ACC421 Week 4 E23-1 E23-4 E23-7 E23-11 E23-12
E23-1 (Classification of Transactions) Springsteen Co. had the following activity in its most recent year of operations.
(a) Pension expense exceeds amount funded.
(b) Redemption of bonds payable.
(c) Sale of building at book value.
(e) Exchange of equipment for furniture.
(f) Issuance of capital stock.
(g) Amortization of intangible assets.
(h) Purchase of treasury stock.
(i) Issuance of bonds for land.
(j) Payment of dividends.
(k) Increase in interest receivable on notes receivable.
(l) Purchase of equipment.
Classify the items as (1) operating—add to net income; (2) operating—deduct from net income; (3) investing; (4) financing; or (5) significant noncash investing and financing activities. Use the indirect method.
E23-4 The income statement of Rodriquez Company is shown below.
|For the Year Ended December 31, 2012|
|Cost of goods sold|
|Goods available for sale||6,300,000|
|Cost of goods sold||4,700,000|
Prepare the operating activities section of the statement of cash flows using the direct method.
E23-7 (Computation of Operating Activities—Direct Method) Presented below are two independent situations.
Chenowith Co. reports revenues of $200,000 and operating expenses of $110,000 in its first year of operations, 2012. Accounts receivable and accounts payable at year-end were $71,000 and $39,000, respectively. Assume that the accounts payable related to operating expenses. Ignore income taxes.
Using the direct method, compute net cash provided (used) by operating activities.
The income statement for Edgebrook Company shows cost of goods sold $310,000 and operating expenses (exclusive of depreciation) $230,000. The comparative balance sheet for the year shows that inventory increased $21,000, prepaid expenses decreased $8,000, accounts payable (related to merchandise) decreased $17,000, and accrued expenses payable increased $11,000.
Compute (a) cash payments to suppliers and (b) cash payments for operating expenses.
E23-11 (SCF—Indirect Method) Condensed financial data of Fairchild Company for 2012 and 2011 are presented below
|Long-term investments (Held-to-maturity)||1,300||1,470|
|Cost of goods sold||4,700|
|Selling and administrative expense||930|
|Income from operations||1,270|
|Other revenues and gains|
|Gain on sale of investments||80|
|Income before tax||1,350|
|Income tax expense||540|
During the year, $70 of common stock was issued in exchange for plant assets. No plant assets were sold in 2012. Cash dividends were $260.
Prepare a statement of cash flows using the indirect method.
E23-12 (SCF—Direct Method) Data for Fairchild Company are presented in E23-11.
Prepare a statement of cash flows using the direct method.