Financial & Managerial Accounting
13th Edition
ISBN: 9781285866307
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Textbook Question
Chapter 14, Problem 14.5APR
Statement of
The comparative balance sheet of Cromme Inc. for December 31, 2016 and 2015, is as follows:
Dec. 31,2016 | Dec. 31,2015 | |
Assets | ||
Cash……………… | $ 625,760 | $ 585,920 |
Accounts receivable (net)…………………… | 227,840 | 208,960 |
Inventories……………………… | 641.760 | 617,120 |
Investments…………… | 0 | 240,000 |
Land…………………… | 328,000 | 0 |
Equipment……………………… | 705,120 | 553,120 |
Accumulated |
(166,400) | (148,000) |
Total assets……………………… | $2,362,080 | $2,057,120 |
Liabilities and Stockholders’ Equity | ||
Accounts payable (merchandise creditors)……………………… | $ 424,4B0 | $ 404.960 |
Accrued expenses payable (operating expenses) ……………………… | 42,240 | 52,640 |
Dividends payable……………………… | 24,000 | 19,200 |
Common stock, $2 par……………………… | 150,000 | 100,000 |
Paid in capital: Excess of issue price over par—common stock………………… | 417,500 | 280,000 |
1,303,860 | 1,200,320 | |
Total liabilities and stockholders’ equity……………………… | $2,362,080 | $2,057,120 |
The income statement for the year ended December 31, 2016, is as follows: | ||
Sales……………………… | $ 5,372,559 | |
Cost of merchandise sold……………………… | 3,306,190 | |
Gross profit……………………… | 52,066,369 | |
Operating expenses: Depreciation expense……………………… | $ 18,400 | |
Other operating expenses……………………… | 1,755,402 | |
Total operating expenses……………………… | 1,773,802 | |
Operating income……………………… | $ 292,567 | |
Other income: Gain on sale of investments……………………… | 40,000 | |
Income before income tax……………………… | $ 332,567 | |
Income tax expense……………………… | 133,027 | |
Net income……………………… | $ 199,540 |
Additional data obtained from an examination of the accounts in the ledger for 2016 are as follows:
- a. The investments were sold for $280,000 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 $96,000 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 14 Solutions
Financial & Managerial Accounting
Ch. 14 - Prob. 1DQCh. 14 - Prob. 2DQCh. 14 - A corporation issued 2,000,000 of common stock in...Ch. 14 - A retail business, using the accrual method of...Ch. 14 - If salaries payable was 100,000 at the beginning...Ch. 14 - Prob. 6DQCh. 14 - A corporation issued 2,000,000 of 20-year bonds...Ch. 14 - Fully depreciated equipment costing 50,000 was...Ch. 14 - Prob. 9DQCh. 14 - Name five common major classes of operating cash...
Ch. 14 - Prob. 14.1APECh. 14 - Classifying cash flows Identify whether each of...Ch. 14 - Prob. 14.2APECh. 14 - Prob. 14.2BPECh. 14 - Prob. 14.3APECh. 14 - Prob. 14.3BPECh. 14 - Prob. 14.4APECh. 14 - Prob. 14.4BPECh. 14 - Land transactions on the statement of cash flows...Ch. 14 - Land transactions on the statement of cash flows...Ch. 14 - Prob. 14.6APECh. 14 - Prob. 14.6BPECh. 14 - Prob. 14.7APECh. 14 - Prob. 14.7BPECh. 14 - Prob. 14.8APECh. 14 - Prob. 14.8BPECh. 14 - Prob. 14.1EXCh. 14 - Prob. 14.2EXCh. 14 - Classifying cash flows Identify the type of cash...Ch. 14 - Prob. 14.4EXCh. 14 - Prob. 14.5EXCh. 14 - Prob. 14.6EXCh. 14 - Prob. 14.7EXCh. 14 - Determining cash payments to stockholders The...Ch. 14 - Prob. 14.9EXCh. 14 - Reporting changes in equipment on statement of...Ch. 14 - Prob. 14.11EXCh. 14 - Prob. 14.12EXCh. 14 - Reporting land acquisition for cash and mortgage...Ch. 14 - Prob. 14.14EXCh. 14 - Prob. 14.15EXCh. 14 - Prob. 14.16EXCh. 14 - Prob. 14.17EXCh. 14 - Prob. 14.18EXCh. 14 - Prob. 14.19EXCh. 14 - Prob. 14.20EXCh. 14 - Prob. 14.21EXCh. 14 - Cash flows from operating activities direct method...Ch. 14 - Prob. 14.23EXCh. 14 - Prob. 14.24EXCh. 14 - Prob. 14.25EXCh. 14 - Prob. 14.26EXCh. 14 - Prob. 14.1APRCh. 14 - Statement of cash flowsindirect method The...Ch. 14 - Prob. 14.3APRCh. 14 - Prob. 14.4APRCh. 14 - Statement of cash flowsdirect method applied to PR...Ch. 14 - Prob. 14.1BPRCh. 14 - Prob. 14.2BPRCh. 14 - Prob. 14.3BPRCh. 14 - Prob. 14.4BPRCh. 14 - Statement of cash flowsdirect method applied to PR...Ch. 14 - Prob. 14.1CPCh. 14 - Prob. 14.2CPCh. 14 - Analysis of statement of cash flows Dillip Lachgar...Ch. 14 - Prob. 14.4CP
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- Statement of cash flowsdirect method applied to PR 14-1B The comparative balance sheet of Merrick Equipment Co. for Dec. 31, 2016 and 2015, is: Dec. 31,2016 Dec. 31.201S Assets Cash 70,720 47,940 Accounts receivable (net) 207,230 188,190 Inventories 298,520 289,850 Investments. 0 102,000 Land 295,800 0 Equipment 438,600 358,020 Accumulated depreciationequipment (99,110) (84,320) Total assets 1,21,760 901,680 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) 205,700 194,140 Accrued expenses payable (operating expenses! 30,600 26,860 Dividends payable 25,500 20,400 Common stock. Si par. 202,000 102,000 Paid in capital: Excess of issue price over parcommon stock 354,000 204,000 Retained earnings 393,960 354,280 Total liabilities and stockholders equity 1,211,760 901,680 The income statement for the year ended December 31, 2016, is as follows: Sales- 2,023,898 Cost of merchandise sold 1,245,476 Gross profit 778,422 Operating expenses: Depreciation expense 14,790 Other operating expenses 517,299 Total operating expenses 532,089 Operating income 246,333 Other expenses: Loss on sale of investments (10,200) Income before income tax 236,133 Income tax expense- 94,453 Net income- 141,680 Additional data obtained from an examination of the accounts in the ledger for 2016 are as follows: a. Equipment and land were acquired for cash. b. There were no disposals of equipment during the year. c. The investments were sold for 91,800 cash. d. The common stock was issued for cash. e. There was a 102,000 debit to Retained Laming 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 flowsindirect method The comparative balance sheet of Del Ray Enterprises Inc. at December 31, 2016 and 2015 is as follows: Dec 31,2016 Dec. 31,2015 Assets Cash 146.600 S 179,800 Accounts receivable (net).. 224,600 242,000 Merchandise inventory.. 321,600 299,200 Prepaid expenses.. 13,400 9,600 Equipment.. 655,000 537,000 Accumulated depreciationequipment.. (170,800) (132,200) Total assets.. 1,190,400 1,135,400 Liabilities and Stockholders Equity Accounts payable (merchandise creditors) .. 250,200 S 237,600 Mortgage note payable.. 0 336,000 Common stock, 10 par.. 74,000 24,000 Paid in capital: Excess of issue price over parcommon stock.. 470,000 320,000 Retained earnings.. 396,200 217,800 Total liabilities and stockholders equity.. 1,190,400 1,135,400 Additional data obtained from the income statement and from an examination of the accounts in the ledger for 2016 are as follows: a. Net income, 332,000 b. Depreciation reported on the income statement, 83,400 c. Equipment was purchased at a cost of 162,800 and fully depreciated equipment costing 44,800 was discarded, with no salvage realized. d. The mortgage note payable was not due until 2018 but the terms permitted earlier payment without penalty. e. 10,000 shares of common stock were issued at 20 for cash. f. Cash dividends declared and paid. 153,600 Instructions Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities.arrow_forward
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