ACC 560 HW 9

Exercise 13-4

Gutierrez Company reported net income of $194,300 for 2020. Gutierrez also reported depreciation expense of $46,800 and a loss of $5,900 on the disposal of plant assets. The comparative balance sheet shows a decrease in accounts receivable of $19,800 for the year, a $21,800 increase in accounts payable, and a $3,400 decrease in prepaid expenses.

Prepare the operating activities section of the statement of cash flows for 2020. Use the indirect method. (Show amounts that decrease cash flow with either a – sign e.g. -15,000 or in parenthesis e.g. (15,000).)

GUTIERREZ COMPANY Partial Statement of Cash Flows choose the accounting period
select an opening section name
select an item		$enter a dollar amount
Adjustments to reconcile net income to
select a subsection name
select an item	$enter a dollar amount
select an item	enter a dollar amount
select an item	enter a dollar amount
select an item	enter a dollar amount
select an item	enter a dollar amount
		enter a subtotal of the adjustments
select a closing section name		$enter a total amount for the section

 

Exercise 13-6 (Video)

The following information is available for Stamos Corporation for the year ended December 31, 2020.

Beginning cash balance		$50,000
Accounts payable decrease		3,900
Depreciation expense		174,000
Accounts receivable increase		7,400
Inventory increase		10,000
Net income		256,000
Cash received for sale of land at book value		31,000
Cash dividends paid		12,000
Income taxes payable increase		4,800
Cash used to purchase building		303,000
Cash used to purchase treasury stock		28,000
Cash received from issuing bonds		181,000

Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a – sign e.g. -15,000 or in parenthesis e.g. (15,000).)

STAMOS CORPORATION Statement of Cash Flows—Indirect Method
				$
Adjustments to Reconcile net income to
		$
				$

 

 

Exercise 13-7

The following three accounts appear in the general ledger of Herrick Corp. during 2020.

Equipment
Date				Debit		Credit		Balance
Jan. 1		Balance						161,200
July 31		Purchase of equipment		71,200				232,400
Sept. 2		Cost of equipment constructed		53,300				285,700
Nov. 10		Cost of equipment sold				49,000		236,700
Accumulated Depreciation—Equipment
Date				Debit		Credit		Balance
Jan. 1		Balance						72,000
Nov. 10		Accumulated depreciation on equipment sold		29,300				42,700
Dec. 31		Depreciation for year				24,800		67,500
Retained Earnings
Date				Debit		Credit		Balance
Jan. 1		Balance						105,700
Aug. 23		Dividends (cash)		17,400				88,300
Dec. 31		Net income				66,800		155,100

From the postings in the accounts, indicate how the information is reported on a statement of cash flows using the indirect method. The loss on disposal of plant assets was $5,200. (Hint: Cost of equipment constructed is reported in the investing activities section as a decrease in cash of $53,300.) (Show amounts that decrease cash flow with either a – sign e.g. -15,000 or in parenthesis e.g. (15,000).)

HERRICK CORP Partial Statement of Cash Flows choose the accounting period
select an opening name for section one
select an item		$enter a dollar amount
Adjustments to reconcile net income to
select a subsection name
select an item	$enter a dollar amount
select an item	enter a dollar amount
		enter a subtotal of the adjustments
select a closing name for section one		enter a total amount for section one
select an opening name for section two
select an item	enter a dollar amount
select an item	enter a dollar amount
select an item	enter a dollar amount
select a closing name for section two		enter a total amount for section two
select an opening name for section three
select an item		enter a dollar amount

 

 

Problem 13-1A

You are provided with the following information regarding events that occurred at Moore Corporation during 2020 or changes in account balances as of December 31, 2020.

Moore prepares its statement of cash flows using the indirect approach. Complete the first column of the table, indicating whether each item affects the operating activities section (O) (that is, the item would be listed among the adjustments to net income to determine net cash provided by operating activities under the indirect approach), investing activities section (I), financing activities section (F), or is a noncash (NC) transaction reported in a separate schedule. For those items classified as operating activities (O), indicate whether the item is added (A) or subtracted (S) from net income to determine net cash provided by operating activities.

		Transaction		Statement of Cash Flow Section Affected		If Operating, did it increase/decrease Reported cash from Operating activities?
(a)		Depreciation expense was $80,000.		select a kind of activity		select an option
(b)		Interest Payable account increased $5,000.		select a kind of activity		select an option
(c)		Received $26,000 from sale of plant assets.		select a kind of activity		select an option
(d)		Acquired land by issuing common stock to seller.		select a kind of activity		select an option
(e)		Paid $17,000 cash dividend to preferred stockholders.		select a kind of activity		select an option
(f)		Paid $4,000 cash dividend to common stockholders.		select a kind of activity		select an option
(g)		Accounts Receivable account decreased $10,000.		select a kind of activity		select an option
(h)		Inventory increased $2,000.		select a kind of activity		select an option
(i)		Received $100,000 from issuing bonds payable.		select a kind of activity		select an option
(j)		Acquired equipment for $16,000 cash.		select a kind of activity		select an option

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