Accounting
27th Edition
ISBN: 9780357155899
Author: Carl S. Warren; James M. Reeve; Jonathan Duchac
Publisher: Cengage Learning US
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Textbook Question
Chapter 16, Problem 16.2BPR
Statement of
The comparative
| Dec 31, 20Y4 | Dec 31, 20Y3 | |
| Assets | ||
| Cash | $ 443,240 | $ 360,920 |
| 665,280 | 592,200 | |
| Inventories | 887,880 | 1,022,560 |
| Prepaid expenses | 31,640 | 25,200 |
| Land | 302,400 | 302,400 |
| Buildings | 1,713,600 | 1,134,000 |
| Accumulated |
(466,200) | (414,540) |
| Machinery and equipment | 781,200 | 781,200 |
| Accumulated depreciation—machinery and equipment | (214,200) | (191,520) |
| Patents | 106,960 | 112,000 |
| Total assets | $4,251,800 | $3,724,420 |
| Liabilities and |
||
| Accounts payable | $ 837,480 | $ 927,080 |
| Dividends payable | 32,760 | 25,200 |
| Salaries payable | 78,960 | 87,080 |
| Mortgage note payable, due in 10 years | 224,000 | 0 |
| Bonds payable | 0 | 390,000 |
| Common stock, $S par | 200,400 | 50,400 |
| Paid-in capital: Excess of issue price over par—common stock | 366,000 | 126,000 |
| 2,512,200 | 2,118,660 | |
| Total liabilities and stockholders' equity | $4,251,800 | $3,724,420 |
An examination of the income statement and the accounting records revealed the following additional information applicable to 20Y4:
a. Net income, $524,580.
b. Depreciation expense reported on the income statement: buildings, $51,660; machinery and equipment, $22,680.
c. Patent amortization reported on the income statement, $5,040.
d. A building was constructed for $579,600.
e. A mortgage note for $224,000 was issued for cash.
f. 30.000 shares of common stock were issued at $13 in exchange for the bonds payable.
g. Cash dividends declared, $131,040.
Instructions
Prepare a statement of cash flows, using the indirect method.
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Statement of Cash Flows—Direct Method
The comparative balance sheet of Canace Products Inc. for December 31, 20Y6 and 20Y5, is as follows:
Dec. 31, 20Y6
Dec. 31, 20Y5
Assets
Cash
$277,770
$258,990
Accounts receivable (net)
100,630
93,020
Inventories
284,060
275,390
Investments
0
106,700
Land
145,700
0
Equipment
313,410
243,490
Accumulated depreciation-equipment
(73,370)
(65,660)
Total assets
$1,048,200
$911,930
Liabilities and Stockholders' Equity
Accounts payable
$189,720
$179,650
Accrued expenses payable
18,870
23,710
Dividends payable
10,480
8,210
Common stock, $10 par
56,600
44,680
Paid-in capital: Excess of issue price over par-common stock
212,780
124,020
Retained earnings
559,750
531,660
Total liabilities and stockholders’ equity
$1,048,200
$911,930
The income statement for the year ended December 31, 20Y6, is as follows:
Sales
$1,566,470
Cost of…
Statement of Cash Flows—Direct Method
The comparative balance sheet of Canace Products Inc. for December 31, 20Y6 and 20Y5, is as follows:
Dec. 31, 20Y6
Dec. 31, 20Y5
Assets
Cash
$234,050
$216,220
Accounts receivable (net)
84,790
77,660
Inventories
239,340
229,910
Investments
0
89,080
Land
122,770
0
Equipment
264,080
203,280
Accumulated depreciation-equipment
(61,820)
(54,820)
Total assets
$883,210
$761,330
Liabilities and Stockholders' Equity
Accounts payable
$159,860
$149,980
Accrued expenses payable
15,900
19,790
Dividends payable
8,830
6,850
Common stock, $10 par
47,690
37,310
Excess of paid-in capital over par
179,290
103,540
Retained earnings
471,640
443,860
Total liabilities and stockholders’ equity
$883,210
$761,330
The income statement for the year ended December 31, 20Y6, is as follows:
Sales
$1,406,850
Cost of merchandise sold
579,300
Gross…
Statement of cash flows—indirect method
The comparative balance sheet of Merrick Equipment Co. for December 31, 20Y9 and 20Y8, is as follows:
Line Item Description
December 31, 20Y9
December 31, 20Y8
Assets
Cash
$230,690
$215,090
Accounts receivable (net)
83,570
77,250
Inventories
235,920
228,730
Investments
0
88,610
Land
121,010
0
Equipment
260,290
202,220
Accumulated depreciation—equipment
(60,940)
(54,530)
Total assets
$870,540
$757,370
Liabilities and Stockholders' Equity
Accounts payable (merchandise creditors)
$157,570
$149,200
Accrued expenses payable (operating expenses)
15,670
19,690
Dividends payable
8,710
6,820
Common stock, $10 par
47,010
37,110
Paid-in capital in excess of par—common stock
176,720
103,000
Retained earnings
464,860
441,550
Total liabilities and stockholders' equity
$870,540
$757,370
Additional data obtained from an examination of the accounts in the ledger for 20Y9 are as follows:
Equipment and land were…
Chapter 16 Solutions
Accounting
Ch. 16 - Prob. 1DQCh. 16 - Prob. 2DQCh. 16 - A corporation issued 2,000,000 of common stock in...Ch. 16 - A retail business, using the accrual method of...Ch. 16 - Prob. 5DQCh. 16 - A long-term investment in bonds with a cost of...Ch. 16 - A corporation issued 2,000,000 of 20-year bonds...Ch. 16 - Fully depreciated equipment costing 50,000 is...Ch. 16 - Prob. 9DQCh. 16 - Name five common major classes of operating cash...
Ch. 16 - Prob. 16.1APECh. 16 - Prob. 16.1BPECh. 16 - Adjustments to net incomeindirect method Ripley...Ch. 16 - Prob. 16.2BPECh. 16 - Changes in current operating assets and...Ch. 16 - Changes in current operating assets and...Ch. 16 - Prob. 16.4APECh. 16 - Prob. 16.4BPECh. 16 - Land transactions on the statement of cash flows...Ch. 16 - Land transactions on the statement of cash flows...Ch. 16 - Prob. 16.6APECh. 16 - Prob. 16.6BPECh. 16 - Cash payments for merchandisedirect method The...Ch. 16 - Cash payments for merchandisedirect method The...Ch. 16 - Prob. 16.8APECh. 16 - Prob. 16.8BPECh. 16 - Prob. 16.1EXCh. 16 - Effect of transactions on cash flows State the...Ch. 16 - Classifying cash flows Identify the type of cash...Ch. 16 - Cash flows from operating activitiesindirect...Ch. 16 - Cash flows from operating activitiesindirect...Ch. 16 - Prob. 16.6EXCh. 16 - Prob. 16.7EXCh. 16 - Determining cash payments to stockholders The...Ch. 16 - Reporting changes in equipment on statement of...Ch. 16 - Prob. 16.10EXCh. 16 - Reporting land transactions on statement of cash...Ch. 16 - Prob. 16.12EXCh. 16 - Reporting land acquisition for cash and mortgage...Ch. 16 - Reporting issuance and retirement of longterm debt...Ch. 16 - Prob. 16.15EXCh. 16 - Prob. 16.16EXCh. 16 - Prob. 16.17EXCh. 16 - Statement of cash flowsindirect method The...Ch. 16 - Prob. 16.19EXCh. 16 - Prob. 16.20EXCh. 16 - Determining selected amounts for cash flows from...Ch. 16 - Prob. 16.22EXCh. 16 - Cash flows from operating activitiesdirect method....Ch. 16 - Prob. 16.24EXCh. 16 - Free cash flow The financial statement for Nike,...Ch. 16 - Free cash flow Lovato Motors Inc. has cash flows...Ch. 16 - Statement of cash flowsindirect method The...Ch. 16 - Prob. 16.2APRCh. 16 - Statement of cash flowsindirect method The...Ch. 16 - Prob. 16.4APRCh. 16 - Prob. 16.5APRCh. 16 - Prob. 16.1BPRCh. 16 - Statement of cash flowsindirect method The...Ch. 16 - Statement of cash flowsindirect method The...Ch. 16 - Statement of cash flowsdirect method The...Ch. 16 - Statement of cash flowsdirect method applied to PR...Ch. 16 - Ethics in Action Lucas Hunter, president of...Ch. 16 - Prob. 16.3CPCh. 16 - Using the statement of cash flows You are...Ch. 16 - Dillip Lachgar is the president and majority...
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