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ACC291 Week 4 E13-2 E13-8 E14-2

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Complete Exercises E13-2; E13-8, E14-2.

E13-2 An analysis of comparative balance sheets, the current year’s income statement, and
the general ledger accounts of Gagliano Corp. uncovered the following items. Assume all items
involve cash unless there is information to the contrary.

(a) Payment of interest on notes payable.
(b) Exchange of land for patent.
(c) Sale of building at book value.
(d) Payment of dividends.
(e) Depreciation.
(f) Receipt of dividends on investment in
stock.
(g) Receipt of interest on notes receivable.
(h) Issuance of capital stock.
(i) Amortization of patent.
(j) Issuance of bonds for land.
(k) Purchase of land.
(l) Conversion of bonds into common stock.
(m) Loss on sale of land.
(n) Retirement of bonds.

E13-8 Here are comparative balance sheets for Taguchi Company.

TAGUCHI COMPANY
Comparative Balance Sheets
31-Dec
Assets20112010
Cash 73,000 22,000
Accounts Receivable 85,000 76,000
Inventories 170,000 189,000
Land 75,000 100,000
Equipment 260,000 200,000
Accumulated Depreciation (66,000) (32,000)
   Total 597,000 555,000
Liabilities and Stockholders’ Equity
Accounts payable 39,000 47,000
Bonds payable 150,000 200,000
Common stock ($1 par) 216,000 174,000
Retained earnings 192,000 134,000
Total 597,000 555,000

Additional information:
1. Net income for 2011 was $103,000.
2. Cash dividends of $45,000 were declared and paid.
3. Bonds payable amounting to $50,000 were redeemed for cash $50,000.
4. Common stock was issued for $42,000 cash.
5. No equipment was sold during 2011, but land was sold at cost.

Instructions
Prepare a statement of cash flows for 2011 using the indirect method.

E14-3 The comparative condensed balance sheets of Conard Corporation are presented below

CONARD CORPORATION
Comparative Condensed Balance Sheets
31-Dec
20122011
Assets
   Current assets 74,000 80,000
   Property, plant, and equipment (net) 99,000 90,000
   Intangibles 27,000 40,000
   Total assets 200,000 210,000
Liabilities and stockholders’ equity
   Current liabilities 42,000 48,000
   Long-term liabilities 143,000 150,000
   Stockholders’ equity 15,000 12,000
   Total liabilities and stockholders’ equity 200,000 210,000

Instructions
(a) Prepare a horizontal analysis of the balance sheet data for Conard Corporation using 2011
as a base.
(b) Prepare a vertical analysis of the balance sheet data for Conard Corporation in columnar
form for 2012.

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