Managerial Accounting 1B Ch12

Managerial Accounting 1B

Financial and Managerial Accounting

Chapter 12

Exercise 12-5B Computation of cash flows (direct) L.O. P5


Case A: Save Time On Research and Writing Hire a Pro to Write You a 100% Plagiarism-Free Paper. Get My Paper	Compute cash received from customers:
Sales				$	510,000
Accounts receivable, December 31,	2011	2 5,200
Accounts receivable, December 31, 2012	34,800
Case B:	Compute cash paid for rent:
Rent expense	140,800
Rent payable, December 31, 2011	8,800
Rent payable, December 31, 2012			7,200
Case C:	Compute cash paid for merchandise:
Cost of goods sold	528,000
Merchandise inventory, December 31, 2011	159,600
Accounts payable, December 31, 2011	67,800
Merchandise inventory, December 31, 2012	131,400
Accounts payable, December 31, 2012	84,000

For each of the above three separate cases, use the information provided about the calendar-year 2012 operations of Sahim Company to compute the required cash flow information. (Omit the “$” sign in your response.)

Case A:

Cash

received from customers

Case B:

Cash paid for rent

Case C:

Cash paid for merchandise

Exercise 12-6

Cash

flows from operating activities (indirect) L.O. P2

7,200

	BEKHAM COMPANY Income Statement For Year Ended December 31, 2011
		Sales		1,818,000
		Cost of goods sold		891,000
		Gross profit		9 2 7,000
		Operating expenses
	Salaries expense		248,535
	Depreciation expense		43,200
	Rent expense		48,600
Amortization expenses–Patents			5,400
	Utilities expense		19,125		364,860
	562,140
	Gain on sale of equipment
		Net income		569,340

Changes in current asset and current liability accounts for the year that relate to operations follow.

increase

decrease

	Accounts receivable		40,500				increase			Accounts payable		13,500				decrease
	Merchandise inventory		27,000		Salaries payable	4,500

Use the above income statement and information about changes in noncash current assets and current liabilities to prepare only the cash flows from operating activities section of the statement of cash flows using the indirect method. (Amounts to be deducted should be indicated with a minus sign. Omit the “$” sign in your response)

Exercise 12-7B Cash flows from operating activities (direct) L.O. P5

BEKHAM COMPANY Income Statement For Year Ended December 31, 2011 Sales $ 1,818,000 Cost of goods sold 891,000 Gross profit

927,000

Operating expenses Salaries expense $ 248,535 Depreciation expense 43,200 Rent expense 48,600

5,400

Utilities expense 19,125 364,860

562,140

Gain on sale of equipment 7,200 Net income $ 569,340

Amortization expenses—Patents

Changes in current asset and current liability accounts for the year that relate to operations follow.

Accounts receivable $ 40,500 increase Accounts payable $ 13,500 decrease

Merchandise inventory 27,000 increase Salaries payable

decrease

4,500

Use the above income statement and information about changes in noncash current assets and current liabilities to prepare only the cash provided or used by operating activities section of the statement of cash flows for this company using the direct method. (Amounts to be deducted should be indicated with a minus sign. Omit the “$” sign in your response.)

Exercise 12-10 Preparation of statement of cash flows (indirect) L.O. P1

[The following information applies to the questions displayed below.]

Use the following financial statements and additional information.

2011 2010

5,400

)

Accounts payable $

70,000

$ 330,000 $ 309,000

GECKO INC. Comparative Balance Sheets June 30, 2011 and	2010
Assets
Cash	85,800	45,000
Accounts receivable, net		70,000	52,000
Inventory	66,800	96,800
Prepaid expenses	5,200
Equipment	130,000	120,000
Accum. depreciation—Equipment	(28,000		)	(10,000
Total assets		330,000		309,000
Liabilities and Equity
26,000	32,000
Wages payable	7,000	16,000
Income taxes payable	2,400	3,600
Notes payable (long term)	40,000
Common stock, $5 par value	230,000	180,000
Retained earnings	24,600	7,400
Total liabilities and equity

Sales $

Cost of goods sold

Gross profit

Operating expenses

Net income $

GECKO INC. Income Statement For Year Ended June 30, 2011
668,000
41 2,000
256,000
Depreciation expense	58,600
Other expenses	67,000
Total operating expenses	125,600
	130,400
Other gains (losses)
Gain on sale of equipment	2,000
Income before taxes	132,400
Income taxes expense	45,640
86,760

Additional Information

	a.	A $30,000 note payable is retired at its $30,000 carrying (book) value in exchange for cash.
	b.	The only changes affecting retained earnings are net income and cash dividends paid.
	c.	New equipment is acquired for $58,600 cash.
	d.	Received cash for the sale of equipment that had cost $48,600, yielding a $2,000 gain.
e.	Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement.
f.	All purchases and sales of merchandise inventory are on credit.

Exercise 12-10 Part 1

(1)

Prepare a statement of cash flows for the year ended June 30, 2011, using the indirect method.(Amounts to be deducted should be indicated with a minus sign. Omit the “$” sign in your response.)

Exercise 12-10 Part 2

(2)

Compute the company’s cash flow on total assets ratio for its fiscal year 2011. (Round your answer to 1 decimal place. Omit the “%” sign in your response.)

Cash flow on total assets ratio

Exercise 12-13B Preparation of statement of cash flows (direct) from Cash T-account L.O. P1

[The following information applies to the questions displayed below.]

The following summarized Cash T-account reflects the total debits and total credits to the Cash account of Texas Corporation for calendar year 2011.

Cash

218,000

Balance, Dec. 31, 2010	135,200
Receipts from customers	6,000,000	Payments for merchandise	1,590,000
Receipts from dividends	208,400	Payments for wages	550,000
Receipts from land sale	220,000	Payments for rent	320,000
Receipts from machinery sale	710,000	Payments for interest		218,000
Receipts from issuing stock	1,540,000	Payments for taxes	450,000
Receipts from borrowing	2,600,000	Payments for machinery	2,236,000
Payments for long-term investments	2,260,000
Payments for note payable	386,000
Payments for dividends	500,000
Payments for treasury stock
Balance, Dec. 31, 2011	?

6. Exercise 12-13B Part 1

(1)

Use this information to prepare a complete statement of cash flows for year 2011. The cash provided or used by operating activities should be reported using the direct method. (Amounts to be deducted should be indicated with a minus sign. Omit the “$” sign in your response.)

7. Exercise 12-13B Part 2

(2)

Refer to the statement of cash flows in part 1 to answer the following questions a through d:

(i) Which section shows the largest cash inflow?

(ii) Which section shows the largest cash outflow?

What is the largest individual item among the investing cash outflows?

The cash proceeds are larger from

From borrowing activities the company has

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