hho8e ch13 append sm

Chapter 13 Appendix A

Appendix A: Short Exercises

(15 min.) S 13A-1

Req. 1

White Chocolate Inc.Statement of Cash Flows

Year Ended December 31, 2011Cash flows from operating activities:

Collections from customers $ 624,000Payments to suppliers and employees (413,000 )Net cash provided by operating

activities$ 211,000

Cash flows from investing activities:Purchase of equipment $(143,000 )Net cash used for investing activities (143,000)

Cash flows from financing activities:Payment of dividends $ (49,000 )Net cash used for financing activities (49,000 )

Net increase in cash $ 19,000Cash balance, beginning 52,000 Cash balance, ending $ 71,000

Chapter 13 The Statement of Cash Flows 905

(5 min.) S 13A-2

Req. 1

Stella’s Learning CenterStatement of Cash Flows (partial)

Year ended June 30, 2011Cash flows from operating activities:

Collections from customers $196,000Payments to suppliers (110,000)Payments to employees (68,000 )Net cash provided by operating

activities$18,000

Accounting 8/e Solutions Manual906

(15 min.) S 13A-3

Req. 1

Stella’s Learning CenterStatement of Cash Flows Year ended June 30, 2011

Cash flows from operating activities:Receipts:

Collections from customers $196,000 Total cash receipts 196,000

Payments:To suppliers (110,000)To employees (68,000 )

Total cash payments (178,000)Net cash provided by operating

activities $ 18,000

Cash flows from investing activities:Cash receipt from sale of land $ 61,000Purchase of equipment (37,000 )Net cash provided by investing

activities24,000

Cash flows from financing activities:Payment of note payable $ (34,000)Cash receipt from issuance of stock 20,000Payment of dividends (4,000 )Net cash used for financing activities (18,000 )

Net increase in cash $ 24,000


(15 min.) S 13A-4

Req. 1

a. Collections from customers = $136,000

Collections=

Sales− Increase in Accounts Receivable

from customers Revenue

$136,000 = $142,000 − $6,000 ($44,000 − $50,000)

Accounts ReceivableBeginning 44,000Sales 142,000 Collections 136,000Ending 50,000

b. Payments for inventory = $68,000

Payments forinventory

Cost ofDecrease ininventory

Increase inAccounts Payable

= goods − −sold

$68,000 = $79,000 − $7,000 − $4,000($82,000 − $75,000) ($46,000 − $42,000)


(10-15 min.) E 13A-5

Req. 1

O+ a. Collection of account F – i. Purchase of treasury stockreceivable

F+ b. Issuance of note payable F + j. Issuance of common stockto borrow cash for cash

N c. Depreciation O– k. Payment of account payable

F+ d. Issuance of preferred NIF l. Acquisition of building bystock for cash issuance of common stock

F– e. Payment of cash I– m. Purchase of equipmentdividend

I + f. Sale of land O– n. Payment of wages toemployees

NIF g. Acquisition of equipment O+ o. Collection of cash interest by issuing note payable

F– h. Payment of note payable I+ p. Sale of building


(5-10 min.) E 13A-6

Req. 1

a. Investing activities g. Operating activities

b. Investing activities h. Financing activities

c. Financing activities i. Financing activities

d. Noncash investing and j. Operating activitiesfinancing activities

e. Operating activities k. Investing activities

f. Financing activities l. Operating activities

(5-10 min.) E 13A-7

Req. 1

1. Payments of salaries and wages Included2. Depreciation Not Included3. Payment of interest Included4. Payment of dividends Not Included5. Collections from customers Included6. Net income Not Included7. Payment of income tax Included8. Collection of dividend revenue Included9. Payment to suppliers Included


(continued) E 13A-7

Req. 2

Cash flows from operating activities:Receipts:

Collections from customers $ 118,000Collection of dividend

revenue 5,000

Total cash receipts 123,000

Payments:To suppliers $(56,000)To employees (36,000)For interest (15,000)For income tax (13,000 )

Total cash payments (120,000)Net cash provided by operatingactivities $ 3,000


(5-10 min.) E 13A-8

Req. 1

Accounts Receivable: Report cash collections as an operating

cash flow in the amount of $36,000.

Land: Report the acquisition as an investing cash flow in the

amount of $16,000.

Long-Term Notes Payable: Report both the issuance of

$85,000 and the payment of long-term notes payable at $69,000

as a financing cash flow.


(20-30 min.) E 13A-9

Req. 1Rolling Hills CorporationStatement of Cash FlowsYear Ended June 30, 2010

Cash flows from operating activities:

Receipts:

Collections from customers

($228,000 + $14,500) $ 242,500

Dividends received 7,000

Total cash receipts 249,500

Payments:

To suppliers ($105,000 + $13,500) $(118,500)

To employees ($42,000 + $1,500) (43,500)

For income tax (9,500)

For interest (2,500 )

Total cash payments (174,000 )

Net cash provided by operating activities 75,500

Cash flows from investing activities:

Acquisition of plant assets $(100,000)

Cash receipt from sale of land 21,000

Net cash used for investing activities (79,000)

Cash flows from financing activities:

Cash receipt from issuance of common stock $ 38,000

Payment of long-term note payable (11,000)

Payments of dividends (10,500 )

Net cash provided by financing activities 16,500

Net increase in cash $ 13,000

Cash balance, June 30, 2009 20,000

Cash balance, June 30, 2010 $ 33,000


(10-15 min.) E 13A-10

Req. 1

$4,000 decrease ina. Cash collections = $60,000 + Accounts Receivable

($22,000 − $18,000)

= $64,000

Cash paymentsfor inventory

$4,000 decrease in $3,000 decrease inb. = $75,000 − Inventory + Accounts Payable

($25,000 − $21,000) ($11,000 − $8,000)

= $74,000


(20-30 min.) E 13A-11

(All amounts in millions)Increase in

Sales − Accounts Receivablea. Collections = $24,682 = $24,859 − ($798 − $621)

Cost Increase in Increase inb. Payments for of sales + Inventory − Accounts Payable

inventory = $18,590 = $18,121 + $653* − $184**__________*$3,483 − $2,830 = $653 **$1,546 − $1,362 = $184

Other Operating Increase inc. Payments for Expenses − Accrued Liabilities

operating = $4,342 = $4,432 − ($938 − $848)expenses

Beg. Prop. End. Prop.d. Acquisitions of & Equip., & Equip.,

property and Net + Acquisitions − Deprec. = Netequipment = $1,184 = $3,428 + X − $270 = $4,342

X = $1,184

Beg. End.LT Liab. + Borrowing = LT Liab

e. Borrowing = $10 = $467 + X = $477

X = $ 10

f. Cash receipt Beg. Common End. Commonfrom issuance Stock + Issuance = Stockof stock = $232 = $446 + X = $678

X = $232

Beg. Ret. Net End. Ret.g. Payment of Earnings + Income − Dividends = Earnings

dividends = $275 = $3,772 + $1,504 − X = $5,001

X = $275


Appendix A: Problems A

(35-45 min.) P 13A-12A

KTG, Inc.Statement of Cash Flows

Year Ended November 30, 2011

Cash flows from operating activities: Receipts: Collections from customers $ 605,300 Dividends received 4,200 Total cash receipts $ 609,500 Payments: To suppliers $(371,300) To employees (94,000) For interest (13,500) For income tax (39,000 ) Total cash payments (517,800 ) Net cash provided by operating activities 91,700

Cash flows from investing activities: Purchase of plant assets $(58,400) Cash receipt from sale of plant assets 22,500 Net cash used for investing activities (35,900)

Cash flows from financing activities: Cash receipt from issuance of notes payable $ 48,100 Cash receipt from issuance of common stock 68,900 Payment of notes payable (49,000) Payment of dividends (50,400 ) Net cash provided by financing activities 17,600 Net increase in cash $ 73,400 Cash balance, November 30, 2010 39,700 Cash balance, November 30, 2011 $ 113,100


(40 min.) P 13A-13A

Req. 1

The purpose of the cash flow statement is to show where cash

came from and how cash was spent during the period.

Req. 2

North American Reserve Rare CoinsIncome Statement

Year Ended December 31, 2010Sales revenue (2,900 × $300) $870,000Cost of goods sold 310,000Salary expense 96,000Depreciation expense ($46,000 / 5) 9,200Rent expense 11,000Income tax expense 16,000 Net income $ 427,800


(continued) P 13A-13A

Req. 3

North American Reserve Rare CoinsBalance Sheet

December 31, 2010ASSETS LIABILITIES

Current: Current:Cash $542,500* Accounts payableAccounts receivable ($240,000 −

$140,000)$100,000

(2,900 × $300 × .15) 130,500 Salary payable 5,000 Inventory 255,000 ** Total current

liabilities105,000

Total current assets 928,000STOCKHOLDERS’ EQUITY

Property, plant, and equipment: Common stock 475,000Store fixtures $46,000 Retained earningsLess

Accumulated($427,800 − $43,000) 384,800

depreciation (9,200 ) 36,800 859,800

Total liabilities andTotal assets $964,800 stockholders' equity $964,800

__________*$475,000 − $46,000 − $330,000 − $11,000 − $135,000 + $739,500 − $91,000 − $16,000 − $43,000 = $542,500.

**$330,000 + $235,000 – $310,000 = $255,000



Req. 4

North American Reserve Rare CoinsStatement of Cash Flows

Year Ended December 31, 2010Cash flows from operating activities: Cash receipts: Collections from customers (2,900 x $300 x .85) $ 739,500 Cash payments: To suppliers ($330,000 + $135,000 + $11,000) $(476,000) To employees ($96,000 – $5,000) (91,000) For income tax (16,000 ) Total cash payments (583,000 ) Net cash provided by operating activities 156,500

Cash flows from investing activities: Purchase of store fixtures (46,000 ) Net cash used for investing activities (46,000)

Cash flows from financing activities: Issuance of common stock $475,000 Payment of dividends (43,000) Net cash used for financing activities 432,000 Net increase in cash $ 542,500Cash balance, December 31, 2009 0 Cash balance, December 31, 2010 $ 542,500


(30-40 min.) P 13A-14A

Req. 1

Cobbs Hill, Inc.Statement of Cash Flows

Year Ended December 31, 2012Cash flows from operating activities: Cash receipts: Collections from customers ($443,000 − $1,700) $ 441,300 Receipts of interest 8,700 Total cash receipts $ 450,000 Cash payments: To suppliers: Inventory ($200,200 − $12,800 − $4,900) $(182,500) Operating expenses ($10,000 + $1,800) (11,800) To employees (73,400) For interest (21,800) For income tax (19,700 ) Total cash payments (309,200 ) Net cash provided by operating activities 140,800

Cash flows from investing activities: Purchase of land $ (24,700) Purchase of equipment ($92,700 − depreciation expense of $14,200 = $78,500; $100,900 − $78,500) (22,400 ) Net cash used for investing activities (47,100)

Cash flows from financing activities: Payment of dividends ($5,700 + $112,400 − $38,300) $ (79,800) Payment of note payable (27,000) Issuance of common stock 23,800 Net cash used for financing activities (83,000 )Net increase in cash $ 10,700Cash balance, December 31, 2011 15,300 Cash balance, December 31, 2012 $ 26,000



Req. 2

C. This problem will help evaluate an investment because I will

learn how operating activities, investing activities, and

financing activities generate cash receipts and cash payments,

and I will learn how companies prepare the statement of cash

flows.


(45-60 min.) P 13A-15A

I-M-Mobile, Inc.Statement of Cash Flows

Year Ended December 31, 2010

Cash flows from operating activities: Receipts: Collections from customers $ 308,600 Receipts of Interest 17,100 Total cash receipts $ 325,700 Payments: To suppliers ($101,100 + $46,200) $(147,300) To employees (65,500) For interest (21,100) For income tax (6,000 ) Total cash payments (239,900 ) Net cash provided by operating activities 85,800

Cash flows from investing activities: Purchase of equipment $ (54,500) Net cash used for investing activities (54,500)

Cash flows from financing activities: Issuance of common stock $ 60,700 Payment of note payable (82,000) Payment of dividends (1,500 ) Net cash used for financing activities (22,800 )Net increase in cash $ 8,500 Cash balance, December 31, 2009 87,300 Cash balance, December 31, 2010 $ 95,800


Appendix A: Problems B

(35-45 min.) P 13A-16B

SKG, Inc.Statement of Cash Flows

Year Ended November 30, 2011

Cash flows from operating activities: Receipts: Collections from customers $ 605,500 Dividends received 4,400 Total cash receipts $ 609,900 Payments: To suppliers $(374,800) To employees (95,000) For interest (12,500) For income tax (40,000 ) Total cash payments (522,300 ) Net cash provided by operating activities 87,600

Cash flows from investing activities: Purchase of plant assets $(55,400) Cash receipt from sale of plant assets 25,500 Net cash used for investing activities (29,900)

Cash flows from financing activities: Cash receipt from issuance of notes payable $ 43,100 Cash receipt from issuance of common stock 60,900 Payment of notes payable (48,000) Payment of dividends (50,400 ) Net cash provided by financing activities 5,600 Net increase in cash $ 63,300 Cash balance, November 30, 2010 40,000 Cash balance, November 30, 2011 $ 103,300


(40 min.) P 13A-17B

Req. 1

Official Reserve Rare CoinsIncome Statement

Year Ended December 31, 2010Sales revenue (2,800 × $225) $630,000Cost of goods sold 340,000Salary expense 94,000Depreciation expense ($46,000 / 5) 9,200Rent expense 10,000Income tax expense 22,000 Net income $154,800

Req. 2

Official Reserve Rare CoinsBalance Sheet

December 31, 2010ASSETS LIABILITIES

Current: Current:Cash $318,000* Accounts payableAccounts receivable ($237,000 −

$137,000)$100,000

(2,800 × $225 × .20) 126,000 Salary payable 2,000 Inventory 207,000 ** Total current

liabilities102,000

Total current assets 651,000STOCKHOLDERS’ EQUITY

Property, plant, and equipment: Common stock 475,000Store fixtures $46,000 Retained earningsLess

Accumulated($154,800 − $44,000) 110,800

depreciation (9,200 ) 36,800 585,800

Total liabilities andTotal assets $687,800 stockholders' equity $687,800

__________*$475,000 − $46,000 − $310,000 − $10,000 − $137,000 + $504,000 − $92,000 − $22,000 − $44,000 = $318,000.

**$310,000 + $237,000 – $340,000 = $207,000


(continued) P 13A-17B

Req. 3

Official Reserve Rare CoinsStatement of Cash Flows

Year Ended December 31, 2010Cash flows from operating activities: Cash receipts: Collections from customers (2,800 x $225 x .80) $ 504,000 Cash payments: To suppliers ($310,000 + $137,000 + $10,000) $(457,000) To employees ($94,000 – $2,000) (92,000) For income tax (22,000 ) Total cash payments (571,000 ) Net cash used for operating activities (67,000)

Cash flows from investing activities: Purchase of store fixtures (46,000 ) Net cash used for investing activities (46,000)

Cash flows from financing activities: Issuance of common stock $475,000 Payment of dividends (44,000) Net cash used for financing activities 431,000 Net increase in cash $ 318,000Cash balance, December 31, 2009 0 Cash balance, December 31, 2010 $ 318,000


(30-40 min.) P 13A-18B

Req. 1

Digital Subscriptions, Inc.Statement of Cash Flows

Year Ended December 31, 2012Cash flows from operating activities: Cash receipts: Collections from customers ($441,000 − $1,500) $ 439,500 Receipts of interest 8,100 Total cash receipts $ 447,600 Cash payments: To suppliers: Inventory ($205,200 − $11,600 − $5,500) $(188,100) Operating expenses ($10,300 + $1,600) (11,900) To employees (79,400) For interest (21,900) For income tax (19,900 ) Total cash payments (321,200 ) Net cash provided by operating activities 126,400

Cash flows from investing activities: Purchase of land $ (24,700) Purchase of equipment ($88,700 − depreciation expense of $14,800 = $73,900; $96,900 − $73,900) (23,000 ) Net cash used for investing activities (47,700)

Cash flows from financing activities: Payment of dividends ($4,200 + $97,600 − $38,700) $ (63,100) Payment of note payable (29,000) Issuance of common stock 24,400 Net cash used for financing activities (67,700 )Net increase in cash $ 11,000Cash balance, December 31, 2011 15,800 Cash balance, December 31, 2012 $ 26,800


(continued) P 13A-18B

Req. 2

C. This problem will help evaluate an investment because I will

learn how operating activities, investing activities, and

financing activities generate cash receipts and cash payments,

and I will learn how companies prepare the statement of cash

flows.


(45-60 min.) P 13A-19B

B-Mobile, Inc.Statement of Cash Flows


Cash flows from operating activities: Receipts: Collections from customers $ 308,900 Receipts of Interest 14,600 Total cash receipts $ 323,500 Payments: To suppliers ($101,100 + $46,700) $(147,800) To employees (69,500) For interest (21,100) For income tax (9,500 ) Total cash payments (247,900 ) Net cash provided by operating activities 75,600

Cash flows from investing activities: Purchase of equipment $ (49,500) Net cash used for investing activities (49,500)

Cash flows from financing activities: Issuance of common stock $ 60,100 Payment of note payable (75,000) Payment of dividends (1,300 ) Net cash used for financing activities (16,200 )Net increase in cash $ 9,900 Cash balance, December 31, 2009 87,400 Cash balance, December 31, 2010 $ 97,300


Chapter 13 Appendix B

Appendix B Problems

(45-60 min.) P 13B-1B

Alden Group, Inc.Work Sheet for Statement of Cash Flows (Indirect Method)


PANEL A – ACCOUNTTITLES

BALANCESDEC. 31,

2011

TRANSACTION ANALYSIS BALANCESDEC. 31,

2012DEBIT CREDITCash and cash equivalents 15,600 (l) 1,900 13,700Accounts receivable 43,100 (c) 1,600 41,500Inventories 93,000 (d) 3,600 96,600Land 10,000 (g) 25,100 35,100Equipment, net 93,700 (h) 22,500 (b) 15,300 100,900

Totals 255,400 287,800

Accounts payable 26,000 (e) 1,200 24,800Accrued liabilities 22,500 (f) 1,900 24,400Notes payable 65,000 (j) 10,000 55,000Common stock 122,300 (k) 8,800 131,100Retained earnings 19,600 (i) 28,700 (a) 61,600 52,500

Totals 255,400 91,100 91,100 287,800


(continued) P 13B-1B



PANEL B – STATEMENTOF CASH FLOWS

BALANCESDEC. 31,

2011


2012DEBIT CREDITCash flows fromoperating activities: Net income (a) 61,600 Adjustments to reconcile net inc. to cash flow from oper. Depreciation (b) 15,300 Decr. in accounts rec. (c) 1,600 Incr. in inventory (d) 3,600 Decr. in accts. pay. (e) 1,200 Incr. in accrued liab. (f) 1,900

Cash flows frominvesting activities: Purchase of land (g) 25,100 Purchase of equip. (h) 22,500

Cash flows fromfinancing activities: Payment of dividends (i) 28,700 Payment of note pay. (j) 10,000 Issuance of com. stk. (k) 8,800

89,200 91,100Net decrease in cash and cash equivalents (l) 1,900 Totals 91,100 91,100


(45-60 min.) P 13B-2B

Cobbs Hill, Inc.Work Sheet for Statement of Cash Flows (Indirect Method)



BALANCESDEC. 31,

2011



Totals 234,800 267,300

Accounts payable 30,700 (e) 4,900 35,600Accrued liabilities 30,000 (f) 1,800 28,200Notes payable 104,000 (j) 27,000 77,000Common stock 64,400 (k) 23,800 88,200Retained earnings 5,700 (i) 79,800 (a)112,400 38,300

Totals 234,800 168,100 168,100 267,300



Cobb Hill, Inc.Work Sheet for Statement of Cash Flows (Indirect Method)



BALANCESDEC. 31,

2011


2012DEBIT CREDITCash flows fromoperating activities: Net income (a)112,400 Adjustments to reconcile net inc. to cash flow from oper. Depreciation (b) 14,200 Incr. in accounts rec. (c) 1,700 Decr. in inventory (d) 12,800 Incr. in accts. pay. (e) 4,900 Decr. in accrued liab. (f) 1,800



168,100 157,400Net decrease in cash and cash equivalents (l)10,700Totals 168,100 168,100


(45-60 min.) P 13B-3B




BALANCESDEC. 31,

2011



Totals 262,200 291,000


Totals 262,200 92,600 92,600 291,000






BALANCESDEC. 31,

2011


2012DEBIT CREDITCash flows fromoperating activities: Net income (a) 60,700 Adjustments to reconcile net inc. to cash flow from oper. Depreciation (b) 15,600 Decr. in accounts rec. (c) 1,600 Incr. in inventory (d) 3,400 Decr. in accts. pay. (e) 1,100 Incr. in accrued liab. (f) 1,300



87,500 92,600Net decrease in cash and cash equivalents (l) 5,100 Totals 92,600 92,600


(45-60 min.) P 13B-4B

Digital Subscriptions, Inc.Work Sheet for Statement of Cash Flows (Indirect Method)



BALANCESDEC. 31,

2011



Totals 230,600 264,400


Totals 230,600 153,900 153,900 264,400



Digital Subscriptions, Inc.Work Sheet for Statement of Cash Flows (Indirect Method)



BALANCESDEC. 31,

2011


2012DEBIT CREDITCash flows fromoperating activities: Net income (a) 97,600 Adjustments to reconcile net inc. to cash flow from oper. Depreciation (b) 14,800 Incr. in accounts rec. (c) 1,500 Decr. in inventory (d) 11,600 Incr. in accts. pay. (e) 5,500 Decr. in accrued liab. (f) 1,600



153,900 142,900Net decrease in cash and cash equivalents (l)11,000Totals 153,900 153,900


hho8e ch13 append sm

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