,800 3,724,420 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors|) 837,480 927,080 Dividends payable 32,760 25,200 Salaries payable 78,960 87,080 Mortgage note payable, due in nine years 224,000 0 Bonds payable 0 390,000 Common stock, 5 par 200,400 50,400 Paid-in capital. Excess of issue price over parcommon stock 366,000 126,000 Retained earnings 2,512,200 2,118,660 Total liabilities and stockholders' equity 4,251,800 3,724,420 An examination of the income statement and the accounting records revealed the following additional information applicable to 20Y4: A. Net income, 524,580. B. Depreciation expense reported on the income statement: buildings, 51,660; machinery and equipment, 22,680. C. Patent amortization reported on the income statement, 5,040. D. A building was constructed for 579,600. E. A mortgage note for 224,000 was issued for cash. F. 30,000 shares of common stock were issued at 13 in exchange for the bonds payable. G. Cash dividends declared, 131,040. Instructions Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities.arrow_forward
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The KEY to Understanding Financial Statements; Author: Accounting Stuff;https://www.youtube.com/watch?v=_F6a0ddbjtI;License: Standard Youtube License