163. On the basis of the following data for Branch Co. for the year ended December 31, 2011 and the preceding year, prepare a statement of cash flows using the indirect method of reporting cash flows from operating activities. Assume that equipment costing $125,000 was purchased for cash and the land was sold for $15,000. The stock was issued for cash and the only entries in the retained earnings account were net income of $56,000 and cash dividends declared and paid of $18,000.
Year
Year
2011
2010
Cash
$65,000
$ 54,000
Accounts receivable (net)
78,000
85,000
Inventories
106,500
90,000
Land
—
20,000
Equipment
495,000
370,000
Accumulated depreciation
(215,000)
(158,000)
$529,500
$461,000
Accounts payable (merchandise creditors)
$ 53,500
$ 55,000
Common stock, $10 par
200,000
170,000
Paid-in capital in excess of par–
common stock
62,000
60,000
Retained earnings
214,000
176,000
$529,500
$461,000
164. On the basis of the following data for Breach Co. for the year ended December 31, 2011 and the preceding year, prepare a statement of cash flows using the indirect method of reporting cash flows from operating activities. Assume that equipment costing $25,000 was purchased for cash and no long term assets were sold during the period. Stock was issued for cash – 3,200 shares at par.Net income for 2010 was $76,000.Cash dividends declared and paid were $13,000.
Year
Year
2011
2010
Cash
$170,000
$ 74,000
Accounts receivable (net)
78,000
85,000
Inventories
106,500
90,000
Equipment
395,000
370,000
Accumulated depreciation
(195,000)
(158,000)
$554,500
$461,000
Accounts payable (merchandise creditors)
$ 51,000
$ 50,000
Taxes payable
2,500
5,000
Common stock, $10 par
262,000
230,000
Retained earnings
239,000
176,000
$554,500
$461,000
165. Complete each of the columns on the table below, indicating in which section each item would be reported on the statement of cash flow (Operating, Investing, or Financing), the amount that would be reported, and whether the item would create an increase or decrease in cash. For item that affect more than one section of the statement, indicate all affected. Assume the indirect method of reporting cash flows operating activities. The first item has been completed as an example.
Item
Statement Section
Amount to Report
+/- Effect on Cash
Depreciation of $20,000 for the period
Operating
$20,000
Increase
Issuance of common stock for $30,000
Increase in Accounts Payable of $7,000
Retirement of $100,000 Bonds Payable at 97.
Purchase of long term investments for $76,500
Dividends declared and paid of $8,300
Increase in Prepaid Rent of $4,500
Decrease in Inventory of $5,300
Purchase of equipment for $17,600 cash.
Sale of land originally costing $60,000 for $66,000
Decrease in Taxes Payable for $2,100
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