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Ex. 181 Towson Company prepared the tabulation below at December 31, 2016. Net Income.........................................................$340,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation expense, $43,000......................................_______ Increase in accounts receivable, $50,000..............................._______ Decrease in inventory, $13,000......................................_______ Amortization of patent, $4,000......................................_______ Increase in accounts payable, $5,600................................._______ Decrease in interest receivable, $7,000................................_______ Increase in prepaid expenses, $6,000................................._______ Decrease in income taxes.
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COMPLETION STATEMENTS               171.Debt investments are investments in government and _____________ bonds.               172.Cost of debt investments includes the price paid plus ______________               173.When an investor owns between 20% and 50% of the common stock of a corporation, it is generally presumed that the investor has _______________ influence over the investee and.
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Ex. 160 On January 1, Oetry Corporation purchased a 35% equity in Selig Company for $190,000. At December 31, Selig declared and paid a $50,000 cash dividend and reported net income of $80,000. Instructions Prepare the necessary journal entries for Oetry Corporation. Ex. 161 Information pertaining to long-term stock investments in 2017 by Bell Corporation.
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Ex. 168 The following information is available for Lewis Corporation's available-for-sale securities at December 31, 2017. Security  Cost  Fair Value X$34,000$30,000 Y  24,000  32,000 $58,000$62,000 Instructions Prepare the adjusting entry to record the securities at fair value at December 31, 2017. Ex. 169 At January 1, 2017, the available-for-sale securities portfolio held by Hyde Corporation consisted of the following.
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147.Financing activities involve a.lending money to other entities and collecting on those loans. b.cash receipts from sales of goods and services. c.acquiring and disposing of productive long-lived assets. d.long-term liability and stockholders' equity items. 148.The information to prepare the statement of cash flows usually comes from each of the following except a.the comparative balance sheet. b.the prior.
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107.The following data are available for Sampson Corporation. a.$140,000. b.$260,000. c.$160,000. d.$240,000. 108.The following data are available for Alamo Corporation. a.$285,000. b.$260,000. c.$305,000. d.$425,000. 109.The following data are available for Two-off Company. a.$180,000. b.$370,000. c.$360,000. d.$420,000. 110.If $250,000 of bonds are issued during the year but $130,000 of old bonds are retired during the year, the statement of cash flows will show a(n) a.net increase in.
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BRIEF EXERCISES BE 161 Selected transactions for the Ecker Company are listed below.               1.Collected accounts receivable.               2.Declared and paid dividends on common stock.               3.Sold long-term investments for cash.               4.Issued stock for equipment.               5.Repaid five year note payable.               6.Paid employee wages.               7.Converted bonds payable to common stock.               8.Acquired long-term investment with cash.               9.Sold.
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MULTIPLE CHOICE QUESTIONS 37.The statement of cash flows should help investors and creditors assess each of the following except the a.entity's ability to generate future income. b.entity's ability to pay dividends. c.reasons for the difference between net income and net cash provided by operating activities. d.cash investing and financing transactions during the period. 38.The statement of.
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Ex. 178 A comparative balance sheet for Rocker Company appears below: ROCKER COMPANY Comparative Balance Sheet Dec. 31, 2017Dec. 31, 2016 Assets Cash$  34,000$11,000 Accounts receivable18,00013,000 Inventory25,00017,000 Prepaid expenses6,0009,000 Long-term investments-0-17,000 Equipment60,00033,000 Accumulated depreciation—equipment  (20,000)(15,000) Total assets$123,000$85,000 Liabilities and Stockholders' Equity Accounts payable$  17,000$  7,000 Bonds payable36,00045,000 Common stock40,00023,000 Retained earnings    30,000  10,000 Total liabilities and stockholders' equity$123,000$85,000 Additional information: 1.Net income for the year ending December 31, 2017 was $35,000. 2.Cash.
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aEx. 194 The financial statements of Lowz Company appear below: LOWZ COMPANY Comparative Balance Sheet December 31     2017     2016  Assets Cash$  36,000$  23,000 Accounts receivable25,00034,000 Merchandise inventory32,00015,000 Property, plant, and equipment50,00078,000 Accumulated depreciation   (21,000)   (24,000) Total$122,000$126,000 Liabilities and Stockholders' Equity Accounts payable$  18,000$  23,000 Income taxes payable9,0008,000 Bonds payable8,00033,000 Common stock28,00024,000 Retained earnings    59,000    38,000 Total$122,000$126,000 LOWZ COMPANY Income Statement For the Year Ended December 31, 2017 Sales$400,000 Cost of goods sold  270,000 Gross.
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aEx. 188 Dredd Company has begun a worksheet for preparing a statement of cash flows. The following additional information is provided: 1.Cash dividends of $8,000 were paid during the year. 2.Land which originally cost $60,000 was sold for $52,000. 3.Common stock was issued at par value for cash. Instructions Complete the worksheet for Dredd Company. DREDD COMPANY Worksheet Statement.
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117.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. 118.Which of the following transactions would not be classified as a financing activity? a.Purchase of treasury stock b.Payment of.
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aEx. 189 Dense Company's income statement showed revenues of $275,000 and operating expenses of $135,000. Accounts receivable decreased by $40,000 and accounts payable increased by $35,000 during the year. Instructions Compute (a) cash receipts from customers and (b) cash payments for operating expenses using the direct method. aEx. 190 Clare Company had total operating.
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+Ex. 195 Condensed financial data of Drake Company appear below: DRAKE COMPANY Comparative Balance Sheet December 31    2017    2016  Assets Cash$  41,000$  35,000 Accounts receivable75,00053,000 Inventories120,000132,000 Prepaid expenses19,00025,000 Investments100,00075,000 Plant assets325,000250,000 Accumulated depreciation  (65,000)  (60,000) Total$615,000$510,000 Liabilities and Stockholders' Equity Accounts payable$  93,000$  75,000 Accrued expenses payable29,00024,000 Bonds payable120,000160,000 Common stock275,000170,000 Retained earnings  98,000    81,000 Total$615,000$510,000 DRAKE COMPANY Income Statement For the Year Ended December 31, 2017 Sales$450,000 Less: Cost of goods sold$300,000 Operating expenses (excluding depreciation)60,000 Depreciation.
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67.Vision Company purchased treasury stock with a cost of $16,000 during 2016. During the year, the company paid dividends of $20,000 and issued bonds payable for proceeds of $860,000. Cash flows from financing activities for 2016 total a.$840,000 net cash inflow. b.$856,000 net cash inflow. c.$860,000 net cash outflow. d.$824,000 net cash inflow. 68.Kanet Company.
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Ex. 182 The current sections of Donny Inc.'s balance sheets at December 31, 2016 and 2017, are presented here. Donny's net income for 2017 was $203,000. Depreciation expense was $25,000.    2016    2017  Current assets     Cash$115,000$99,000     Accounts receivable105,00089,000     Inventory 154,000 172,000     Prepaid expense    27,000   21,000            Total current assets$401,000$381,000 Current liabilities     Accrued expenses.
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Ex. 180 The following information is available for Sally Corporation for the year ended December 31, 2017: Collection of principal on long-term loan to a supplier$15,000 Acquisition of equipment for cash10,000 Proceeds from the sale of long-term investment at book value20,000 Issuance of common stock for cash27,000 Depreciation expense28,000 Redemption of bonds payable at carrying (book) value35,000 Payment.
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aEx. 192 The income statement of Reagan Inc. for the year ended December 31, 2017, reported the following condensed information: Service revenue$700,000 Operating expenses  340,000 Income from operations360,000 Income tax expense    50,000 Net income$310,000 Roman's balance sheet contained the following comparative data at December 31:    2017   2016 Accounts receivable$75,000$45,000 Accounts payable40,00050,000 Income taxes payable6,0004,000 Reagan has no depreciable assets. Accounts payable.
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87.Starting with net income and adjusting it for items that affected reported net income but which did not affect cash is called the a.direct method. b.indirect method. c.working capital method. d.cost-benefit method. 88.In calculating net cash provided by operating activities using the indirect method, an increase in prepaid expenses during a period is a.deducted from net.
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Ex. 186 Miroz Corporation's comparative balance sheets are presented below. MIROZ CORPORATION Comparative Balance Sheets December 31     2017     2016  Cash$ 18,700$ 22,700 Accounts receivable 24,70022,300 Investments25,00016,000 Equipment59,00070,000 Accumulated depreciation  (14,500) (10,000)      Total$112,900$121,000 Accounts payable $  13,600$11,100 Bonds payable      6,000  30,000 Common stock  50,00045,000 Retained earnings    43,300    34,900     Total $112,900$121,000 Additional information: 1.Net income was $17,700. Dividends declared and paid were $9,300. 2.Equipment which cost $11,000.
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Ex. 184 The three accounts shown below appear in the general ledger of Lawson Corp. during 2016.                                   Equipment                                  DateDebitCreditBalance Jan.1Balance160,000 July 31Purchase of equipment75,000235,000 Sept.2Cost of equipment constructed56,000291,000 Nov.10Cost of equipment sold45,000246,000                          Accumulated Depreciation—Equipment                      DateDebitCreditBalance Jan.1Balance71,000 Nov. 10Accumulated depreciation on         equipment sold30,00041,000 Dec.31Depreciation for year20,00061,000 Ex. 184(Cont.)                               Retained Earnings                                 DateDebitCreditBalance Jan.1Balance105,000 Aug.23Dividends (cash)15,00090,000 Dec.31Net income50,000140,000 Instructions From the postings in the accounts, indicate how the information is reported on a.
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a127.Lager Company has other operating expenses of $260,000. There has been an increase in prepaid expenses of $20,000 during the year, and accrued liabilities are $15,000 lower than in the prior period. Using the direct method of reporting cash flows from operating activities, what were Lager's cash payments for operating.
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Ex. 166 At December 31, 2017, the trading securities for Wolfe Company are as follows: Security   Cost  Fair Value X$25,000$27,000 Y  45,000  38,000 $70,000$65,000 Instructions Prepare the adjusting entry at December 31, 2017, to report the securities at fair value. Ex. 167 Plotner Corporation has the following trading portfolio of stock investments as of December 31, 2017. Security    Cost Fair Value A$19,000$15,000 B22,00027,000 C .
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S-A E  190(Communication) Sue Garner is the daughter of Fred Garner, the founder and president of Big Sky Enterprises. She has been working in various departments during school vacations throughout high school. She burst into the accounting department excitedly one morning. She said that the stock prices of several of the.
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Ex. 158 On January 5, 2017, Grouse Company purchased the following stock securities as a long-term investment: 300 shares Bonter Corporation common stock for $4,500. 500 shares Wane Corporation common stock for $10,000. 800 shares Strauss Corporation common stock for $22,800. Assume that Grouse Company cannot exercise significant influence over the activities of the investee.
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MATCHING 183.Match the items below by entering the appropriate code letter in the space provided. A.Available-for-sale securities              F.              Consolidated financial statements B.Subsidiary company              G.              Controlling interest C.Equity method              H.              Fair Value Adjustment D.Unrealized Gain or Loss—Equity              I.              Parent company E.Fair value              J.              Long-term investments ____              1.Valuation allowance account. ____              2.Amount for which a security could be sold. ____              3.Ownership.
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aBE 169 Small Company reported cost of goods sold of $179,000 on its 2016 income statement. The company’s beginning inventory was $35,000. The ending inventory was valued at $40,000. The Accounts Payable balance at January 1 was $25,000. The December 31 balance in Accounts Payable was $22,000. Instructions Compute cash payments to.
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aEx. 196 The income statement for Jones Company showed cost of goods sold of $80,000 and operating expenses of $65,000. The comparative balance sheets for the year show that inventory decreased $5,000, prepaid expenses increased $7,000, accounts payable increased $3,000, and accrued expenses payable decreased $5,000. Instructions Compute (a) cash payments to suppliers.
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Ex. 164 Presented below are two independent situations. 1.Guo Cosmetics acquired 10% of the 200,000 shares of common stock of Chy Fashion at a total cost of $12 per share on March 18, 2017. On June 30, Chy declared and paid a $50,000 dividend. On December 31, Chy reported net income of.
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Ex. 179 A comparative balance sheet for Halpern Corporation is presented below: HALPERN CORPORATION Comparative Balance Sheet     2017     2016   Assets Cash$  36,000$  31,000 Accounts receivable (net)70,00060,000 Prepaid insurance25,00017,000 Land18,00040,000 Equipment70,00060,000 Accumulated depreciation   (20,000)   (13,000) Total Assets$199,000$195,000 Liabilities and Stockholders' Equity Accounts payable$  11,000$   6,000 Bonds payable27,00019,000 Common stock140,000115,000 Retained earnings    21,000    55,000 Total liabilities and stockholders' equity$199,000$195,000 Additional information: 1.Net loss for 2017 is $20,000. 2.Cash dividends of $14,000 were.
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57.Of the items below, the one that appears first on the statement of cash flows is a.noncash investing and financing activities. b.net increase (decrease) in cash. c.cash at the end of the period. d.cash at the beginning of the period. 58.Which of the following transactions does not affect cash during a period? a.Write-off of an uncollectible.
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97.Which of the following adjustments to convert net income to net cash provided by operating activities is incorrect? a.Accounts Receivabledecreaseincrease b.Prepaid Expensesincreasedecrease c.Inventorydecreaseincrease d.Accounts Payableincreasedecrease 98.Which of the following adjustments to convert net income to net cash provided by operating activities is not added to net income? a.Gain on Sale of Equipment b.Depreciation Expense c.Patent Amortization Expense d.Depletion Expense 99.Using.
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aEx. 193 The income statement of Frank Company is shown below: FRANK COMPANY Income Statement For the Year Ended December 31, 2017 Sales$8,400,000 Cost of goods sold  5,400,000 Gross profit3,000,000 Operating expenses Selling expenses$500,000 Administrative expense700,000 Depreciation expense90,000 Amortization expense    30,000  1,320,000 Net income$1,680,000 Additional information: 1.Accounts receivable increased $400,000 during the year. 2.Inventory increased $250,000 during the year. 3.Prepaid expenses increased $200,000 during the year. 4.Accounts payable.
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a137.Christine Company had an increase in inventory of $55,000. The cost of goods sold was $95,000. There was a $6,000 decrease in accounts payable from the prior period. What were Christine’s cash payments to suppliers? a.$156,000 b.$61,000 c.$144,000 d.$101,000 a138.Which of the following items does not appear in the statement of cash flows under the.
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77.If a loss of $25,000 is incurred in selling (for cash) office equipment having a book value of $90,000, the total amount reported in the cash flows from investing activities section of the statement of cash flows is a.$65,000. b.$90,000. c.$115,000. d.$25,000. 78.Wilson Company reported net income of $105,000 for the year ended December 31,.
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EXERCISES Ex. 171 Classify each of the following as a(n): A.Operating Activity B.Investing Activity C.Financing Activity _____1Issuance of bonds. _____2.Sale of equipment. _____3.Amortization expense. _____4.Purchase of treasury stock. _____5.Receipt of dividends on investment. _____6.Purchase of land. Ex. 172 Selected transactions of Alton Company are listed below.               1.Common stock is sold for cash above par value.               2.Bonds payable are issued for cash at a.
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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 both. 3.A primary objective of the statement of.
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Ex. 159 Rosco Company purchased 35,000 shares of common stock of Paxton Corporation as a long-term investment for $900,000. During the year, Paxton Corporation reported net income of $300,000 and paid dividends of $100,000. Instructions (a)Assuming that the 35,000 shares represent a 10% interest in Paxton Corporation: 1.Prepare the journal entry to record the.
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Ex. 185 Planner Corporation's comparative balance sheets are presented below. PLANNER CORPORATION Comparative Balance Sheets December 31    2017    2016  Cash$ 21,570$ 10,700 Accounts receivable 18,20023,400 Land18,00026,000 Building70,00070,000 Accumulated depreciation  (15,000) (10,000)      Total$112,770$120,100 Accounts payable$  12,370$31,100 Common stock 75,00069,000 Retained earnings    25,400   20,000     Total$112,770$120,100 Additional information: 1.Net income was $27,900. Dividends declared and paid were $22,500. 2.All other changes in noncurrent account balances had a.
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47.The cash effects of transactions that create revenues and expenses are a.financing activities. b.investing activities. c.operating activities. d.processing activities. 48.The acquisition of land by issuing common stock is a.a noncash transaction which is not reported in the body of a statement of cash flows. b.a cash transaction and would be reported in the body of a statement.
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Ex. 176 Plexis Company reported net income of $148,000. For 2016, depreciation was $45,000, and the company reported a gain on sale of investments of $12,000. Accounts receivable increased $25,000 and accounts payable decreased $23,000. Instructions Compute net cash provided by operating activities using the indirect method. Ex. 177 Assuming a statement of cash flows.
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Ex. 157 Stewart Corporation's balance sheet at December 31, 2016, showed the following: Short-term investments, at fair value$46,500 Stewart Corporation's trading portfolio of stock investments consisted of the following at December 31, 2016:     Stock       Number of Shares    Cost  Conn Common Stock200$28,000 Ares Preferred Stock4006,000 Hall Common Stock300    9,000 $43,000 During 2017, the following transactions took place: Feb.5Sold 100 shares of.
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SHORT-ANSWER ESSAY QUESTIONS S-A E  184 S-A E  185 A consolidated balance sheet reports the financial position of two or more legal entities just as if they were one reporting unit. Explain why all the individual items appearing on the separate balance sheets of each of the affiliated companies cannot be added together.
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Ex. 174 The following information is available for Redcands Company: Receipts from customers$215,000 Dividends from stock investments3,000 Proceeds from sale of equipment18,000 Proceeds from issuance of stock90,000 Payments for inventory100,000 Payments for operating expenses78,000 Interest paid6,000 Taxes paid4,000 Dividends paid20,000 Instructions Based on the preceding information, compute the net cash provided by operating activities. Ex. 175 Plough Company reported net income of $180,000 for.
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COMPLETION STATEMENTS               197.A statement of cash flows summarizes the operating, ____________, and  ___________ activities of an entity.               198.The cash effects of selling goods and services appears in the ______________ activities section of a statement of cash flows.               199.The operating activities section of the statement of cash flows may be prepared.
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