2023 ACC 560 WEEK 9 CHAPTER 13 EXERCISES ACC560 Week 9 CHAPTER 13 EXERCISES ACC 560 | Assignments Online
2023 ACC 560 WEEK 9 CHAPTER 13 EXERCISES ACC560 Week 9 CHAPTER 13 EXERCISES ACC 560 | Assignments Online
Assignments Online 2023 Business Finance
ACC 560 WEEK 9 CHAPTER 13 EXERCISES ACC560 Week 9 CHAPTER 13 EXERCISES ACC/560 Week 9 CHAPTER 13 EXERCISES
Chapter 13 Exercises 4, 6, 7, Problem 1A.
The text book used is Managerial Accounting: Tools for Business Decision Making – 7th Edition Jerry J. Weygandt; Paul D. Kimmel; Donald E. Kieso
E13-4 Gutierrez Company reported net income of $225,000 for 2017. Gutierrez also reported depreciation expense of $45,000 and a loss of $5,000 on the disposal of equipment. The comparative balance sheet shows a decrease in accounts receivable of $15,000 for the year, a $17,000 increase in accounts payable, and a $4,000 decrease in prepaid expenses.
Instructions
Prepare the operating activities section of the statement of cash flows for 2017. Use the indirect method.
Prepare the operating activities section—indirect method.
E13-6 The three accounts shown below appear in the general ledger of Herrick Corp. during 2017.
Equipment |
|||||
Date |
Debit |
Credit |
Balance |
||
Jan. |
1 |
Balance |
160,000 |
||
July |
31 |
Purchase of equipment |
70,000 |
230,000 |
|
Sept. |
2 |
Cost of equipment constructed |
53,000 |
283,000 |
|
Nov. |
10 |
Cost of equipment sold |
49,000 |
234,000 |
|
Accumulated Depreciation—Equipment |
|||||
Date |
Debit |
Credit |
Balance |
||
Jan. |
1 |
Balance |
71,000 |
||
Nov. |
10 |
Accumulated depreciation on equipment sold |
30,000 |
41,000 |
|
Dec. |
31 |
Depreciation for year |
28,000 |
69,000 |
|
Retained Earnings |
|||||
Date |
Debit |
Credit |
Balance |
||
Jan. |
1 |
Balance |
105,000 |
||
Aug. |
23 |
Dividends (cash) |
14,000 |
91,000 |
|
Dec. |
31 |
Net income |
77,000 |
168,000 |
Instructions
From the postings in the accounts, indicate how the information is reported on a statement of cash flows using the indirect method. The loss on disposal of equipment was $7,000. (Hint: Cost of equipment constructed is reported in the investing activities section as a decrease in cash of $53,000.)
Prepare statement of cash flows and compute free cash flow.
E13-7 Rojas Corporation’s comparative balance sheets are presented below.
ROJAS CORPORATION |
||
2017 |
2016 |
|
Cash |
$ 14,300 |
$ 10,700 |
Accounts receivable |
21,200 |
23,400 |
Land |
20,000 |
26,000 |
Buildings |
70,000 |
70,000 |
Accumulated depreciation—buildings |
(15,000) |
(10,000) |
Total |
$110,500 |
$120,100 |
Accounts payable |
$ 12,370 |
$ 31,100 |
Common stock |
75,000 |
69,000 |
Retained earnings |
23,130 |
20,000 |
Total |
$110,500 |
$120,100 |
Additional information:
1. Net income was $22,630. Dividends declared and paid were $19,500.
2. No noncash investing and financing activities occurred during 2017.
3. The land was sold for cash of $4,900.
Instructions
1. Prepare a statement of cash flows for 2017 using the indirect method.
2. Compute free cash flow.
Prepare a statement of cash flows—indirect method.
P13-1A You are provided with the following transactions that took place during a recent fiscal year.
Transaction |
|
|
|
(a) |
Recorded depreciation expense on the plant assets. |
||
(b) |
Recorded and paid interest expense. |
||
(c) |
Recorded cash proceeds from a disposal of plant assets. |
||
(d) |
Acquired land by issuing common stock. |
||
(e) |
Paid a cash dividend to preferred stockholders. |
||
(f) |
Paid a cash dividend to common stockholders. |
||
(g) |
Recorded cash sales. |
||
(h) |
Recorded sales on account. |
||
(i) |
Purchased inventory for cash. |
||
(j) |
Purchased inventory on account. |
Instructions
Complete the table indicating whether each item (1) affects operating (O) activities, investing (I) activities, financing (F) activities, or is a noncash (NC) transaction reported in a separate schedule, and (2) represents a cash inflow or cash outflow or has no cash flow effect. Assume use of the indirect approach.
Determine cash flow effects of changes in equity accounts.
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