Corporate Financial Accounting
14th Edition
ISBN: 9781305653535
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Textbook Question
Chapter 13, Problem 13.5APR
Statement of
The comparative balance sheet of Livers Inc. for December 31, 20Y3 and 20Y2 is as follows:
| Dec. 31, 20Y3 | Dec. 31, 20Y2 | |
| Assets |
||
| Cash | $ 155,000 | $ 150,000 |
| 450,000 | 400,000 | |
| Inventories | 770,000 | 750,000 |
| Investments | 0 | 100,000 |
| Land | 500,000 | 0 |
| Equipment | 1,400,000 | 1,200,000 |
| Accumulated |
(600,000) | (500,000) |
| Total assets Liabilities and |
$2,675,000 | $2,100,000 |
| Accounts payable (merchandise creditors) | $ 340,000 | $ 300,000 |
| Accrued expenses payable (operating expenses) | 45,000 | 50,000 |
| Dividends payable | 30,000 | 25,000 |
| Common stock, $4 par | 700,000 | 600,000 |
| Paid-in capital: Excess of issue price over par—common stock | 200,000 | 175,000 |
| 1,360,000 | 950,000 | |
| Total liabilities and stockholders' equity | $2,675,000 | $2,100,000 |
The income statement for the year ended December 31, 20Y3, is as follows:
| Sales | $ 3,000,000 | |
| Cost of goods sold | 1,400,000 | |
| Gross profit | $ 1,600,000 | |
| Operating expenses: | ||
| Depreciation expense | $ 100,000 | |
| Other operating expenses. | 950,000 | |
| Total operating expenses | 1,050,000 | |
| Operating income | $550,000 | |
| Gain on sale of investments | 75,000 | |
| Income before income tax | $625,000 | |
| Income tax expense | 125,00 | |
| Net income | $ 500,000 |
Additional data obtained from an examination of the* accounts in the ledger for 20Y3 are as follows:
- A. The investments were sold for $175,000 cash.
- B. Equipment and land were acquired for cash.
- C. There were no disposals of equipment during the year.
- D. The common stock was issued for cash.
- E. There was a $90,000 debit to Retained Earnings for cash dividends declared.
Instructions
Prepare a .statement of cash flows, using the direct method of presenting cash flows from operating activities.
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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:
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93,020
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The comparative balance sheet of Canace Products Inc. for December 31, 20Y6 and 20Y5, is as follows:
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Dec. 31, 20Y5
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$234,050
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Accounts receivable (net)
84,790
77,660
Inventories
239,340
229,910
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0
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37,310
Excess of paid-in capital over par
179,290
103,540
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471,640
443,860
Total liabilities and stockholders’ equity
$883,210
$761,330
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$1,406,850
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579,300
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Chapter 13 Solutions
Corporate Financial Accounting
Ch. 13 - What is the principal disadvantage of the direct...Ch. 13 - What are the major advantages of the indirect...Ch. 13 - A corporation issued 2,000,000 of common stock in...Ch. 13 - A retail business, using the accrual method of...Ch. 13 - If salaries payable was 100,000 at the beginning...Ch. 13 - Prob. 6DQCh. 13 - A corporation issued 2,000,000 of 20-year bonds...Ch. 13 - Fully depreciated equipment costing 50,000 was...Ch. 13 - Prob. 9DQCh. 13 - Name five common major classes of operating cash...
Ch. 13 - Classifying cash flows Identify whether each of...Ch. 13 - Adjustments to net incomeindirect method Ripley...Ch. 13 - Prob. 13.3BECh. 13 - Prob. 13.4BECh. 13 - Prob. 13.5BECh. 13 - Common stock transactions on the statement of cash...Ch. 13 - Appendix 2 Cash received from customersdirect...Ch. 13 - Reporting changes in equipment on statement of...Ch. 13 - Prob. 13.1EXCh. 13 - Effect of transactions on cash flows State the...Ch. 13 - Classifying cash flows Identify the type of cash...Ch. 13 - Prob. 13.4EXCh. 13 - Cash flows from operating activities indirect...Ch. 13 - Prob. 13.6EXCh. 13 - Cash flows from operating activitiesindirect...Ch. 13 - Prob. 13.8EXCh. 13 - Prob. 13.9EXCh. 13 - Prob. 13.10EXCh. 13 - Determining cash payments to stockholders The...Ch. 13 - Prob. 13.12EXCh. 13 - Reporting land acquisition for cash and mortgage...Ch. 13 - Reporting issuance and retirement of long-term...Ch. 13 - Prob. 13.15EXCh. 13 - Prob. 13.16EXCh. 13 - Statement of cash flowsindirect method The...Ch. 13 - Statement of cash flowsindirect method List the...Ch. 13 - Prob. 13.19EXCh. 13 - Prob. 13.20EXCh. 13 - Prob. 13.21EXCh. 13 - Prob. 13.22EXCh. 13 - Statement of cash flowsindirect method The...Ch. 13 - Prob. 13.2APRCh. 13 - Prob. 13.3APRCh. 13 - Prob. 13.4APRCh. 13 - Statement of cash flows direct method applied to...Ch. 13 - Prob. 13.1BPRCh. 13 - Prob. 13.2BPRCh. 13 - Prob. 13.3BPRCh. 13 - Prob. 13.4BPRCh. 13 - Statement of cash flowsdirect method applied to PR...Ch. 13 - Prob. 13.1ADMCh. 13 - Prob. 13.2ADMCh. 13 - Prob. 13.3ADMCh. 13 - Priceline: Free cash flow Priceline Group, Inc. is...Ch. 13 - Ethics in Action Head Donuts Inc. is a retailer of...Ch. 13 - Prob. 13.3TIF
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