Managerial accounting 1b ch12 | Accounting homework help

Managerial Accounting 1B

Financial and Managerial Accounting

Chapter 12

Exercise 12-5B Computation of cash flows (direct) L.O. P5

 Case A: Compute cash received from customers: Sales \$ 510,000 Accounts receivable, December 31, 2011 25,200 Accounts receivable, December 31, 2012 34,800 Case B: Compute cash paid for rent: Rent expense \$ 140,800 Rent payable, December 31, 2011 8,800 Rent payable, December 31, 2012 7,200 Case C: Compute cash paid for merchandise: Cost of goods sold \$ 528,000 Merchandise inventory, December 31, 2011 159,600 Accounts payable, December 31, 2011 67,800 Merchandise inventory, December 31, 2012 131,400 Accounts payable, December 31, 2012 84,000

 For each of the above three separate cases, use the information provided about the calendar-year 2012 operations of Sahim Company to compute the required cash flow information. (Omit the “\$” sign in your response.)

 Case A: Cash received from customers Case B: Cash paid for rent Case C: Cash paid for merchandise

Exercise 12-6 Cash flows from operating activities (indirect) L.O. P2

 BEKHAM COMPANYIncome StatementFor Year Ended December 31, 2011 Sales \$ 1,818,000 Cost of goods sold 891,000 Gross profit 927,000 Operating expenses Salaries expense \$ 248,535 Depreciation expense 43,200 Rent expense 48,600 Amortization expenses–Patents 5,400 Utilities expense 19,125 364,860 562,140 Gain on sale of equipment 7,200 Net income \$ 569,340

 Changes in current asset and current liability accounts for the year that relate to operations follow.

 Accounts receivable \$ 40,500 increase Accounts payable \$ 13,500 decrease Merchandise inventory 27,000 increase Salaries payable 4,500 decrease

 Use the above income statement and information about changes in noncash current assets and current liabilities to prepare only the cash flows from operating activities section of the statement of cash flows using the indirect method. (Amounts to be deducted should be indicated with a minus sign. Omit the “\$” sign in your response)

Exercise 12-7B Cash flows from operating activities (direct) L.O. P5

 BEKHAM COMPANYIncome StatementFor Year Ended December 31, 2011 Sales \$ 1,818,000 Cost of goods sold 891,000 Gross profit 927,000 Operating expenses Salaries expense \$ 248,535 Depreciation expense 43,200 Rent expense 48,600 Amortization expenses—Patents 5,400 Utilities expense 19,125 364,860 562,140 Gain on sale of equipment 7,200 Net income \$ 569,340

 Changes in current asset and current liability accounts for the year that relate to operations follow.

 Accounts receivable \$ 40,500 increase Accounts payable \$ 13,500 decrease Merchandise inventory 27,000 increase Salaries payable 4,500 decrease

 Use the above income statement and information about changes in noncash current assets and current liabilities to prepare only the cash provided or used by operating activities section of the statement of cash flows for this company using the direct method. (Amounts to be deducted should be indicated with a minus sign. Omit the “\$” sign in your response.)

Exercise 12-10 Preparation of statement of cash flows (indirect) L.O. P1

[The following information applies to the questions displayed below.]

 Use the following financial statements and additional information.

 GECKO INC.Comparative Balance SheetsJune 30, 2011 and 2010 2011 2010 Assets Cash \$ 85,800 \$ 45,000 Accounts receivable, net 70,000 52,000 Inventory 66,800 96,800 Prepaid expenses 5,400 5,200 Equipment 130,000 120,000 Accum. depreciation—Equipment (28,000 ) (10,000 ) Total assets \$ 330,000 \$ 309,000 Liabilities and Equity Accounts payable \$ 26,000 \$ 32,000 Wages payable 7,000 16,000 Income taxes payable 2,400 3,600 Notes payable (long term) 40,000 70,000 Common stock, \$5 par value 230,000 180,000 Retained earnings 24,600 7,400 Total liabilities and equity \$ 330,000 \$ 309,000

 GECKO INC.Income StatementFor Year Ended June 30, 2011 Sales \$ 668,000 Cost of goods sold 412,000 Gross profit 256,000 Operating expenses Depreciation expense \$ 58,600 Other expenses 67,000 Total operating expenses 125,600 130,400 Other gains (losses) Gain on sale of equipment 2,000 Income before taxes 132,400 Income taxes expense 45,640 Net income \$ 86,760

 a. A \$30,000 note payable is retired at its \$30,000 carrying (book) value in exchange for cash. b. The only changes affecting retained earnings are net income and cash dividends paid. c. New equipment is acquired for \$58,600 cash. d. Received cash for the sale of equipment that had cost \$48,600, yielding a \$2,000 gain. e. Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement. f. All purchases and sales of merchandise inventory are on credit.

Exercise 12-10 Part 1

 (1) Prepare a statement of cash flows for the year ended June 30, 2011, using the indirect method.(Amounts to be deducted should be indicated with a minus sign. Omit the “\$” sign in your response.)

Exercise 12-10 Part 2

 (2) Compute the company’s cash flow on total assets ratio for its fiscal year 2011. (Round your answer to 1 decimal place. Omit the “%” sign in your response.)

 Cash flow on total assets ratio

Exercise 12-13B Preparation of statement of cash flows (direct) from Cash T-account L.O. P1

[The following information applies to the questions displayed below.]

 The following summarized Cash T-account reflects the total debits and total credits to the Cash account of Texas Corporation for calendar year 2011.

 Balance, Dec. 31, 2010 135,200 Receipts from customers 6,000,000 Payments for merchandise 1,590,000 Receipts from dividends 208,400 Payments for wages 550,000 Receipts from land sale 220,000 Payments for rent 320,000 Receipts from machinery sale 710,000 Payments for interest 218,000 Receipts from issuing stock 1,540,000 Payments for taxes 450,000 Receipts from borrowing 2,600,000 Payments for machinery 2,236,000 Payments for long-term investments 2,260,000 Payments for note payable 386,000 Payments for dividends 500,000 Payments for treasury stock 218,000 Balance, Dec. 31, 2011 \$ ?

6. Exercise 12-13B Part 1

 (1) Use this information to prepare a complete statement of cash flows for year 2011. The cash provided or used by operating activities should be reported using the direct method. (Amounts to be deducted should be indicated with a minus sign. Omit the “\$” sign in your response.)

7. Exercise 12-13B Part 2

 (2) Refer to the statement of cash flows in part 1 to answer the following questions a through d:

 a. (i) Which section shows the largest cash inflow?

 (ii) Which section shows the largest cash outflow?

 b. What is the largest individual item among the investing cash outflows?

 c. The cash proceeds are larger from

 d. From borrowing activities the company has

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