value: 10.00 points - · pdf filechapter 14 pre-built problems 2. value: 10.00 points below...

Chapter 14 Pre-Built Problems
1 . value: 10.00 points Foxboro Company's income statement for Year 2 follows:
Sales Cost of goods sold
Gross margin
Foxboro Company Income Statement
Selling and administrative expenses
Net operating income Gain on sale of equipment
Income before taxes Income taxes
Net income
$ 709,000 233,000
476,000 217,000
259,000 9,000
268,000 107,200
$ 160,800
Its balance sheet amounts at the end of Years 1 and 2 are as follows:
Assets Cash Accounts receivable Inventory Prepaid expenses
Total current assets
Plant and equipment Accumulated depreciation
Net plant and equipment
Loan to Harker Company
Total assets
Foxboro Company Balance Sheet
Liabilities and Stockholders' Equity Accounts payable Accrued liabilities Income taxes payable
Total current liabilities Bonds payable
Total liabilities
Common stock Retained earnings
Total stockholders' equity
Total liabilities and stockholders' equity
Year2
$ 122,100 254,000 320,000
10,500
706,600
639,000 166,800
472,200
41,000
$1,219,800
$ 311,000 46,000 85,500
442,500 209,000
651,500
343,000 225,300
568,300
$1,219,800
Year1
$ 76,200 147,000 282,000
21,000
526,200
501,000 131,400
369,600
0
$ 895,800
$ 263,000 54,000 81,800
398,800 115,000
513,800
285,000 97,000
382,000
$ 895,800
instructions I help

Equipment that had cost $31,600 and on which there was accumulated depreciation of $11,800 was sold during Year 2 for $28,800. The company declared and paid a cash dividend during Year 2. It did not retire any bonds or repurchase any of its own stock.
Required: 1. Using the indirect method, compute the net cash for operating activities for Year 2. (Negative amount
should be indicated by a minus sign. Omit the "$" sign in your response.)
Net cash ( provided by '
I operating activities $ 108200
2. Prepare a statement of cash flows for Year 2. (Amounts to be deducted should be indicated with a minus sign. Omit the "$" sign in your response.)
Foxboro Company Statement of Cash Flows
Operating activities:
( Net income
Adjustments to convert net income to cash basis: Depreciation ... Increase in accounts receivable ... Increase in inventory ... Decrease in prepaid expenses ... Increase in accounts payable ... Decrease in accrued liabilities ... Increase in income taxes payable ... Gain on sale of equipment ...
Net cash ( provided by
Investing activities:
) operating activities
Additions to plant and equipment ... Loan to Harker Company ... Proceeds from sale of equipment ...
Net cash (_u_s_e_d_i_n ____ ___ ) investing activities
Financing activities: Issuance of bonds payable ... Issuance of common stock ... Cash dividends ...
Net cash ( provided by ) financing activities
( Net increase in cash
Cash balance, beginning of year
Cash balance, end of year
$ 47,200
-107,000
-38,000
10,500
48,000
-8,000
3,700
-9,000
1-169,600 I
I -41,000 I
I 28,800 I
94,ooo I
I 58,ooo I
I -32,500 I
$ I 160800 I
-52600 I
108200 1
1-181800 I
119500 I
45900 1
76200 1
$ I 122100 I
3. Compute the free cash flow for Year 2.(Negative amount should be indicated by a minus sign. Omit the "$" sign in your response.)
Free cash flow $ [1 -93900 I
check my work lOJ eBook Links (3} ~ I.,~ 1 references

2. value: 10.00 points Below are certain events that took place at Hazzard, Inc., last year: Indicate whether the transaction would be classified as Operating, Investing or Financing.
Transaction
a. Paid bills to insurers and utility providers.
b. Purchased equipment with cash.
c. Paid wages and salaries to employees.
d. Paid taxes to the government.
e. Loaned money to another entity.
f. Sold common stock.
g. Paid a cash dividend to stockholders.
h. Paid interest to lenders.
i. Repaid the principal amount of a debt.
J. Paid suppliers for inventory purchases.
k. Borrowed money from a creditor.
I. Paid cash to repurchase its own stock.
m. Collected cash from customers.
check my work UOI eBook Link ~ 1 ~ > references
Activity
( Operating ~ ) ( Investing ~ ) ( Operating ~ ) ( Operating
( Investing
( Financing
( Financing
( Operating
( Financing
( Operating
( Financing
( Financing
( Operating
instructions I help

3. value: 10.00 points For the just completed year, Strident Company had net income of $64,500. Balances in the company's current asset and current liability accounts at the beginning and end of the year were as follows:
Current assets: Cash Accounts receivable Inventory Prepaid expenses
Current liabilities: Accounts payable Accrued liabilities Income taxes payable
December31 End of Beginning of Year Year
$ 58,000 $ 164,000 $ 439,000 $ 12,000
$ 370,000 $ 8,500 $ 34,000
$ 77,000 $ 188,000 $ 361,000 $ 14,000
$ 396,000 $ 11,500 $ 28,000
The Accumulated Depreciation account had total credits of $46,000 during the year.
Required: Using the indirect method, determine the net cash provided by operating activities for the year. (Amounts to be deducted should be indicated with a minus sign. Omit the "$" sign in your response.)
Strident Company Statement of Cash Flows-Indirect Method (partial)
Net income $ I 64500 I Adjustments to convert net income to a cash basis:
Depreciation "' "' Decrease in accounts receivable "' "' Increase in inventory "' "' Decrease in prepaid expenses "' "' Decrease in accounts payable "' "' Decrease in accrued liabilities "' "' Increase in income taxes payable "' "'
$ I 46,0001
I 24,0001
I -10,0001
o .@ I -26,0001
I -3,ooo l
I 6,ooo I -29000 I
Net cash provided by operating activities $ I 35500 I
check my work ~ eBook Link (~ J references
instructions I help

4. value: 10.00 points A comparative balance sheet and income statement for Eaton Company follow:
Eaton Company Comparative Balance Sheet
December31, 2011and2010
Assets Cash Accounts receivable Inventory Prepaid expenses
Total current assets
Property, plant, and equipment Less accumulated depreciation
Net property, plant, and equipment
Long-term investments
Total assets
Liabilities and Stockholders' Equity Accounts payable Accrued liabilities Income taxes payable
Total current liabilities Bonds payable
Total liabilities
Common stock Retained earnings
Total stockholders' equity
Total liabilities and stockholders' equity
Eaton Company Income Statement
For the Year Ended December 31, 2011 Sales $754 Cost of goods sold 449
Gross margin Selling and administrative expenses
Net operating income Nonoperating items:
Gain on sale of investments Loss on sale of equipment
Income before taxes Income taxes
Net income
$ 6 (2)
305
222
83
4
87
22
$ 65
2011
$ 21 308 157
7
493
508 (84)
424
27
$944
$300 71 72
443 197
640
161 143
304
$944
2010
$ 13 229 195
5
442
430 (72)
358
33
$833
$226 77 64
367 170
537
202 94
296
$833
instructions I help

During 2011, Eaton sold some equipment for $19 that had cost $31 and on which there was accumulated depreciation of $10. In addition, the company sold long-term investments for $12 that had cost $6 when purchased several years ago. A cash dividend was paid during 2011 and the company, repurchased $41 of its own stock. Eaton did not retire any bonds during 2011.
Required: 1. Using the indirect method, determine the net cash for operating activities for 2011. (Negative amount
should be entered with a minus sign. Omit the"$" sign in your response.)
Net cash L provided by ~ 1 operating activities $ ."=I = 1=16=-ll.
2. Using the information in (1) above, along with an analysis of the remaining balance sheet accounts, prepare a statement of cash flows for 2011. (Amounts to be deducted should be indicated with a minus sign. Omit the "$" sign in your response.)
Eaton Company Statement of Cash Flows
For the Year Ended December 31, 2011 Operating activities:
( Net income ~ ) Adjustments to convert net income to cash basis:
Depreciation & ... Increase in accounts receivable & ... Decrease in inventory & ... Loss on sale of equipment & ... Increase in accounts payable & ... Decrease in accrued liabilities & ... Increase in income taxes payable & ... Gain on sale of investments & ... Increase in prepaid expenses & ...
Net cash ( provided by
Investing activities:
~ ) operating activities
Proceeds from sale of equipment & ... Proceeds from sale of long-term investments & ... Additions to plant and equipment & ...
Net cash ( __ u_s_e_d_i_n ______ ~ ) investing a

value: 10.00 points - · pdf filechapter 14 pre-built problems 2. value: 10.00 points below...

Documents