Mitchell Franklin; Patty Graybeal; Dixon Cooper

PB 1.

LO 16.2Provide journal entries to record each of the following transactions. For each, also identify: *the appropriate section of the statement of cash flows, and **whether the transaction represents a source of cash (S), a use of cash (U), or neither (N).

reacquired $30,000 treasury stock
purchased inventory for $20,000
issued common stock of $40,000 at par
purchased land for $25,000
collected $22,000 from customers for accounts receivable
paid $33,000 principal payment toward note payable to bank

PB 2.

LO 16.3Use the following information from Grenada Company’s financial statements to prepare the operating activities section of the statement of cash flows (indirect method) for the year 2018.

Income Statement items: Sales $286,000. Cost of Goods Sold (159,000). Operating Expenses, other than depreciation expense (77,500). Depreciation Expense (9,500). Gain on Sale of Investments 14,200. Net Income 54,200. Balance Sheet items: December 31, 2018: Accounts Receivable 16,500. Accounts Payable 7,400. December 31, 2017: Accounts Receivable 18,250. Accounts Payable 8,800.

PB 3.

LO 16.3Use the following information from Honolulu Company’s financial statements to prepare the operating activities section of the statement of cash flows (indirect method) for the year 2018.

Cash, Accounts Receivable, Prepaid Assets, Total Assets, Accrued Liabilities, Common Stock, Retained Earnings, Total Liabilities and Equity December 31, 2018, respectively: $275,000, 143,000, 8,500, 426,500, 120,000, 285,000, 21,500, 426,500. Additional information: Net Income, Dividends paid, respectively: 20,500, 12,000. Cash, Accounts Receivable, Prepaid Assets, Total Assets, Accrued Liabilities, Common Stock, Retained Earnings, Total Liabilities and Equity December 31, 2017, respectively: $254,000, 132,000, 9,000, 395,000, 112,000, 270,000, 13,000, 395,000.

PB 4.

LO 16.3Use the following information from Isthmus Company’s financial statements to prepare the operating activities section of the statement of cash flows (indirect method) for the year 2018.

Cash, Accounts Receivable, Inventory, Accounts Payable, Salaries Payable December 31, 2018, respectively: $295,000, 45,300, 92,200, 23,000, 1,700. Additional information: Net Income, Depreciation Expense: 45,200, 33,300. Cash, Accounts Receivable, Inventory, Accounts Payable, Salaries Payable December 31, 2017, respectively: $259,000, 48,700, 91,000, 26,300, 1,500.

PB 5.

LO 16.3Use the following information from Juniper Company’s financial statements to prepare the operating activities section of the statement of cash flows (indirect method) for the year 2018.

From the December 31, 2018 balance sheet, changes from prior year: Accounts Receivable 4,000, Inventory (5,500), Prepaid Insurance 4,000, Accounts Payable 3,000, Sales Tax Payable (200). From the 2018 Income Statement: Loss from sale of land 4,200, Depreciation Expense 17,250, Net Income 22,222.

PB 6.

LO 16.3Use the following excerpts from Kayak Company’s financial information to prepare the operating section of the statement of cash flows (indirect method) for the year 2018.

Income Statement items: Sales $777,000. Cost of Goods Sold (555,000). Operating Expenses, other than depreciation expense (22,000). Depreciation Expense (44,000). Loss on Sale of Plant Assets (11,000). Net Income 145,000. Balance Sheet items: December 31, 2018: Accounts Receivable 63,300. Inventory 2,400. Accounts Payable 35,000. Accrued Liabilities 2,100. December 31, 2017: Accounts Receivable 63,000. Inventory 2,800. Accounts Payable 37,400. Accrued Liabilities 2,650.

PB 7.

LO 16.3Analysis of Longmind Company’s accounts revealed the following activity for Equipment, with descriptions added for clarity of analysis. How would these two transactions be reported for cash flow purposes? Note the section of the statement of cash flow, if applicable, and if the transaction represents a cash source, cash use, or noncash transaction.

Equipment items: Account balance, beginning of year $88,000; Purchase of equipment this year, for cash 29,500; Purchase of equipment this year, with note payable 34,750; Account balance, end of year 152,250.

	Equipment
Account balance, beginning of year	$ 88,000
• Purchase of equipment this year, for cash	29,500
• Purchase of equipment this year, with note payable	34,750
Account balance, end of year	152,250

PB 8.

LO 16.4Use the following excerpts from Stern Company’s financial information to prepare a statement of cash flows (indirect method) for the year 2018.

Cash, Account Receivable, Merchandise Inventory, Land, Plant Assets, Accumulated Depreciation, Total Assets, Accounts Payable, Notes Payable, Common Stock, Retained Earnings, Total Liabilities and Equity December 31, 2018, respectively: $121,000, 37,200, 120,000, 304,000, (85,000), 497,200, 23,200, 179,500, 30,000, 264,500, 497,200. Additional Information: Net Income for 2018, Depreciation Expense for 2018 (Accumulated Depreciation increase), Plant Assets purchased (Plant Assets increase), financed by note, Notes Payable increased by amount of plant asset purchase, Notes Payable decreased by amount of principal note payments, respectively: 3,400, 21,000, 50,000, 50,000, 14,500. Cash, Account Receivable, Merchandise Inventory, Land, Plant Assets, Accumulated Depreciation, Total Assets, Accounts Payable, Notes Payable, Common Stock, Retained Earnings, Total Liabilities and Equity December 31, 2017, respectively: $101,000, 35,3000, 128,700, 254,000, (64,000), 455,000, 19,900, 144,000, 30,000, 261,100, 455,000.

PB 9.

LO 16.4Use the following excerpts from Unigen Company’s financial information to prepare the operating section of the statement of cash flows (indirect method) for the year 2018.

2018 Income Statement items: Sales $777,000. Cost of goods sold (555,000). Operating expenses, other than depreciation expense (22,000). Depreciation expense (44,000). Loss on sale of plant assets (11,000). Net income 145,000. Balance Sheet items: December 31, 2018: Cash 429,850. Accounts receivable 63,300. Inventory 2,400. Accounts payable 35,000. Accrued liabilities 2,100. December 31, 2017: Cash 228,700. Accounts receivable 63,000. Inventory 2,800. Accounts payable 37,400. Accrued liabilities 2,650. Additional information: Plant assets were sold for $22,000; book value $33,000. Dividends of $18,000 were declared and paid.

PB 10.

LO 16.4Use the following excerpts from Mountain Company’s financial information to prepare a statement of cash flows (indirect method) for the year 2018.

Cash, Account Receivable, Merchandise Inventory, Investments, Plant Assets, Accumulated Depreciation, Total Assets, Accounts Payable, Accrued Liabilities, Common Stock, Retained Earnings, Total Liabilities and Equity December 31, 2018, respectively: $100,000, 19,000, 29,000, 132,000, 90,000, (37,000), 333,000, 12,100, 2,400, 81,000, 237,500, 333,000. Additional information: Net Income (loss) for 2018, Depreciation Expense for 2018, Investments purchased, Common Stock issued for cash, at par value for cash, Dividends declared and paid, respectively: (5,700), 14,000, 12,000, 18,000, 8,000. Cash, Account Receivable, Merchandise Inventory, Investments, Plant Assets, Accumulated Depreciation, Total Assets, Accounts Payable, Accrued Liabilities, Common Stock, Retained Earnings, Total Liabilities and Equity December 31, 2017, respectively: $93,000, 18,000, 31,500, 120,000, 90,000, (23,000), 329,500, 13,400, 1,900, 63,000, 251,200, 329,500.

PB 11.

LO 16.4Use the following excerpts from OpenAir Company’s financial information to prepare a statement of cash flows (indirect method) for the year 2018.

Beginning cash $120,000. Net Income 87,500. Depreciation expense 22,000. Accounts Receivable change 8,900. Inventory change (6,500). Prepaid assets change 2,400. Investments change (no asset sales) 30,000. Accounts payable change (800). Note payable principal balance change (no new loans) (21,000). Common stock balance change (due to stock issuance) 36,000.

PB 12.

LO 16.5The following shows excerpts from financial information relating to Stanwell Company and Thodes Company.

Stanwell Company Net Cash Flows from Operating Activities $138,000. Total Assets 272,000. Net Income 35,000. Sales Revenue 385,000. Capital Expenditures 28,000. Dividend Payments 17,000. Thodes Company Net Cash Flows from Operating Activities $115,000. Total Assets 350,000. Net Income 32,000. Sales Revenue 250,000. Capital Expenditures 60,000. Dividend Payments 13,000.

Compute the following for both companies. Compare your results.

free cash flow
cash flows to sales ratio
cash flows to assets ratio

PB 13.

LO 16.6Use the following excerpts from Swansea Company’s financial information to prepare the operating section of the statement of cash flows (direct method) for the year 2018.

PB 14.

LO 16.6Use the following excerpts from Swahilia Company’s financial information to prepare a statement of cash flows (direct method) for the year 2018.

PB 15.

LO 16.6Use the following cash transactions relating to Warthoff Company to determine the cash flows from operating, using the direct method.

Beginning cash balance $45,000. Collected from customers 24,500. Paid dividends to stockholders 5,000. Paid for interest on notes payable 3,200. Collected dividends from stock owned 1,800. Collected cash from sale of land 15,000. Pain principal payments on notes payable 18,800. Collected cash from issuance of stock 25,000. Paid suppliers for merchandise 31,000. Ending cash balance 53,300.

Problem Set B