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 14.5BPR
Statement of
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 |
(99,110) | (84,320) | |
Total assets | $1,2’1,760 | $ | 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 par—common stock | 354,000 | 204,000 | |
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.
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Check out a sample textbook solutionChapter 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 14-1A 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 depreciationequipment (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 parcommon stock 417,500 280,000 Retained earnings 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.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_forwardStatement 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_forward
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