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:	Compute cash received from customers:
	Sales	$	510,000
	Accounts receivable, December 31, 2011		25,200
	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

 

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
Amortization expenses–Patents		5,400
Utilities expense		19,125			364,860
					562,140
Gain on sale of equipment					7,200
Net income				$	569,340

 

 

 

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		4,500	decrease

 

 

 

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
Amortization expenses—Patents		5,400
Utilities expense		19,125			364,860
					562,140
Gain on sale of equipment					7,200
Net income				$	569,340

 

 

 

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		4,500	decrease

 

 

 

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.

 

 

 

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

 

 

 

GECKO INC. Income Statement For Year Ended June 30, 2011
Sales				$	668,000
Cost of goods sold					412,000
Gross profit					256,000
Operating expenses
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
Net income				$	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

 

 

 

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	218,000
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:

 

 

 

a.	(i) Which section shows the largest cash inflow?

 

 

 

	(ii) Which section shows the largest cash outflow?

 

 

 

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

 

 

 

c.	The cash proceeds are larger from

 

 

 

d.	From borrowing activities the company has