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CASH FLOW PROBLEMS

 Problem #1

Identify which section of the statement of cash ows each of the following eventswould appear in (operating, investing and nancing or in a separate schedule):

a) Purchased a Patentb)c) Sold reasury stoc!d) "et Incomee) Sold long#term

investmentsf) Purchased a buildingg)

h) Issued bonds$i) Paid dividends

 %) &ecorded depreciatione'pense for the year

!) Issued common stoc! toretire a mortgagel)

m) Purchased treasury stoc!n) Problem #2o)p) iven the following information and using the indirect method

prepare the ash *lows from +perating ctivities section ofthe statement of cash ows$

-)r)

s)

t)

u)

.nd of /ear

v)

w) ash

')

0123,444

y)

5) ccounts

&eceivabl

e

aa)

332,144

ab)

ac)6erchandi

se

Inventory

ad)

781,444

ae)

af) Prepaid

.'penses

ag)

9,444

ah)

ai) ccounts

Payable

(creditors)

a%)

3;4,444

a!)

al)

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bc)ccounts

receivable

bd)

be) Inventory

bf)

bg) Prepaid

e'penses

bh)

bi) Bong#term

investments

b%)

b!)Property, plant

and e-uipment

bl)

bm) ccumulated

depreciation

bn)

bo) ccounts

payable

bp)

b-) ccrued

e'penses

br)

bs)Income ta'es

payable

bt)

bu) @onds

payable

bv)

bw) ommon

stoc!

b')

by)&etained

earnings

b5)

ca) he company did not dispose of any property, plant, ande-uipment, sell any long#term investments, issue any bonds payable, or repurchaseany of its own common stoc! during the year$ he company declared and paid a cashdividend$ he beginning and ending cash balances were 094,444 and 0,444,respectively$

cb)cc)&e-uired: Prepare a statement of cash ows using the

indirect method$cd)

ce)

cf) Problem #5:cg)

ch)rcade orporationAs balance sheet and income statementappear below:

ci) Income %)

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cu)Selling and administrative

e'pensescv) cw)

c')Income before income ta'escy) c5)

da) Income ta' e'pensedb) dc)

dd) "et income

de) df)

dg) @alance Sheetdh)

di)

d%)d!)

.nding

dl)

dm)

dn)

@alance

do)

dp) ash

d-)

029

dr)

ds)ccounts receivable

dt)

du)

dv)Inventories

dw)

32

d')

dy)Plant and e-uipment

d5)

3>;

ea)

eb) less: accumulated

depreciation

ec)

(1;>)

ed)

ee)otal ssets

ef)

0217

eg)

eh) ccounts payable

ei)

091

e%)

e!)@onds payable

el)

981

em)

en) ommon stoc!

eo)

7;

ep)

e-) &etained earnings

er)

38

es)

et) otal liabilities and e-uity

eu)

0217

ev)

ew) he company did not dispose of any property, plant, ande-uipment, retire any bonds payable, or repurchase any of its own common stoc!during the year$ he company declared and paid a cash dividend$

e')ey)&e-uired: Prepare a statement of cash ows using the

indirect method$

e5)MUL!PLE CHO!CE "UES!OS

;$ If a loss of 0;3,444 is incurred in selling (for cash) o?ce e-uipment having aboo! value of 034,444 the total amount reported in the cash ows frominvesting activities section of the statement of cash ows is:fa)a) 099,444b)c) 0>,444d)

e) 013,444f)g) 0;3,444

9$ Band costing 0>,444 was sold for 0;44,444 cash$ he gain on the sale was

reported on the income statement as other income$ +n the statement of cashows, what amount should be reported as an investing activity from the saleof the landC1

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e) Increase assets and e-uity f) Increase and decreaseliabilities

g)9;$4,444 in dividends was declared during the year$ 4,444c)d) 032,444e)f) 0>,344g)h) 0>;,344

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i)