Financial & Managerial Accounting
13th Edition
ISBN: 9781285866307
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Chapter 14, Problem 14.5BPR
Statement of cash flows—direct method applied to PR 14-1B
The comparative balance sheet of Merrick Equipment Co. for Dec. 31, 2016 and 2015, is:
| Dec. 31,2016 | Dec. 31.201S | ||
| Assets | |||
| Cash | $ 70,720 | $ | 47,940 |
| Accounts receivable (net) | 207,230 | 188,190 | |
| Inventories | 298,520 | 289,850 | |
| Investments. | 0 | 102,000 | |
| Land | 295,800 | 0 | |
| Equipment | 438,600 | 358,020 | |
| Accumulated |
(99,110) | (84,320) | |
| Total assets | $1,2’1,760 | $ | 901,680 |
| Liabilities and Stockholders' Equity | |||
| Accounts payable (merchandise creditors) | $ 205,700 | $ | 194,140 |
| Accrued expenses payable (operating expenses! | 30,600 | 26,860 | |
| Dividends payable | 25,500 | 20,400 | |
| Common stock. Si par. | 202,000 | 102,000 | |
| Paid in capital: Excess of issue price over par—common stock | 354,000 | 204,000 | |
| 393,960 | 354,280 | ||
| Total liabilities and stockholders’ equity | $1,211,760 | $ | 901,680 |
The income statement for the year ended December 31, 2016, is as follows:
| Sales- | $2,023,898 | |
| Cost of merchandise sold | 1,245,476 | |
| Gross profit | $ 778,422 | |
| Operating expenses: | ||
| Depreciation expense | $ 14,790 | |
| Other operating expenses | 517,299 | |
| Total operating expenses | 532,089 | |
| Operating income | $ 246,333 | |
| Other expenses: | ||
| Loss on sale of investments | (10,200) | |
| Income before income tax | $ 236,133 | |
| Income tax expense- | 94,453 | |
| Net income- | $ 141,680 |
Additional data obtained from an examination of the accounts in the ledger for 2016 are as follows:
a. Equipment and land were acquired for cash.
b. There were no disposals of equipment during the year.
c. The investments were sold for $91,800 cash.
d. The common stock was issued for cash.
e. There was a $102,000 debit to Retained Laming for cash dividends declared. Instructions
Prepare a statement of cash flows, using the direct method of presenting cash flows from operating activities.
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Statement of Cash Flows—Indirect Method
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194,400
113,700
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511,530
489,090
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$956,760
$836,020
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Chapter 14 Solutions
Financial & Managerial Accounting
Ch. 14 - Prob. 1DQCh. 14 - Prob. 2DQCh. 14 - A corporation issued 2,000,000 of common stock in...Ch. 14 - A retail business, using the accrual method of...Ch. 14 - If salaries payable was 100,000 at the beginning...Ch. 14 - Prob. 6DQCh. 14 - A corporation issued 2,000,000 of 20-year bonds...Ch. 14 - Fully depreciated equipment costing 50,000 was...Ch. 14 - Prob. 9DQCh. 14 - Name five common major classes of operating cash...
Ch. 14 - Prob. 14.1APECh. 14 - Classifying cash flows Identify whether each of...Ch. 14 - Prob. 14.2APECh. 14 - Prob. 14.2BPECh. 14 - Prob. 14.3APECh. 14 - Prob. 14.3BPECh. 14 - Prob. 14.4APECh. 14 - Prob. 14.4BPECh. 14 - Land transactions on the statement of cash flows...Ch. 14 - Land transactions on the statement of cash flows...Ch. 14 - Prob. 14.6APECh. 14 - Prob. 14.6BPECh. 14 - Prob. 14.7APECh. 14 - Prob. 14.7BPECh. 14 - Prob. 14.8APECh. 14 - Prob. 14.8BPECh. 14 - Prob. 14.1EXCh. 14 - Prob. 14.2EXCh. 14 - Classifying cash flows Identify the type of cash...Ch. 14 - Prob. 14.4EXCh. 14 - Prob. 14.5EXCh. 14 - Prob. 14.6EXCh. 14 - Prob. 14.7EXCh. 14 - Determining cash payments to stockholders The...Ch. 14 - Prob. 14.9EXCh. 14 - Reporting changes in equipment on statement of...Ch. 14 - Prob. 14.11EXCh. 14 - Prob. 14.12EXCh. 14 - Reporting land acquisition for cash and mortgage...Ch. 14 - Prob. 14.14EXCh. 14 - Prob. 14.15EXCh. 14 - Prob. 14.16EXCh. 14 - Prob. 14.17EXCh. 14 - Prob. 14.18EXCh. 14 - Prob. 14.19EXCh. 14 - Prob. 14.20EXCh. 14 - Prob. 14.21EXCh. 14 - Cash flows from operating activities direct method...Ch. 14 - Prob. 14.23EXCh. 14 - Prob. 14.24EXCh. 14 - Prob. 14.25EXCh. 14 - Prob. 14.26EXCh. 14 - Prob. 14.1APRCh. 14 - Statement of cash flowsindirect method The...Ch. 14 - Prob. 14.3APRCh. 14 - Prob. 14.4APRCh. 14 - Statement of cash flowsdirect method applied to PR...Ch. 14 - Prob. 14.1BPRCh. 14 - Prob. 14.2BPRCh. 14 - Prob. 14.3BPRCh. 14 - Prob. 14.4BPRCh. 14 - Statement of cash flowsdirect method applied to PR...Ch. 14 - Prob. 14.1CPCh. 14 - Prob. 14.2CPCh. 14 - Analysis of statement of cash flows Dillip Lachgar...Ch. 14 - Prob. 14.4CP
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