Chapter 12: 2PSA (page 576)
Refer to the information in Problem 12-1A.
Required
Prepare the cash flows from operating activities section only of the company’s 2017 statement of cash flows using the direct method.
Cash flow from operations totals$17,780.
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Assume that a company purchases land for \(1,000,000, paying \)400,000 cash and borrowing the remainder with a long-term note payable. How should this transaction be reported on a statement of cash flows?
Refer to the data in QS 12-11.
Describe the indirect method of reporting cash flows from operating activities.
The following financial statements and additional information are reported
IKIBAN INC. Income Statement For Year Ended June 30, 2017 | |
Sales | \(678,000 |
Cost of goods sold | 411,000 |
Gross profit | 267,000 |
Operating expenses | |
Depreciation expense \)58,600 | |
Other expenses 67,000 | |
Total operating expenses | 125,600 |
141,400 | |
Other gains (losses) | |
Gain on sale of equipment | 2,000 |
Income before taxes | 143,400 |
Income taxes expense | 43,890 |
Net income | \( 99,510 |
IKIBAN INC. Comparative Balance Sheets June 30, 2017 and 2016 | ||
Assets | 2017 | 2016 |
Cash | \) 87,500 | \( 44,000 |
Accounts receivable, net | 65,000 | 51,000 |
Inventory | 63,800 | 86,500 |
Prepaid expenses | 4,400 | 5,400 |
Total current assets | 220,700 | 186,900 |
Equipment | 124,000 | 115,000 |
Accum. depreciation—Equipment | (27,000) | (9,000) |
Total assets | \)317,700 | \(292,900 |
Liabilities and Equity | ||
Accounts payable | \) 25,000 | \( 30,000 |
Wages payable | 6,000 | 15,000 |
Income taxes payable | 3,400 | 3,800 |
Total current liabilities | 34,400 | 48,800 |
Notes payable (long term) | 30,000 | 60,000 |
Total liabilities | 64,400 | 108,800 |
Equity | ||
Common stock, \)5 par value | 220,000 | 160,000 |
Retained earnings | 33,300 | 24,100 |
Total liabilities and equity | \(317,700 | \)292,900 |
Additional Information
Required
Refer to Forten Company’s financial statements and related information in Problem 12-3A.
Required
Prepare a complete statement of cash flows; report its operating activities according to the direct method. Disclose any noncash investing and financing activities in a note.
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