INTERMEDIATE ACCOUNTING
INTERMEDIATE ACCOUNTING
8th Edition
ISBN: 9780078025839
Author: J. David Spiceland
Publisher: McGraw-Hill Education
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Chapter 21, Problem 21.5BYP

1.

To determine

Statement of cash flows: It is one of the financial statement that shows the cash and cash equivalents of a company for a particular period. It determines the net changes in cash through reporting the sources and uses of cash due to the operating, investing, and financing activities of a company.

To Determine: The missing amounts.

1.

Expert Solution
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Explanation of Solution

a.

Determine the amount of beginning balance cash:

Ending balanceof cash}     =( Beginning balance of cash +Net increase in cash )Beginning balanceof cash}=(Ending balance of cash Net increase in cash )Beginning balanceof cash}=$360 $183Beginning balanceof cash}=$177

b.

Determine the amount of ending balance of accounts receivable:

Ending balance of accounts receivable} =( Beginning balance of accounts receivable + SalesCash collection )Ending balance of accounts receivable} =( Beginning balance of accounts receivable + SalesCash collection )Ending balance of accounts receivable} =($252 + $240$213)Ending balance of accounts receivable} =$279

c.

Calculate the amount of beginningbalance inventory:

Step 1: Calculate the amount of purchase.

Ending balance accountspayable } =[( Beginning balance accounts payable + Purchase)Cash paid to suppliers]Purchase =[( Ending balance of  accounts payable + Beginning accounts payable)Cash paid to suppliers]Purchase =[($120+90)$90]Purchase =$210$90Purchase =$120

Step 2: Calculate the amount of beginning balance inventory.

Cost of goods sold    =[(Beginning balance of inventory+ Purchases)Ending inventory]Beginning balance of inventory}=[(Cost of goods sold +Ending balance of inventory) Purchases]Beginning balanceof inventory}=[($96+$180)$120]Beginning balanceof inventory}=$156

d.

Calculate the amount of beginning balance accumulated depreciation:

Ending balance of accumulated depreciation}  =[(Beginning balance of accumulateddepreciation + Depreciation expense)Accumulated depreciation on equipment sold]Beginning balance ofaccumulated depreciation}=[(Ending balance of accumulated depreciationDepreciation expense )+ Accumulated depreciation on equipment sold]Beginning balance ofaccumulated depreciation}=[($120$30)+$75]Beginning balance ofaccumulated depreciation}=$165

e.

Calculate the amount of beginning balance of income tax payable:

Ending balance of income tax payable}  =[(Beginning balance of balance of income tax payable + Income tax expense)Income tax payable]Beginning balance ofincometax payable}=[(Ending balance of income tax payableIncome tax expense)+Income tax payable]Beginning balance ofincometax payable}=[($66$21)+$27]Beginning balance ofincometax payable}=$72

f.

Calculate the amount of ending balance of retained earnings:

Ending balance ofretained rarnings }[(Beginning balance of retained earnings+ Net income) Dividends paid]Ending balance ofretained rarnings }=[(Beginning balance of retained earnings+ Net income) Dividends paid]Ending balance ofretained rarnings }($141+$84)$9Ending balance ofretained rarnings }$216

The balance sheet of D Industries is recreated using the deduced figures.

D Industries
Comparative balance sheet
At December 31
Assets: 2016 (all $ in millions) 2015 (all $ in millions)
Cash 360 177
Accounts receivable (net) 279 252
Inventory 180 156
Property, plant, and equipment 450 600
Less: Accumulated depreciation (120) (165)
Total assets $1,149 $1,020
Liabilities and shareholders’ equity:    
Accounts payable 120 90
General and administrative expenses payable 27 27
Income taxes payable 66 72
Common stock 720 690
Retained earnings 216 141
Total liabilities and shareholders’ equity $1,149 $1,020

Table (1)

2.

To determine

To Prepare: A Statement of Cash flow from operating activities for D Industries for the year December 31, 2016.

2.

Expert Solution
Check Mark

Explanation of Solution

Step 1: Prepare the schedule in the changes of current assets and liabilities.

INTERMEDIATE ACCOUNTING, Chapter 21, Problem 21.5BYP

Figure (1)

Step2: Prepare a Statement of Cash flow from operating activities for D Industries for the year December 31, 2016:

D Industries
Statement of cash flows (Partial)
For the year ended December 31, 2016
Cash flows from operating activities Amount (All $ in millions) Amount (All $ in millions)
Net income   84
Adjustments to reconcile net income to net cash from operating activities:    
Depreciation expense 30  
Gain on sale of equipment (45) (15)
Changes in operating assets and liabilities:    
Increase in accounts receivable (27)  
Increase in inventory (24)  
Increase in accounts payable 30  
Decrease in income taxes payable (6) (27)
Net cash provided from operating activities   $42

Table (2)

The statement of cash flow of D Industries shows the cash flows from operating activities to be $42 million

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Chapter 21 Solutions

INTERMEDIATE ACCOUNTING

Ch. 21 - Perhaps the most noteworthy item reported on an...Ch. 21 - Prob. 21.12QCh. 21 - Given sales revenue of 200,000, how can it be...Ch. 21 - Prob. 21.14QCh. 21 - When determining the amount of cash paid for...Ch. 21 - Prob. 21.16QCh. 21 - When using the indirect method of determining net...Ch. 21 - Prob. 21.18QCh. 21 - Prob. 21.19QCh. 21 - Where can we find authoritative guidance for the...Ch. 21 - U.S. GAAP designates cash outflows for interest...Ch. 21 - Prob. 21.1BECh. 21 - Prob. 21.2BECh. 21 - Prob. 21.3BECh. 21 - Prob. 21.4BECh. 21 - Prob. 21.5BECh. 21 - Prob. 21.6BECh. 21 - BE 21–7 Installment note LO21–3, LO21–6 On...Ch. 21 - BE 21–8 Sale of land LO21–3, LO21–4, LO21–5 On...Ch. 21 - Investing activities LO215 Carter Containers sold...Ch. 21 - Financing activities LO216 Refer to the situation...Ch. 21 - Prob. 21.11BECh. 21 - Prob. 21.12BECh. 21 - Classification of cash flows LO213 through LO216...Ch. 21 - Determine cash paid to suppliers of merchandise ...Ch. 21 - Determine cash received from customers LO213...Ch. 21 - Prob. 21.4ECh. 21 - Prob. 21.5ECh. 21 - Prob. 21.6ECh. 21 - Determine cash paid for bond interest LO213...Ch. 21 - Determine cash paid for bond interest LO213 For...Ch. 21 - Determine cash paid for income taxes LO213...Ch. 21 - Prob. 21.10ECh. 21 - E21–11 Bonds; statement of cash flow...Ch. 21 - E21–12 Installment note: statement of cash flow...Ch. 21 - Prob. 21.13ECh. 21 - E 21–14 Identifying cash flows from investing...Ch. 21 - E 21–15 Lease; lessee; statement of cash flows...Ch. 21 - Prob. 21.16ECh. 21 - Indirect method; reconciliation of net income to...Ch. 21 - Prob. 21.18ECh. 21 - Prob. 21.19ECh. 21 - Prob. 21.20ECh. 21 - Prob. 21.21ECh. 21 - Indirect method; reconciliation of net income to...Ch. 21 - Prob. 21.23ECh. 21 - Prob. 21.24ECh. 21 - Prob. 21.25ECh. 21 - Prob. 21.26ECh. 21 - Prob. 21.27ECh. 21 - Prob. 21.28ECh. 21 - Prob. 21.29ECh. 21 - Prob. 21.30ECh. 21 - Prob. 21.31ECh. 21 - Prob. 21.32ECh. 21 - Prob. 1CPACh. 21 - Prob. 2CPACh. 21 - Prob. 3CPACh. 21 - Prob. 4CPACh. 21 - Prob. 5CPACh. 21 - Prob. 6CPACh. 21 - Prob. 7CPACh. 21 - Prob. 8CPACh. 21 - Prob. 9CPACh. 21 - Prob. 1CMACh. 21 - Prob. 2CMACh. 21 - Prob. 3CMACh. 21 - Prob. 21.1PCh. 21 - Prob. 21.2PCh. 21 - Prob. 21.3PCh. 21 - Prob. 21.4PCh. 21 - Prob. 21.5PCh. 21 - Prob. 21.6PCh. 21 - Prob. 21.7PCh. 21 - Prob. 21.8PCh. 21 - Prob. 21.9PCh. 21 - Prob. 21.10PCh. 21 - Prob. 21.11PCh. 21 - Prob. 21.12PCh. 21 - Prob. 21.13PCh. 21 - Prob. 21.14PCh. 21 - Prob. 21.15PCh. 21 - Prob. 21.16PCh. 21 - Prob. 21.17PCh. 21 - Prob. 21.18PCh. 21 - Prob. 21.19PCh. 21 - Prob. 21.20PCh. 21 - Prob. 21.21PCh. 21 - Prob. 21.1BYPCh. 21 - Prob. 21.2BYPCh. 21 - Prob. 21.3BYPCh. 21 - Prob. 21.5BYPCh. 21 - Prob. 21.6BYPCh. 21 - Prob. 21.7BYPCh. 21 - Prob. 21.8BYPCh. 21 - Prob. 21.10BYPCh. 21 - Research Case 219 FASB codification; locate and...Ch. 21 - IFRS Case 2110 Statement of cash flows...
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