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Beg. Bal.
12/31/2005 Analysis of Changes in Account Balances Entry No. Entry - Dr. Entry No. Entry - Cr. 300 100 200 80 1,000
Total Debits Credits: Accumulated depreciation Account payable Accrued operating exp. payable Income taxes payable Common stock Retained earnings Total Credits Cash Flow-Operations
1,680
2,150
Non-Cash Invest./Financing Increase/Decrease in Cash 2. A cash flow statement using the direct method together with a
Ex 2 - Worksheet Worksheet for Cash Flow Debits: Cash Accounts receivable Inventory Prepaid operating expenses Property plant equipment
Analysis of Changes in Account Balances Beg. Bal. Entry No. Entry - Dr. Entry No. Entry - Cr. Ending Bal 300 420 110 165 200 140 80 60 1,000 1,380
Total Debits Credits: Allowance for doubtful Acct. Accumulated depreciation Accounts payable Accrued Operating exp. Payable Income taxes payable Common stock Retained earnings
Non-Cash Invest./Financing
Increase/Decrease in Cash
Ex 2 - Malmgren Worksheet for Cash Flow Debits: Cash Accounts receivable Inventory Prepaid operating expenses Property plant equipment
Example 2 - Solutions 2005 Analysis of Changes in Account Balances Beg. Bal. Entry No. Entry - Dr. Entry No. 300 11 120 110 2 55 200 3 80 4 1,000
Total Debits Credits: Allowance for doubtful Acct. Accumulated depreciation Accounts payable Accrued Operating exp. Payable Income taxes payable Common stock Retained earnings
90
Total Credits Cash Flow-Operations Net income Increase in accounts rec. (net) Decrease in inventory Decrease in prepaid operating expense Depreciation expense Increase in accounts payable Decrease in accrued operating exp. payable Increase in income taxes payable Net cash flow from operations Cash Flow - Investing Purchase of fixed assets Net cash flow from investing
1,680
1 3 4 5 6 8
Cash Flow - Financing Payment of dividends Net cash flow from financing Non-Cash Invest./Financing
10
Increase/Decrease in Cash 2. A cash flow statement using the direct method together with a
11
Cash Collections From Customers: Sales Less: increase in accounts receivable Accts receivable - 1/1 Less: write-off of accts rec.(net) Adj. accounts rec. 1/1 Accts receivable - 12/31 Cash Collections From Customers: Cash Payments For Merchandise Cost of sales Less: decrease in inventory (200-140) Purchases Less: increase in accounts payable (400-300) Cash Payments For Merchandise Cash Payments For Operating Expenses Operating expenses Less: Depreciation expense Bad debt expense Other operating expenses Less: decrease in prepaid expenses (80-60) Add: decrease in operating exp payable (300-210) Cash Payments For Operating Expenses Cash Payments For Income Taxes Income tax expense Less: increase in income taxes payable (130-100) Cash Payments For Income Taxes
2,165 Notes
50
90
140
550
380 (380)
50 (50)
120
120
(380)
150 $550
nts receivable
(77) 4,923
tory (200-140)
e taxes payable
ome Taxes
Problem 23-8 Requirements: 1. Complete the worksheet below. 2. Prepare a Statement of Cash Flow using the indirect method 3 Compute net cash provided by operating activities under the direct method Hint: Use P23-6 (sol) as a guide) Prob. 23-8 1. Worksheet for Cash Flow Debits: Cash Accounts receivable Mdse inventory Investment --Avail for sale Equipment Buildings Land
2011 Analysis of Changes in Account Balances Beg. Bal. Entry No. Entry - Dr. Entry No. Entry - Cr. 51,000 130,000 61,000 85,000 48,000 145,000 25,000
Total Debits Credits: Allowance for doubtful accts Accumulated depr.-equip Accumulated depr.-building Accounts payable Income taxes payable L-term notes payable Common stock Retained earnings
Total Credits Cash Flow-Operations Net income Increase in accts. Rec.(net) Inc. in inventory Gain on sale of investments Depreciation expense Loss on sale of equipment Increase in accts payable Increase in taxes payable Net cash flow from operations Cash Flow - Investing
545,000
Increase/Decrease in Cash
2012 Ending Bal 70,000 155,000 75,000 55,000 70,000 145,000 40,000
610,000
Problem 23-8 Requirements: 1. Complete the worksheet below. 2. Prepare a Statement of Cash Flow using the indirect method 3 Compute net cash provided by operating activities under the direct method Hint: Use P23-6 (sol) as a guide) Prob. 23-8 1. Worksheet for Cash Flow Debits: Cash Accounts receivable Mdse inventory Investment --Avail for sale Equipment Buildings Land
2011 Analysis of Changes in Account Balances Beg. Bal. Entry No. Entry - Dr. Entry No. Entry - Cr. 51,000 14 19,000 130,000 2 25,000 61,000 3 14,000 85,000 9 5,000 4 48,000 5 32,000 5 145,000 25,000 12 15,000
2012 Ending Bal Notes 70,000 155,000 75,000 35,000 55,000 10,000 70,000 145,000 40,000
Total Debits Credits: Allowance for doubtful accts Accumulated depr.-equip Accumulated depr.-building Accounts payable Income taxes payable L-term notes payable Common stock Retained earnings
545,000 8,000 14,000 28,000 60,000 10,000 70,000 260,000 95,000 2 6 6 7 8 13 12 1 2,000 13,000 9,000 6,000 2,000 35,000 15,000 67,000
6,000
10
8,000
11
70,000
Total Credits Cash Flow-Operations Net income Increase in accts. Rec.(net) Inc. in inventory Gain on sale of investments Depreciation expense Loss on sale of equipment Increase in accts payable Increase in taxes payable Net cash flow from operations
545,000
610,000 Notes 1 67,000 2 3 4 6 5 7 8 22,000 3,000 6,000 2,000 100,000 52,000 48,000 23,000 14,000 15,000 2
Cash Flow - Investing Sale of investments Sale of equipment Purchase of equipment Purchase of investments Net cash flow provided from investing Cash Flow - Financing Payment on L-T notes Payment of dividends Issuance of common stock Net cash used by financing activities Non-Cash Invest./Financing Issuance of common stock for land Increase/Decrease in Cash Notes
4 5
50,000 1,000 5 9 51,000 10 11 32,000 5,000 37,000 8,000 70,000 78,000 12 14 15,000 19,000 (43,000)
4 5
14,000
13
12
19,000
2 Increase in accounts receivable (net) Accts rec. less allow for doubtful accounts, 1/1(130,000-8,000) Accts rec. less allow for doubtful accounts, 12/31(155,000-10,000) Increase in accounts receivable (net) 4 Proceeds on sale of investments Cost Add: Gain Proceeds 5 Proceeds on sale of equipment Cost of equipment Accumulated depr. Book value Loss on sale Proceeds
6 Depreciation expense Accum. Depr. Equip. 1/1 14,000 Less Accum depr. On equip sold 6,000 Adj. bal. 8,000 Accum. Depr. Equip. 12/31 21,000 Depr. Expense - equip. 13,000 Depr. Expense - bldg (37,000-28,000) 9,000 Total depr. Expense 22,000 P23-8 Sharpe Company Statement of Cash Flows For the Year Ended December 31, 2010 2 Cash flows provided from operating activities Net income Ajustments to reconcile net income to net cash provided by operating activities: Increase in accts. Rec.(net) Inc. in inventory Gain on sale of investments Depreciation expense Loss on sale of equipment Increase in accts payable Increase in taxes payable Net cash provided by operating act. Cash flows provided from investing activities Sale of investments Sale of equipment Purchase of equipment Purchase of investments Net cash flow provided from investing Cash flows used by financing activities Payment on L-T notes Payment of dividends Issuance of common stock Net cash used by financing activities Net increase in cash Cash, January 1, 2012 Cash, December 31, 2012 Noncash Investing and Financing activity Issuance of common stock for land P23-8 3 Net cash provided by operating activities under the direct method Cash receipts from customers Cash payments Cash payments to suppliers Cash payments for operating expenses Cash payments for income taxes Net cash provided by operating activities Cash receipts from customers Sales Less: Increase in accounts receivable Accts. Receivable, 1/1 Less: write-offs of accts rec. Adjusted balance, 1/1 Accts. Receivable, 12/31 Cash receipts from customers Cash payments to suppliers Cost of goods sold Add: increase in inventory (61,000-75,000) Purchases Less: increase in accounts payable (66,000-60,000) Cash payments to suppliers Cash payments for operating expenses Operating expense Less: Bad debt expense Allow for doubtful accounts, 1/1 Less: write-off of accts. Rec. Total Less: Allow for doubtful accts, 12/31 Depreciation expense Cash payments for operating expenses Cash payments for income taxes Income tax expense Less: Increase in income taxes payable ( 12,000-10,000) Cash payments for income taxes 925,000 608,000 226,000 43,000
$67,000
-19,000 48,000
$15,000
877,000 48,000
(25,000) 925,000
Problem 23-6 Worksheet for Cash Flow Debits: Cash Accounts receivable Mdse inventory Investment --Avail for sale Equipment Buildings Land
2011 Analysis of Changes in Account Balances Beg. Bal. Entry No. Entry - Dr. Entry No. Entry - Cr. 33,750 60,000 24,000 38,500 18,575 56,250 7,500
2012 Ending Bal 42,000 70,500 30,000 22,250 30,000 67,500 7,500
Total Debits Credits: Allowance for doubtful accts Accumulated depr.-equip Accumulated depr.-building Accounts payable Income taxes payable L-term notes payable Common stock Retained earnings
238,750
269,750
Problem 23-6 Worksheet for Cash Flow Debits: Cash Accounts receivable Mdse inventory Investment --Avail for sale Equipment Buildings Land
2011 Analysis of Changes in Account Balances 2012 Beg. Bal. Entry No. Entry - Dr. Entry No. Entry - Cr. Ending Bal 33,750 15 8,250 42,000 60,000 3 10,500 70,500 24,000 7 6,000 30,000 38,500 10 8,750 9 25,000 22,250 18,575 12 15,000 4 3,750 30,000 56,250 13 11,250 67,500 7,500 7,500
Total Debits Credits: Allowance for doubtful accts Accumulated depr.-equip Accumulated depr.-building Accounts payable Income taxes payable L-term notes payable Common stock Retained earnings
238,575 1,500 2,250 9,000 24,750 2,625 31,000 125,000 42,625 3 4 4,650 750 3 5 5 6 8 14 1 5,400 4,125 4,500 10,250 750 25,000 42,500
11 2 14
Total Credits Cash Flow-Operations Net income Increase in accts rec (net) Gain on sale of mach. Depreciation expense Increase in accts payable Increase in inventory Increase in accrued payable Gain on sale of investments Net cash flow from operations Cash Flow - Investing Sale of machine Sale of investments Purchase of investments Purchase of machine Addition to building Net cash flow from investing Cash Flow - Financing Payment of dividends Payment on L-T note Net cash flow from financing Non-Cash Invest./Financing Increase/Decrease in Cash P-23-6 Part b
238,750
269,750
1 4 5 6 8
42,500 3 800 8,625 10,250 7 750 9 62,925 3,750 19,500 43,425 6,000 9,750
4 9
2,200 28,750 10 12 13 30,950 2 11 8,750 15,000 11,250 35,000 21,125 10,000 31,125 (31,125)
(4,050)
15
8,250
8,250
Marcus Inc Statement of Cash Flows For the year ended December 31, 2012 Cash flows provided from operating activities Net income Ajustments to reconcile net income to net cash provided by operating activities: Increase in accts rec (net) (9,750) Gain on sale of mach. 800 Depreciation expense 8,625 Increase in accts payable 10,250 Increase in inventory (6,000) Increase in accrued payable 750 Gain on sale of investments (3,750) Net cash provided by operating act. Cash flows used by investing activities Sale of machine 2,200 Sale of investments 28,750 Purchase of investments (8,750) Purchase of machine (15,000) Addition to building (11,250) Net cash used by investing act. Cash flows from financing activities Payment of dividends (21,125) Payment on L-T note (10,000) Net cash used by financing act. Net increase in cash Cash, January 1, 2012 Cash, December 31, 2012 P23-6 Part a. Cash provided by operations - Direct Method Cash receipts from customers Cash payments: Cash payments to suppliers Cash payments for operating expenses Net cash provided by operating activities $524,850 375,750 105,675
$42,500
925 43,425
(4,050)
481,425 $43,425
Computations: Cash receipts from customers: Sales Less increase in accounts receivable (adj. for write-off of A/R) Accts. Receivable, 1/1 60,000 Write-off of accts rec. (4,650) Total 55,350 Less: Accts. Receivable, 12/31 70,500 Cash receipts from customers: Cash payments to suppliers Cost of goods sold Add: increase in inventory (30,000-24,000) Purchases Less: increase in accts payable (35,000-24,750) Cash payments to suppliers Cash payments for operating expenses Operating expenses Less: depreciation expense bad debt expense Cash payments for operating expenses
$540,000
15,150 $524,850
E23-11 Worksheet for Cash Flow 2011 Analysis of Changes in Account Balances 2012 Debits: Beg. Bal. Entry No. Entry - Dr. Entry No. Entry - Cr. Ending Bal Cash 1,100 13 700 1,800 Receivables 1,300 2 450 1,750 Inventory 1,900 3 300 1,600 Plant asset 1,700 8 70 1,900 9 130 L-T investments 1,470 7 170 1,300
Total Debits Credits: Accumulated deprec. Accounts payable Accrued liabilities Bonds payable Capital stock Retained earnings
7,470 1,170 800 250 1,650 1,700 1,900 4 5 6 10 50 250 11 8 1 130 70 810 30 400
12
260
Total Credits Cash Flow-Operations Net income Increase in accounts rec (net) Decrease in inventory Depreciation expense Increase in accounts payable Decrease in accrued liab. Gain on sale of investments Net cash provided by operations
7,470
8,350
1 3 4 5
Cash Flow - Investing Sale of investments Purchase of plant assets Net cash provided by investing activities Cash Flow - Financing Retirement of bonds payable Issuance of capital stock Payment of cash dividends Net cash used by financing activities Non-Cash Invest./Financing Common stock for plant assets Increase/Decrease in Cash E23-11
10 11 130 12 130 8 70 8 13
(380)
700
Fairchild Company Statement of Cash Flows For the Year Ended December 31, 2012 (Indirect Method) Cash flows from operating activities Net income Adjustment to reconcile net income to net cash provided by operating activities: Increase in accounts rec (net) (450) Decrease in inventory 300 Depreciation expense 30 Increase in accounts payable 400 Decrease in accrued liab. (50) Gain on sale of investments (250) Net cash provided by operations Cash flows from investing activities Sale of investments 250 Purchase of plant assets -130 Net cash provided by investing activities Cash flows from investing activities Retirement of bonds payable (250) Issuance of capital stock 130 Payment of cash dividends (260) Net cash used by financing activities Net increase in cash Cash, January 1, 2012 Cash, December 31, 2012 Noncash Investing and financing activities Issuance of common stock for plant assets
$810
150 960
120
$70
E23-11 Worksheet for Cash Flow 2011 Analysis of Changes in Account Balances Debits: Beg. Bal. Entry No. Entry - Dr. Entry No. Entry - Cr. Cash 1,100 Receivables 1,300 Inventory 1,900 Plant asset 1,700 L-T investments 1,470
Total Debits Credits: Accumulated deprec. Accounts payable Accrued liabilities Bonds payable Capital stock Retained earnings
7,470
8,350
E23-12
Direct Method Cash flows from operating activities Cash collected from customers Less: Cash paid for merchandise Cash paid for selling & administrative expenses Cash paid for income taxes Net cash provided by operating activities Cash collected from customers Less increase in accounts receivable (adj. for write-off of A/R) Accts. Receivable, 1/1 Less: Write-off of accts rec. Total Less: Accts. Receivable, 12/31 Cash collected from customers: Cash paid for merchandise Cost of goods sold Less: Decrease in inventory (1,900-1,600) Purchases Less: Increase in accounts payable (1,200-800) Cash paid for merchandise Cash paid for selling/administrative expenses Selling and adminstrative expense Less: depreciation expense Add: decrease in accrued liabilities (250-200) Cash paid for selling/administrative expenses Cash paid for income taxes Income tax expense Increase or decrease in income taxes payable Cash paid for income taxes
5,490 960
(450) 6,450
930 30 50 20 950
540 0 540
E23-12
Fairchild Company Statement of Cash Flows For the Year Ended December 31, 2012 (Direct Method) Cash flows from operating activities Cash collected from customers Less: Cash paid for merchandise Cash paid for selling & administrative expenses Cash paid for income taxes Net cash provided by operating activities Cash flows from investing activities Sale of investments Purchase of plant assets Net cash provided by investing activities Cash flows from investing activities Retirement of bonds payable Issuance of capital stock Payment of cash dividends Net cash used by financing activities Net increase in cash Cash, January 1, 2012 Cash, December 31, 2012 Noncash Investing and financing activities Issuance of common stock for plant assets
5,490 960
$70
Analysis of Changes in Account Balances Beg. Bal. Entry No. Entry - Dr. Entry No. Entry - Cr.
Ending Bal
Non-Cash Invest./Financing
Increase/Decrease in Cash