Chapter 12: Q15DQ (page 565)
Refer to Samsung’s statement of cash flows in Appendix A. What investing activities result in cash outflows for the year ended December 31, 2015? List items and amounts.
The cash flow from investing activities is (27,167,787) in millions of Korean won. The items and amounts are listed in Step 2.
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Refer to the information reported about Gazelle Corporation in Problem 12-3B. Required Prepare a complete statement of cash flows using a spreadsheet as in Exhibit 12A.1; report its operating activities using the indirect method. Identify the debits and credits in the Analysis of Changes columns with letters that correspond to the following list of transactions and events.
a. Net income was \(158,100.
b. Accounts receivable decreased.
c. Inventory decreased.
d. Prepaid expenses decreased.
e. Accounts payable decreased.
f. Depreciation expense was \)38,600.
g. Sold equipment costing \(51,000, with accumulated depreciation of \)22,850, for \(26,050 cash. This yielded a loss of \)2,100.
h. Purchased equipment costing \(113,250 by paying \)43,250 cash and (i.) by signing a long-term note payable for the balance.
j. Borrowed \(5,000 cash by signing a short-term note payable.
k. Paid \)47,500 cash to reduce the long-term notes payable.
l. Issued 3,000 shares of common stock for \(15 cash per share.
m. Declared and paid cash dividends of \)53,600.
Lansing Company’s 2017 income statement and selected balance sheet data (for current assets and current liabilities) at December 31, 2016 and 2017, follow.
LANSING COMPANY Selected Balance Sheet Accounts | ||
At December 31 | 2017 | 2016 |
Accounts receivable | \(5,600 | \)5,800 |
Inventory | 1,980 | 1,540 |
Account payable | 4,400 | 4,600 |
Salaries payable | 880 | 700 |
Utilities payable | 220 | 160 |
Prepaid insurance | 260 | 280 |
Prepaid rent | 220 | 180 |
LANSING COMPANY Income Statement For Year Ended December 31, 2017 | |
Sales revenue | \(97,200 |
Expenses | |
Cost of goods sold | 42,000 |
Depreciation expenses | 12,000 |
Salaries expenses | 18,000 |
Rent expenses | 9,000 |
Insurance expenses | 3,800 |
Interest expenses | 3,600 |
Utilities expenses | 2,800 |
Net income | \)6,000 |
Required
Prepare the cash flows from operating activities section only of the company’s 2017 statement of cash flows using the indirect method.
The following income statement and information about changes in noncash current assets and current liabilities are reported.
SONAD COMPANY Income Statement For Year Ended December 31, 2017 | |
Sales | \(1,828,000 |
Cost of goods sold | 991,000 |
Gross profit | 837,000 |
Operating expenses | |
Salaries expense \)245,535 | |
Depreciation expense 44,200 | |
Rent expense 49,600 | |
Amortization expense—Patents 4,200 | |
Utilities expense 18,125 | 361,660 |
475,340 | |
Gain on sale of equipment | 6,200 |
Net income | \( 481,540 |
Changes in current asset and current liability accounts for the year that relate to operations follow
Accounts receivable | \)30,500 increase | Accounts payable | $12,500 decrease |
Inventory | 25,000 increase | Salaries payable | 3,500 decrease |
Required
Prepare only the cash flows from operating activities section of the statement of cash flows using the indirect method.
Fitz Company reports the following information. Use the indirect method to prepare only the operating activities section of its statement of cash flows for the year ended December 31, 2017.
| Selected 2017 Income Statement Data | Selected Year-End 2017 Balance Sheet Data | ||
Net income | \(374,000 | Accounts receivable decrease | \)17,100 |
Depreciation expense | 44,000 | Inventory decrease | 42,000 |
Amortization expense | 7,20 0 | Prepaid expenses increase | 4,700 |
Gain on sale of plant assets | 6,000 | Accounts payable decrease | 8,200 |
Salaries payable increase | 1,200 | ||
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
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