1nilB CHAPfER 12HOI\4EWORK

@l

CHAPTER T2 HOMEWORK

B.

Prablem 12-lA Statenent of cash flows (indirect method) L.O. 41 . Pl. P2, P3 Kazaam Company, a marchandiser, recenty comdeled its calendar-year2011 operations. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receisbla roftect cash receipts f,om custonrers, (3) all prrchases of in\entory ara on cr€dit, (4) all debits to AccorJnts Payable relect cash payments for in/entory, and (5) Other Expensas are paid in adwrne and are initially dabitad to Pnpaid Exponser. The company's balance sheets ard income stat€ment blb\,-

KAZAAM COMPAI,IY Comparatir,e B alarrco Sheets December 31, 2011 and 2010

2011 2010

$ 49,800 S 73,500 65,880 57,000

277,AOO 251,000 1,250 1,800

158,500 106,500 (35,875) (46,000)

s 516,555 $443,800

$ 82,80s S 115,000 11,000 7,000 60,000 48,750

157,500 149,000 25,500 0

179,750 124,050

$ 516,555 $443,800

KAZAAM COMPANY hcome Statem€nt

For Year Ended D€comber 31, 201 1

As3els Cash Accounts recei\EHe Marchandise insntory Prepaid expenses Equipment Accurn- depreciatN quipi"n€nt

Total asssls

LiabilitieBend Equity Accounts payabb Short-term notes payable Lorp-term notes payable C,ommon stock, $5 par raalue Paid-in capital in excess ofpar, cornmon stock R€tain€d eamings

Total liabilities and Gquity

Sales Cost of goods sold

Gross profit Operating exp€nses

Depreciatbn exp€nse Other expnses

Other gains (losses) Loss on sale of€quipmant

tr|come bebfe taxes tlcome taxes expanse

Itlet incorns

s 583,000 286,000

297,000

$ 20,000 134,000 154,0m

137,500 25,500

5,500

$ 1 12,000

l- _ __._, , -----,.__.- * - ,__., .-._-::::-:a

Addllional hformafon on Yegr 2A11 Tnnsctions a. The loss on the cash sal€ of equiprylent was $5,50O (details in b). b, Sold equiprnent costing $47,250, with accumulated depreciation of$30,125, for 911,625 cash. c. Purchasod equipment costing $99,250 by paying $25,0@ cash and signing a long.term note payable br

the balance- d. Borroued $4,000 cash by silnirE a short-t€rm note payabl€. e. Paid $63,@0 cesh to reducethe longiterm notes payabks. f. lssued 1,700 shar6 of cornmon stock br $20 cash per share. g. Daclarcd and paid cash dillderfrs of $ffi,300.

Required: 1. Prcpare a compl€te statefitsnt of cash florvs; repon [s op€rating actirities using the indirect meth(/,.

(Amounb to be deducted should be indicated with a minus sign. Omit the "3" sign in your response.)

KAZAAM COMPANY Statement of Cash Flom

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1nu13 CHAPTER 12HOMEWCIRK

For Year Ended December 31, 201 1 fana- frs

Cash forvs fiom operating actirities

itbtincdns, '...,.., .,.. i .,, , 1v Adiustments to reconcile net income to net

rua "on llGE-l]]]lil incstins activties

Cash f,orls ftom fnancino actirities Cashbaid dl nde: .lw Ca*h'fioriorivedottshrt4eifi rde : r ..'ly C'6h frorni63drEstsf. , .l' Cash paid br d$d€rds

tl.t ""sn

li's-JElllTll l fnancins actirities

Cash balance at beginning of2011

Cash balance at end of 201 1

$: _J12,([0

:*-,--;ri.g:

;.. ''.''..,...'.] ----:*2..5r.9-P.': 11,625'

-ii.szs j

. 63,000r r-*---.:*19-Q : " -..4:-s4-: : -56,300,

:q1 !3tlo

i,::: ':-:,a'::,':

check nv w ork eBmk Lhks (4 1

@071 fhe UcGnw+ltl, Cmpatries. Atl rtght6 rserved.

tt"t c*tn [l@G@Jl]l operatins actiities Cash llols fiom inestino actilities

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1/24113 CHAPTER l2HOMEWORK

@l

CHAPTER 12 HOMEWORK

9.

Problem 12-iM Cash flor,ts spreadsheet (indirect method) L.O" Pl. P2, P3, P4 Kazaam Company, a merchandber, recendy con$eted its calsndar-year 201 1 operations. For the year, (1) all sabs ere cr€dit sal€s, (2) all credits to Accounts Receirable refect cash receipts forn custorners, (3) all purchases of in\entory are m credit, (4) all detits to Acco$ts Payable reloct cash payments for in\€ntory, ard (5) Othu Expenses are paid in advance and ar6 inilially dobited to Prepakl Expanses. Tln company's balance sheeG and incorne statemont fdlcv.

KAZAAM COMPAI'IY Conparatiw B alance Sheets Decflnber 31, 201 1 ard 2010

2011 2010

$ 49,800 $ 73,000 65.860 54,000

277,fi0 25affi 1,000 1,800

157,500 106,500 (41,7501 (52,000)

$ 509,910 S435,800

$ 66,485 S 114,000 9,000 7,000

62,500 49,0m 162,250 150,500 35,250 0

174.425 115.300

$ 509,910 $435,800

Asti C€sh Accounts receigble M€rchandise im€ntory Prepaid expenses Equipment Accum. depreciatbn-Equipmgnt

Total assets

Liabililiesand Equity Accounts payabl€ Short-t€rm mt6s payable Long-term notes payable Common stock, $5 par mlue Pakt-in capitel in excess of par, common stock Ratairred eamings

Total liabilities and equity

KAZAAM COMPANY hcome Stat8ment

For Year Ended Decemb€r 31, 201 1 Sales Cost ofgoods sold

Gross profrt Operating expenses

Depreciation expenso Oth€r exp6nses

Other gains (bsses) Lo6s on sale ofequipment

hcome behre taxas hcome taxes expense

l.lat incoma

$ 5f):],000 289,000

294,000

$ 20,000 133,200 153,200

135,675 24,2fi

5,125

s 111,425

Addifonat htormation on Yep'r 2071 frrnsrctr-ons a, The loss on the cash sale ofequipmGnt was $5,125 (d€tails in b). b. Sdd equipment coEtir€ $46,875, with accumubted dep€chtkrn of $3O,250, br $11,500 cash. c, Purchased equiprnent costing $97,875 by payirE $30,000 cash and signing a lorg.term nota payable br

ths balance- d. Bono ted $2,000 cash by signing a short-term note payable. e. Paid $t4,375 cash !o roduce the kmg-t6rm notes payable. f. lssusd 2,350 shares of common stock ftrr $20 cash per shar€. g. Declarad and paid cash dividends of SSa3O0,

Required: Pepare a cornplate statem€nt of cash fforrrs using a speadsheel report its operating actirities using the indirect melhod. (Leave no cells blank - be certain to enter "0" wherever required. Omit the "S" sign in your rasponse.)

a. Net income w6s $111,425. b, Accounts receinble incrcased.

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1DU13 CHAPTER 12HOME\A,oRK

c. Merchardise inr,wrtory increased. d. Prapaid expenses decreased. e. Accounls payaHe decreased. f. Depreciation expense \,Es $20,000. g, Sold equiprnent costing $46,875, with accumulated depreciation of $30,250, for $11,5m cash. ThiE

yielded a loss of$5,125. h. Purchased equiprnent costing $97,875 by paying 930,0@ cash and (i.) by signing a longFtem note

paydle for the balance. j. Boncnaed $2,000 cash by signing a short+erm note payaH€. k. Paid $54,375 cash to rcduce the longrterm notes payaHe. l. lssued 2,350 shares of common stock br $20 cash per share. m. Declared and paid cash dMdends of $52,3)0.

KqZqAM COMPAT.IY Spreadsheet br Statement d Cash Floirc

For Year Ended December 31, 201 I AnalYsis of Charg,es

December December 3'1,2O1O Dettt Gedit 31,2011

Balance sheet--debit bal. accounts Cash$$$$ Accounts receirable

Merchandise inrentory

Prepaid expenses

Eguignent

Balance sheet---credit bal. accounts

Accum. depreciatiorF-Equip.

Accounts payable

Shofierm notes payable Long-tem notes payaHe

Cornmon stock, $5 par wlue Paidjn capital in excess sf par \ralu€, common stock

Retained eamings

Statement of cash forvs Operating acti\ities

Net income

lncrease in accts. recei\rble lncrease in merch. in€ntory Decrease in prepaid expenses

Decrease in accornts payaHe

Depreciation expense

Loss on sale ofequipment ln\esting activties

Receipt frorn sale of equipment

Payment to purchase equipment Financing acti\ities

Bonorved on short-term note

Payment on long4erm note

lssued common stock for cash

Payments of cash difdends Noncash in\esting and financing acti\ities

Purchase of equip- linanced by longFterm note payaHe

. $r rc

checkruwork eBooklhks a4l refsences

fr,y A.- tF?

@01'l lhe ilccraw+lill Cmpanles. All rlghb reseryed,

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1D4t13 CHAPTER 12HOi/EWORK

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CHAPTER 12 HOiIEV\IORK

10.

Problent 12-4A Statement of cash flovvs (indirect method) L.O. P1 . P2. P3 Galley Corp., s merchandiser, recently completedits 2011opsrations. Forthe year, (1) all sales arecredit sales, (2) all crEdits to Accounts Receiiable refect cash receipts from customers, (3) all pumhases of in€ntory are on credit, (4) all debits to Accounts Payable eflect cash payments for inrentory, (5) Other Expenses ara all cash exp€nses, and (6) any chango in lnconre Taxes Payable rellects the accrual and cash payment oftaxes. Th€ company's balance sheets and income staternent bllo,v-

GALLEY CORPORATON Comparatiw Balance Sheets December 31, 2011 and 2010

2011 2010 s 169,000 s 131,000

83,000 73,000 610.000 515,000 325,000 296,000 (160,000) (103,000)

s 1,027,000 s 912,000

s 117,000 s 120.000 28,000 25,000

592,000 566,000 203,000 164,000 87,000 37,000

s1.027.000 s 912.000

GALLEY CORPORATION lncome Statement

For Year Ended December 31, 2011

Assets Cash Accounts recei\6ble Merchandise inrnntory Equipment Accum - depreciation-Equipment

Total assets

Liabiliti€s and Equity Accounts payable hcometaxes payable Comrnon stock, $2 par r€lue Paid.in capital in excess of par ralue, common stock Retained eamings

Total liabilities and equity

Sales Cost ofgoods sold

Gross prolit Operating expenses

Depreciation expense Other expenses

hcome befrre taxes hcometaxes expense

l.let income 5 135.000 ;;; :i.:i,ll:':=:;::t:;*';';:;t=:.:a=*.,=r===#ffi

Additonal hformalion on Year 2071 ftensact'ons a. Purchased equipment for 529,000 cash. b. lssued 13,000 shaEs ofcommon stock br $5 cash per share. c. Declared and paid S85,00O in cash dividends.

Required: Prepare a complete statement of cash flows; rcport its cash inllo\rs and cash outflotrs from operating actiilties accoding to the ,;1direcl m6thod. (Amounts to be deducted should be indicat€d with a minus sign. Omit lhe "S" dgn in your rosponse.)

GALLEY CORPORATION Statement of Cash Florvs

For Year Ended December 31, 201 1

s 1,798,000 1,087,000

71 1,000

$ 57,000 498,000 555,000

156,000 21,000

Cash iorirrs from operating actiUties

l.let income i- s 135.000

57,000

0

Adiustinents to reconcile n€t income to net cash provided bv oDeralinq actMties:

1t2

fif ,) - r- /,() N"t cash [@6]ll!l operatir€ acti\ities

Cash flols from in\€sting acti\ities khruddtu

CHAPTER 12 HOME\A/ORK

j 0i

{5,000i ,. 6,5r0(n

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t'let casn lffiEl]lT fi nancins actirities

Netinflgeeini'€rs6 ..' '.. ,.. , , ' -', l- Cash balance at beginning of 201 1

Cash balance at end of201'l

$:

chskwwtrk e8ookLhl(s (31

---'-l

refsences

@01t The ilcoraw+lill Companics. Atl rlghb rcceflcd.

Cash flo\^,s ftom fnancino acti\ities

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1n4B CHAPTER 12HOIiIEWORK

CHAPTER 12 HOMEWORK

11.

Problem 12-644 Cash florls spreadsheet (indirect nrthod) L.O. Pl. P2, P3, P4 Galley Corp-, a merchandiser, recently completed its 2011 operations. For the year, (1) all sales arc credit sales. 12) all credits to Accounts Receivabb retect cash receiDts flom custorn€rs, (3) all purchases of

@l nent$ for inlentory, (5) Other'abb retects the accrual and cash c€lyment of taxes. The cornpany's balance sheets and incorne staternent blbu,.

GALLEY CORPORATION Cornparath,€ Balance S heets Decemb€r 31, 201 1 and 2010

2011 2010

$ 188,120 $ 127,512 95,644 88,044

670,112 582,912 416,852 324,852 (168,120) (111,320)

$1,202,608 $1,012,000

$ 130,192 $ 65,792 30,112 26,312

585,700 559,700 213,500 177,1@ 243.1M 182.096

$1,202,608 $1,012,mO

GALLEY CORPORATION hcorno St€t€ment

For Yeer Ended December 31, 2011

Assets Cash Accounts rec€i\able Merchandise in\entory Equipment Accum. depreciatkrn-E quipment

Total assets

Liabilidesand Equiry Accounts payabh hcometaxes payable Comrnon stock, $2 par \alue Paid-in capital in excess of par \alu€, colrmon stock Rstain€d eamings

Totat liabilitios aM equity

Sales Cost ofgoods sold

Gross prolit Operating expenses

Depreciation expense Other expenses

hcoma befure taxes hcome taxes expense

hlet incorne

$ 56,800 533,458

s 2,053,500 1.273.fiA

780,330

5S0,258

lga,o72 37,064

$ 153.008

Addilional hformadon on Year 2017 Transaco"ons a. Purchased equipfflent for $92,000 cash. b. lssu€d 13,0@ shares ofcommon stock br$4.8O cash pershare. c. Declared and paid $92,000 in cash dividends.

Required: Prcpare a compbte statBmenl of cash florys using a spreadslEet; report op€rating aclivities und€r th€ indirect ffEthod- (Leavo no cslls blank - be cerlain to enter "0" wherever required. &nit the "9" sign in your response.)

a. Net incomo was $153,0@. b. Accounts receimble increased. c. Merchendise intentory inc'eased. d. Accounls payable decreased- e. lncorno taxes payable increased- f. DepGciation exp€nse was 556,800. g- Purchased equiprnent for $92,000 cash. h. lssu€d 1 3,000 sharee at S4-8O cash por share- i. Declared and paid $92,00O ofcash dividends.

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'v24113 CHAPTER l2HOMEVVORK

GALLEY CORPORATION Spreadsheet for Statement of Cash Flovus

For Year Ended December 31, 201 1

Pa,1 x- # /l

Balance sheet-debit bal. accor.mts Cash

Accdrnts rcceirable

Merchandise inwntory Equipment

Balance sheet---+redit bal. accounts Accum. depreciation-Equip Accounts payable

lncome taxes payable

Cornmon stock, $2 parralue

Paiclin excess of par ralue, common stock Retained eamings

Statement of cash flo,r,s Operating activties

Net income

lncrease in accounts receirable lncroase in merch. in\€ntory

Decrease in accounts payaHe

hcrease in income tax payable Depreciation expense

lnr€sting actir,ities Payment fur equipment

Financing acti\ities lssued common stock for cash Paid cash di\,idends

December Analysis ofChanges December 31,2010 Detit Gredit 31,2011

$: : $t

$: $' :

chsk n w ork eB@k Lhks (4) ref sencs

@0ll lhe lf ccraw+lill Cmpanies, All righb reseryed.

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