Managerial accounting 1b ch12 | Accounting homework help

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  

 

 

 

 

 

 

  

 

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.

  

 

 

  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

 

 

 

 

 

 

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