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12-1 Statement of Cash Flows Ex. 206 Information for two companies in the same industry, Tucker Corporation and Wiggins Corporation, is presented here. Tucker Wiggins Corporation Corporation Cash provided by operating activities $140,000 $140,000 Average current liabilities 50,000 100,000 Average total liabilities 200,000 250,000 Net earnings 200,000 200,000 Capital expenditures 60,000 90,000 Dividends paid 5,000 10,000 Instructions Using the cash-based measures presented in this chapter, compare the (a) liquidity and (b) solvency of the two companies. . .
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12-1 Statement of Cash Flows 161.During 2014, Ecuyer Industries reported cash provided by operations of $397,000,000, cash used in investing of $343,000,000, and cash used in financing of $95,000,000. In addition, cash spent for fixed assets during the period was $138,000,000. Average current liabilities were $325,000,000 and average total liabilities were $858,000,000..
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12-1 Statement of Cash Flows Exercises Ex. 196 Annapolis Company reported net income of $365,000 for the current year. Depreciation recorded on buildings and equipment amounted to $73,000 for the year. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of YearBeginning of.
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11-1 Reporting and Analyzing Stockholders’ Equity S-A E 267(Ethics) Mark Remington, the president and CEO of Earth Systems, Inc., a waste management firm, was recently hospitalized, suffering from exhaustion and a heart ailment. Immediately prior to his hospitalization, Earth Systems had experienced a sharp decline in its stock price, and trading activity became.
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12-1 Statement of Cash Flows 71.Significant noncash transactions would not include a.conversion of bonds into common stock. b.asset acquisition through bond issuance. c.treasury stock acquisition. d.exchange of plant assets. 72.Preferred stock issued in exchange for land would be reported in the statement of cash flows in a.the cash flows from financing activities section. b.the cash flows from investing activities.
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11-1 Reporting and Analyzing Stockholders’ Equity Ex. 237 Giraldi Corporation’s stockholders’ equity section at December 31, 2013, appears below: Stockholders’ equity Paid-in capital Common stock, $10 par, 60,000 outstanding$600,000 Paid-in capital in excess of par  162,500 Total paid-in capital$762,500 Retained earnings  150,000 Total stockholders’ equity$912,500 On June 30, 2014, the board of directors of Giraldi Corporation declared a 15% stock dividend,.
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12-1 Statement of Cash Flows 131.The net income reported on the income statement for the current year was $210,000. Depreciation was $52,000. Accounts receivable and inventories decreased by $5,000 and $15,000, respectively. Prepaid expenses and accounts payable increased, respectively, by $500 and $14,000. How much cash was provided by operating activities? a.$277,500. b.$287,500. c.$295,500. d.$228,500. 132.The indirect.
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11-1 Reporting and Analyzing Stockholders’ Equity Ex. 239 The following accounts appear in the ledger of Bradley, Inc., after the books are closed at December 31, 2014. Common Stock, $1 par value, 800,000 shares authorized, 550,000 shares issued$550,000 Common Stock Dividends Distributable80,000 Paid-in Capital in Excess of Par Value—Common Stock950,000 Preferred Stock, $100 par value, 8%,.
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11-1 Reporting and Analyzing Stockholders’ Equity Ex. 242 Mann Corporation decided to issue common stock and used the $120,000 proceeds to retire all of its outstanding bonds on January 1, 2014. The following information is available for the company for 2013 and 2014.      2014       2013  Net income $   120,000 $  100,000 Average stockholders' equity 1,000,000 800,000 Total assets 1,200,000 1,200,000 Current liabilities 100,000 100,000 Total liabilities 360,000 480,000 Instructions (a)Compute.
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12-1 Statement of Cash Flows Ex. 200 Draper Company prepared the tabulation below at December 31, 2014. Net Income .....................              $323,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation expense, $27,000 ......................_____ Increase in accounts receivable, $75,000 ................_____ Decrease in inventory, $18,000 ......................_____ Amortization of patent, $4,000 ......................_____ Increase in accounts payable, $7,500 .................._____ Decrease in.
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11-1 Reporting and Analyzing Stockholders’ Equity S-A E 263 A large stock dividend and stock split can frequently have the same effect on the market price of a corporation’s stock. Explain how stock dividends and stock splits affect the market price of a corporation’s stock. S-A E 264 Why must a corporation have sufficient retained.
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11-1 Reporting and Analyzing Stockholders’ Equity Ex. 229 The stockholders’ equity section of Piper Corporation’s balance sheet at December 31, 2013, appears below: Stockholders’ equity Paid-in capital Common stock, $10 par value, 400,000 shares authorized;    300,000 issued and outstanding$3,000,000 Paid-in capital in excess of par  1,200,000 Total paid-in capital4,200,000 Retained earnings     900,000 Total stockholders’ equity$5,100,000 Ex. 229(Cont.) During 2014, the following.
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12-1 Statement of Cash Flows *Ex. 210 Wave Rider Company completed its first year of operations on December 31, 2014. Its initial income statement showed that Wave Rider had revenues of $207,000 and operating expenses of $108,000. Accounts receivable and accounts payable at year-end were $80,000 and $28,000, respectively. Assume that accounts payable.
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12-1 Statement of Cash Flows Ex. 202 The following information is available for Chenard Corporation for the year ended December 31, 2014. Beginning cash balance $  35,000 Accounts payable decrease 3,200 Depreciation expense 76,000 Accounts receivable increase 8,200 Inventory increase 13,000 Net income 269,100 Cash received for sale of land at book value 35,000 Sales revenue 747,000 Cash dividends paid 12,000 Income tax payable increase 4,700 Cash used to purchase building 144,000 Cash used to purchase.
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11-1 Reporting and Analyzing Stockholders’ Equity MATCHING 258.Match the items below by entering the appropriate code letter in the space provided. A.ControllerF.Preemptive right B.DeficitG.Par value C.Payout ratioH.Legal capital D.Stock dividendI.Treasury stock E.Declaration dateJ.Cumulative feature ____              1.The date the board of directors formally declares a dividend. ____              2.The amount that must be retained in the business for the protection of creditors. ____             .
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12-1 Statement of Cash Flows *Be. 192 a.Sales = $650,500; Accounts receivable increased by $27,500. Calculate cash receipts from sales. b.Cost of goods sold = $430,000; inventory decreased by $75,000; accounts payable decreased by $28,500. Calculate cash payments for purchases. c.The Income statement shows $12,500 in income taxes. The balance sheet shows an increase in.
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12-1 Statement of Cash Flows BRIEF Exercises Be. 184 Selected transactions of the Carolina Company are listed below.               1.Common stock is sold for cash above par value.               2.Bonds payable are issued for cash at a discount.               3.Interest on a short-term note receivable is collected.               4.Merchandise is sold to customers for cash.               5.Cash is paid.
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12-1 Statement of Cash Flows Be. 186 (a)Identify several alternatives for presenting significant noncash activities in financial statements. (b)Give three examples of significant noncash activities. Be. 187 Lake Norman Company reported net income of $225,000 for the current year. Depreciation recorded on buildings and equipment amounted to $75,000 for the year. Balances of the current asset.
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12-1 Statement of Cash Flows 81.Zoum Corporation had the following transactions during 2014: 1.Issued $125,000 of par value common stock for cash. 2.Recorded and paid wages expense of $60,000. 3.Acquired land by issuing common stock of par value $50,000. 4.Declared and paid a cash dividend of $10,000. 5.Sold a long-term investment (cost $3,000) for cash.
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12-1 Statement of Cash Flows 21.During the maturity phase, cash from operations and net income are approximately the same. 22.A loss on sale of equipment is added to net income in determining cash provided by operations under the indirect method. 23.Under the indirect method, gains and losses from the sale of equipment used in.
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12-1 Statement of Cash Flows Ex. 205 A comparative balance sheet for the Beneteau Corporation is presented below: BENETEAU CORPORATION Comparative Balance Sheet     2014    2013 Assets Cash$  37,000$  31,000 Accounts receivable (net)80,00060,000 Prepaid insurance22,00017,000 Land18,00040,000 Equipment70,00060,000 Accumulated depreciation   (20,000)   (13,000) Total Assets$207,000$195,000 Liabilities and Stockholders' Equity Accounts payable$  12,000$   6,000 Bonds payable27,00019,000 Common stock140,000115,000 Retained earnings    28,000    55,000 Total liabilities and stockholders' equity$207,000$195,000 Additional information: 1.Net loss for 2014 is $12,000..
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12-1 Statement of Cash Flows Be. 190 Lacey Company prepared the tabulation below at December 31, 2014. Net Income .................              $310,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation expense, $45,000 ......................_____ Increase in accounts receivable, $55,000 ................_____ Decrease in inventory, $12,000 ......................_____ Increase in accounts payable, $6,000 .................._____ Increase in prepaid expenses, $4,000 .................._____ Decrease.
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11-1 Reporting and Analyzing Stockholders’ Equity Ex. 235 On January 1 Weiss Corporation had 60,000 shares of no-par common stock issued and outstanding. The stock has a stated value of $5 per share. During the year, the following transactions occurred: Apr.1Issued 10,000 additional shares of common stock for $10 per share. June15Declared a cash dividend.
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12-1 Statement of Cash Flows 171.The cost of goods sold during the year was $330,000. Inventory increased by $12,000 during the year and accounts payable decreased by $19,000 during the year. Using the direct method of reporting cash flows from operating activities, cash payments for inventory total a.$349,000. b.$311,000. c.$337,000. d.$361,000. *172.Anjili Company had credit sales of.
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11-1 Reporting and Analyzing Stockholders’ Equity Ex. 231 Ritchey Corporation has the following capital stock outstanding at December 31, 2014: 9% Preferred stock, $100 par value, cumulative 12,000 shares issued and outstanding ........................$1,200,000 Common stock, no par, $10 stated value, 500,000 shares authorized, 300,000 shares issued and outstanding .......................3,000,000 The preferred stock was issued at $125 per.
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12-1 Statement of Cash Flows *Be. 194 The general ledger of the Summer Company provides the following information: End of YearBeginning of Year Accounts Receivable$  64,000$  84,000 Inventory240,000205,000 Accounts Payable42,00062,000 The company's net sales for the year was $2,000,000 and cost of goods sold amounted to $1,700,000. Instructions Compute the following: (a)Cash receipts from customers (b)Cash payments to suppliers *Be. 195 The income statement.
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12-1 Statement of Cash Flows 11.Noncash investing and financing activities must be reported in the body of a statement of cash flows. 12.Noncash investing and financing transactions, such as the exchange of common stock to purchase assets, represent significant investing and financing activities and are reflected either in a schedule separate from the.
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12-1 Statement of Cash Flows *Ex. 207 Condensed financial data of Gorni Company appear below: GORNI COMPANY Comparative Balance Sheet December 31    2014   2013 Assets Cash                            $  70,000              $  35,000 Accounts receivable              82,000              53,000 Inventories              120,000              132,000 Prepaid expenses              19,000              25,000 Investments              80,000              65,000 Plant assets              310,000              250,000 Accumulated depreciation                 (65,000)                 (60,000) Total              $616,000              $500,000 Liabilities and Stockholders' Equity Accounts payable              $  85,000              $ .
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12-1 Statement of Cash Flows 101.If accounts receivable have increased during the period a.revenues on an accrual basis are less than revenues on a cash basis. b.revenues on an accrual basis are greater than revenues on a cash basis. c.revenues on an accrual basis are the same as revenues on a cash basis. d.expenses on an.
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11-1 Reporting and Analyzing Stockholders’ Equity COMPLETION STATEMENTS               245.A corporation has a separate __________________________ distinct from its owners.               246.The major advantages of the corporate form of organization include (1) limited _________________ of stockholders, (2) continuous ____________________ and (3) ease of transferring ___________________.               247.The _______________ is the chief executive officer with direct responsibility.
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11-1 Reporting and Analyzing Stockholders’ Equity Ex. 233 On January 1, 2014, the Black Corporation had $2,000,000 of $10 par value common stock outstanding that was issued at par and Retained Earnings of $1,000,000. The company issued 140,000 shares of common stock at $15 per share on July 1. On December 15, the.
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12-1 Statement of Cash Flows Be. 188 Assume the indirect method is used to compute cash flows from operations. For each item listed below, indicate the effect on net income in arriving at cash flows from operations by choosing one of the following code letters. Code Add to Net IncomeA Deduct from Net IncomeD               1.Increase in.
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12-1 Statement of Cash Flows 141.The statement of cash flows will not provide insight into a.why dividends were not increased. b.whether cash flow is greater than net income. c.the exact proceeds of a future bond issue. d.how the retirement of debt was accomplished. 142.If a gain of $45,000 is incurred in selling (for cash) office equipment having.
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12-1 Statement of Cash Flows *Ex. 208 The income statement of Gise Company is shown below: GISE COMPANY Income Statement For the Year Ended December 31, 2014 Sales$8,500,000 Cost of goods sold  5,300,000 Gross profit3,200,000 Operating expenses Selling and administrative expenses$1,210,000 Depreciation expense70,000 Amortization expense    30,000  1,310,000 Net income$1,890,000 Additional information: 1.Accounts receivable increased $600,000 during the year. 2.Inventory increased $250,000 during the year. 3.Prepaid expenses increased $150,000.
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12-1 Statement of Cash Flows *Ex. 209 The financial statements of Appalachian Mountain Company appear below: APPALACHIAN MOUNTAIN COMPANY Comparative Balance Sheet December 31     2014    2013 Assets Cash$  47,000$  25,000 Accounts receivable21,00034,000 Inventory22,00015,000 Property, plant, and equipment50,00078,000 Accumulated depreciation   (20,000)   (24,000) Total$120,000$128,000 Liabilities and Stockholders' Equity Accounts payable$  12,000$  31,000 Income taxes payable13,00010,000 Bonds payable10,00025,000 Common stock41,00024,000 Retained earnings    44,000    38,000 Total$120,000$128,000 APPALACHIAN MOUNTAIN COMPANY Income Statement For the Year Ended December 31,.
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11-1 Reporting and Analyzing Stockholders’ Equity Ex. 240 The following are selected accounts and balances from the records of Doran Corporation on June 30, 2014. Common Stock, $10 par value, 75,000 shares authorized, 54,000 shares issued$540,000 Paid-in Capital in Excess of Par Value—Common Stock 150,000 Preferred Stock, $100 par value, 8%, 3,000 shares authorized and issued.
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12-1 Statement of Cash Flows Ex. 204 The comparative balance sheets for Russell Company appear below: RUSSELL COMPANY Comparative Balance Sheet Dec. 31, 2014Dec. 31, 2013 Assets Cash$  38,000$13,000 Accounts receivable18,00014,000 Inventory25,00015,000 Prepaid insurance7,0009,000 Stock investments-0-18,000 Equipment60,00030,000 Accumulated depreciation—equipment  (18,000)(14,000) Total assets$130,000$85,000 Liabilities and Stockholders' Equity Accounts payable$  25,000$  7,000 Bonds payable37,00045,000 Common stock40,00023,000 Retained earnings    28,000  10,000 Total liabilities and stockholders' equity$130,000$85,000 Additional information: 1.Net income for the year ending December 31,.
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11-1 Reporting and Analyzing Stockholders’ Equity IFRS QUESTIONS               1.Jahnke Corporation issued 8,000 shares of €2 par value ordinary shares for €11 per share. The journal entry to record the sale will include a.a debit to Cash for €16,000. b.a credit to Share Premium–Ordinary for €72,000. c.a credit to Share Capital–Ordinary for €88,000. d.a debit to Retained.
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12-1 Statement of Cash Flows CHAPTER 12 STATEMENT OF CASH FLOWS TRUE-FALSE STATEMENTS 1.The statement of cash flows is a required statement that must be prepared along with an income statement, balance sheet, and retained earnings statement. 2.For external reporting, a company must prepare either an income statement or a statement of cash flows, but not.
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12-1 Statement of Cash Flows Ex. 199 The following information is available for Mergenthaler Corporation for the year ended December 31, 2014: Collection of principal on long-term loan to a supplier$16,000 Acquisition of equipment for cash10,000 Proceeds from the sale of long-term investment at book value22,000 Issuance of common stock for cash20,000 Depreciation expense25,000 Redemption of bonds payable at.
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12-1 Statement of Cash Flows 51.Financing activities involve a.lending money. b.acquiring investments. c.issuing debt. d.acquiring long-lived assets. 52.Investing activities include a.collecting cash on loans made. b.obtaining cash from creditors. c.obtaining capital from owners. d.repaying money previously borrowed. 53.Generally, the most important category on the statement of cash flows is cash flows from a.operating activities. b.investing activities. c.financing activities. d.significant noncash activities. 54.The category that is generally considered.
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12-1 Statement of Cash Flows 151.All of the following adjustments would be deducted in determining net cash provided by operating activities except a(n) a.increase in inventories. b.depreciation expense. c.gain on disposal of plant assets. d.decrease in accrued expenses payable. 152.Each of the following is an adjustment to convert net income to net cash provided by operating activities.
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12-1 Statement of Cash Flows 121.Using the indirect method, which of the following adjustments to convert net income to net cash provided by operating activities is correct? Add to Net IncomeDeduct from Net Income a.Accounts Receivableincreasedecrease b.Prepaid Expensesincreasedecrease c.Inventorydecreaseincrease d.Taxes Payabledecreaseincrease 122.Using the indirect method, which of the following adjustments to convert net income to net cash provided.
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12-1 Statement of Cash Flows Ex. 198 Use the following information to perform the calculations below (using the indirect method). Clearly label the amount of each answer as positive or negative and show all your calculations. Net income$401,000Beginning accounts payable$119,000 Depreciation expense 97,000Ending accounts payable146,000 Beginning accounts receivable              420,000Purchase of long-term assets              612,000 Ending accounts receivable439,000Issuance of.
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12-1 Statement of Cash Flows 111.Catalina Company reported a net loss of $10,000 for the year ended December 31, 2014. During the year, accounts receivable decreased $5,000, inventory increased $8,000, accounts payable increased by $10,000, and depreciation expense of $6,000 was recorded. During 2014, operating activities a.used net cash of $3,000. b.used net cash.
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12-1 Statement of Cash Flows 31.The cash debt coverage ratio indicates a company’s ability to repay its liabilities from cash generated from operations. 32.The cash basis measure of liquidity is the cash debt coverage ratio. 33.The current cash debt coverage ratio is considered a better representative of liquidity than the current ratio because it.
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12-1 Statement of Cash Flows 61.Assume that the Quinn Corporation uses the indirect method to depict cash flows. Indicate where, if at all, stock issued for equipment would be classified on the statement of cash flows. a.Operating activities section. b.Investing activities section. c.Financing activities section. d.Does not represent a cash flow. 62.Assume that the Quinn Corporation uses.
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11-1 Reporting and Analyzing Stockholders’ Equity SHORT-ANSWER ESSAY QUESTIONS S-A E 259 Define par value, and discuss its significance in accounting. S-A E 260 Companies frequently issue both preferred stock and common stock. What are the major differences in the rights of stockholders between these two classes of stock? S-A E 261 For what reasons might a company.
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12-1 Statement of Cash Flows MULTIPLE CHOICE QUESTIONS 42.The statement of cash flows a.must be prepared on a daily basis. b.summarizes the operating, financing, and investing activities of an entity. c.is another name for the income statement. d.is a special section of the income statement. 43.Which one of the following items is not generally used in preparing a.
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12-1 Statement of Cash Flows 91.Collections on accounts receivable will lag behind sales, and accrual sales during a period will exceed cash collections during the a.introductory phase. b.growth phase. c.maturity phase. d.decline phase. 92.A company would be expected to generate small amounts of cash from operations during the a.introductory phase. b.growth phase. c.maturity phase. d.decline phase. 93.The phase in the product life.
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