ACCOUNTING-E13-1 Matching Items Reported to Cash Flow Statement Categories

Chapter 13 Homework QuestionsE13-1 Matching Items Reported to Cash Flow Statement Categories (Indirect Method)LO1Reebok International Ltd. is a global company that designs and markets sportsand fitness products, including footwear, apparel, and accessories. Some of the items included in itconsolidated statement of cash flows presented using the indirect method are listed here.Indicate whether each item is disclosed in the Operating Activities (O), InvestingActivities (I), or Financing Activities (F) section of the statement or (NA) if the itemdoes not appear on the statement. (Note: This is the exact wording used on the actualstatement.)1.2.3.4.5.6.7.8.9.10.Dividends paid.Repayments of long-term debt.Depreciation and amortization.Proceeds from issuance of common stock to employees.[Change in] Accounts payable and accrued expenses.Cash collections from customers.Net repayments of notes payable to banks.Net income.Payments to acquire property and equipment.[Change in] Inventory.E13-6 Reporting Cash Flows from Operating Activities (Indirect Method) LO2The following information pertains to Satellite Company:Income Statement for 2012SalesExpensesCost of goods sold$$Depreciation expenseSalaries expense51,7758,40011,400Net incomeAccounts receivableInventorySalaries payable71,575$Partial Balance Sheet2012$86,60010,90015,0252011$14,00012,8009,1001,670940Required:Present the operating activities section of the statement of cash flows for SatelliteCompany using the indirect method.Statement of Cash FlowsE13-13 (Supplement B) Computing and Reporting Cash Flow Effects of the Sale ofEquipmentDuring the period, Wong Company sold some excess equipment at a loss. The followinginformation was collected from the company’s accounting records:From the Income StatementDepreciation expenseLoss on sale of equipmentFrom the Balance SheetBeginning equipmentEnding equipmentBeginning accumulateddepreciationEnding accumulateddepreciation$8604,00019,10010,4001,8601,890No new equipment was bought during the period.Required:1. For the equipment that was sold, determine its original cost, its accumulateddepreciation, and the cash received from the sale. (Use the equipment andaccumulated depreciation T-accounts to infer the book value of the equipment sold.)2. Wong Company uses the indirect method for the Operating Activities section of the cashflow statement. What amount related to the sale would be added or subtracted in thecomputation of Net Cash Flows from Operating Activities?The loss ofwould be added.3. What amount related to the sales would be added or subtracted in the computation ofNet Cash Flows from Investing Activities?The cash inflow ofwould be added.E13-16 Preparing a Statement of Cash Flows (Indirect Method) LO2, 4, 6Deep Waters Company was started several years ago by two diving instructors. The company’scomparative balance sheets and income statement are presented below, along with additionalinformation.2012Balance Sheet at December 31CashAccounts receivablePrepaid expensesEquipment2011Net income$4,0008005005,100$4,850$4501,6003,050$1,1001,0002,750$Income Statement for 2012Lessons revenueWages expenseOther expenses3,700900100400$Wages payableContributed capitalRetained earnings$5,100$4,850$33,95030,0003,650$300Additional Data:a. Prepaid expenses relate to rent paid in advance.b. Other expenses were paid in cash.c. Purchased equipment for $400 cash at the end of 2012 to be used starting in 2013.d. An owner contributed capital by paying $600 cash in exchange for the company’s stock.Required:Prepare the statement of cash flows for the year ended December 31, 2012, using the indirectmethod.DEEP WATERS COMPANYStatement of Cash FlowsFor the Year Ended December 31, 2012Cash flows from operating activities:Net cash used for operating activitiesCash flows from investing activities:Net cash used for investing activitiesCash flows from financing activitiesNet cash provided by financing activitiesNet decrease in cash during the yearCash balance, January 1, 2012Cash balance, December 31, 2012E13-5 Comparing the Direct and Indirect Methods LO1Indicate whether the following cash flows are used under direct, indirect method or both.Cash Flows (and Related Changes)1.Accounts payable increase or decrease2.Payments to employees3.Cash collections from customers4.Accounts receivable increase or decrease5.Payments to suppliers6.Inventory increase or decrease7.Wages payable, increase or decrease8.Depreciation expense9.Net income10.Cash flows from operating activities11.Cash flows from investing activities12.Cash flows from financing activities13.Net increase or decrease in cash during the periodStatement of CashFlows methodP13-1 Preparing a Statement of Cash Flows (Indirect Method) LO1, 2, 4, 6HiDef Films , Inc., is developing its annual financial statements at December 31, 2012. Thestatements are complete except for the statement of cash flows. The completed comparativebalance sheets and income statement are summarized as follows:20122011Cash68,55064,700Accounts receivable16,55023,550Merchandise inventory23,55018,700Property and equipment210,850151,100Less: Accumulated depreciation(60,200)(46,350259,300211,70010,50020,8005,7001,90061,70072,800100,40066,50081,00049,700259,300211,700Balance Sheet at December 31Accounts payableWages PayableNote payable, long-termContributed capitalRetained earningsIncome Statement for 2010Sales201,000Cost of goods sold98,000Depreciation expense13,850Other expenses43,600Net income45,550Additional Data:a.Bought equipment for cash, $59,750.b.Paid $11,100 on the long-term note payable.c.Issued new shares of stock for $33,900 cash.d.Dividends of $14,250 were declared and paid.e.Other expenses all relate to wages.f.Accounts payable includes only inventory purchases made on credit.Required:1. Prepare the statement of cash flows using the indirect method for the year endedDecember 31, 2012HIDEF FILMS, INC.Statement of Cash FlowsFor the Year Ended December 31, 2012Cash flows from operating activities:Adjustments to reconcile net income to net cashprovided by operating activities:Net cash provided by operating activitiesCash flows from investing activities:Net cash used by investing activitiesCash flows from financing activities:Net Cash provided by financing activitiesNet increase in cash during the yearCash balance, January 1, 2012Cash balance, December 31, 2012P13-2 Preparing a Statement of Cash Flows (Indirect Method) LO1, 2, 4, 6BG Wholesalers is developing its annual financial statements at December 31, 2013. Thestatements are complete except for the statement of cash flows. The completed comparativebalance sheets and income statement are summarized:20122011Cash39,00031,400Accounts receivable35,30031,100Merchandise inventory46,00040,000Property and equipment124,900101,900Less: Accumulated depreciation(33,400)(26,600211,800177,800Accounts payable39,40030,700Accrued expenses3,0003,600Note payable, long-term46,40050,600Contributed capital93,60074,300Retained earnings29,40018,600211,800177,800Balance Sheet at December 31Income Statement for 2010Sales134,000Cost of goods sold84,000Other expenses39,200Net income10,800Additional Data:a. Bought equipment for cash, $23,000.b. Paid $4,200 on the long-term note payable.c. Issued new shares of stock for $19,300 cash.d. No dividends were declared or paid.e. Other expenses included depreciation, $6,800; wages, $20,800; taxes, $6,800; other, $4800.f. Accounts payable includes only inventory purchases made on credit. Because there are noliability accounts relating to taxes or other expenses, assume that these expenses were fully paidin cash.Required:1. Prepare the statement of cash flows for the year ended December 31, 2013, using theindirect method.BG WholesalersStatement of Cash FlowsFor the Year Ended December 31, 2012Cash flows from operating activities:Adjustments to reconcile net income to net cashprovided by operating activities:Net cash provided by operating activitiesCash flows from investing activities:Net cash used by investing activitiesCash flows from financing activities:Net Cash provided by financing activitiesNet increase in cash during the yearCash balance, January 1, 2012Cash balance, December 31, 2012

 

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