Chapter 14: Q4TI (page 758)
Question: Big Island, Inc. began 2018 with cash of
Answer
Net Cash used by operating activities is ($33,000)
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Preparing the statement of cash flows—direct method Use the Rolling Hills, Inc. data from Problem P14-34A. Requirements
1. Prepare the 2018 statement of cash flows by the direct method.
2. How will what you learned in this problem help you evaluate an investment?
Preparing operating activities cash flow—direct method
The accounting records of Four Seasons Parts reveal the following:
Payment of salaries and wages \( 34,000
Net income \) 21,000
Depreciation expense 10,000
Payment of income tax 16,000
Payment of interest 17,000
Collection of dividend revenue 5,000
Payment of dividends 5,000
Payment to suppliers 51,000
Collections from customers 116,000
Compute cash flows from operating activities using the direct method for the year ended December 31, 2018.
Use the Rouse Exercise Equipment data in Exercises E14-23 and E14-24. Rouse plans to purchase a truck for
The 2018 comparative balance sheet and income statement of Appleton Group, Inc. follow. Appleton disposed of a plant asset at book value during 2018
Prepare the spreadsheet for the 2018 statement of cash flows. Format cash flows from operating activities by the indirect method. A plant asset was disposed of for
A-One Mobile Homes reported the following in its financial statements for the year Ended December 31, 2018:
2018 2017
Income Statement
Net Sales Revenue
Cost of Goods Sold 18,074 15,501
Depreciation Expense 271 234
Other Operating Expenses 4,632 4,277
Income Tax Expense 530 482
Net Income
Balance Sheet
Cash
Accounts Receivable 798 615
Merchandise Inventory 3,483 2,832
Property, Plant, and Equipment, net 4,351 3,437
Accounts Payable 1,547 1,364
Accrued Liabilities 938 851
Long-term Liabilities 477 461
Common Stock, no par 670 443
Retained Earnings 5,021 3,784
Requirements
1. Compute the collections from customers.
2. Compute payments for merchandise inventory.
3. Compute payments of other operating expenses.
4. Compute the acquisitions of property, plant, and equipment (no sales of property during 2018).
5. Compute the amount of borrowing, with A-One paying no long-term liabilities.
6. Compute the cash receipt from issuance of common stock.
7. Compute the payment of cash dividends.
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