#1 A comparative balance sheet for De La Cruz Corporation is presented below:
DE LA CRUZ CORPORATION
Comparative Balance Sheet
2014 2013
Assets
Cash $ 36,000 $ 31,000
Accounts receivable (net) 70,000 60,000
Prepaid insurance 25,000 17,000
Land 18,000 40,000
Equipment 70,000 60,000
Accumulated depreciation (20,000) (13,000)
Total Assets $199,000 $195,000
Liabilities and Stockholders’ Equity
Accounts payable $ 11,000 $ 6,000
Bonds payable 27,000 19,000
Common stock 140,000 115,000
Retained earnings 21,000 55,000
Total liabilities and stockholders’ equity $199,000 $195,000
Additional information:
1. Net loss for 2014 is $20,000.
2. Cash dividends of $14,000 were declared and paid in 2014.
3. Land was sold for cash at a loss of $4,000. This was the only land transaction during the year.
4. Equipment with a cost of $15,000 and accumulated depreciation of $10,000 was sold for $5,000 cash.
5. $22,000 of bonds were retired during the year at carrying (book) value.
6. Equipment was acquired for common stock. The fair value of the stock at the time of the exchange was $25,000.
Instructions
Prepare a statement of cash flows for the year ended 2014, using the indirect method.
#2The French Corporation experienced a fire on December 31, 2015, in which its financial records were partially destroyed. It has been able to salvage some of the records and has ascertained the following balances.
December 31, 2015 December 31, 2014
Cash $ 30,000 $ 10,000
Receivables (net) 85,000 125,000
Inventory 200,000 180,000
Accounts payable 50,000 90,000
Notes payable 30,000 60,000
Common stock, $100 par 400,000 400,000
Retained earnings 130,000 101,000
Additional information:
1. The inventory turnover is 4 times
2. The return on common stockholders’ equity is 20%. The company had no additional paid-in capital.
3. The accounts receivable turnover is 8.6 times.
4. The return on assets is 16%.
5. Total assets at December 31, 2014, were $685,000.
Instructions
Compute the following for The French Corporation.
(a) Cost of goods sold for 2015.
(b) Net sales (credit) for 2015.
(c) Net income for 2015.
(d) Total assets at December 31, 2015.
#3Manufacturing cost data for Pear Corporation, which uses a job order cost system, are presented below:
iPear Mini iPear Video
Direct Materials Used (a) $103,000
Direct Labor $ 70,000 140,000
Manufacturing Overhead Applied 63,000 (d)
Total Manufacturing Costs 240,000 (e)
Work in Process, 1/1/13 (b) 45,000
Total Cost of Work in Process 300,000 (f)
Work in Process, 12/31/13 (c) 40,000
Cost of Goods Manufactured 205,000 (g)
Instructions
Indicate the missing amount for each letter. Assume that overhead is applied on the basis of direct labor cost and that the rate is the same for both products.
#4The following information is available for Vaughn Corporation for the year ended December 31, 2014:
Collection of principal on long-term loan to a supplier $15,000
Acquisition of equipment for cash 10,000
Proceeds from the sale of long-term investment at book value 20,000
Issuance of common stock for cash 27,000
Depreciation expense 28,000
Redemption of bonds payable at carrying (book) value 35,000
Payment of cash dividends 15,000
Net income 25,000
Purchase of land by issuing bonds payable 45,000
In addition, the following information is available from the comparative balance sheet for Sally at the end of 2013 and 2014:
2014 2013
Cash $ 66,000 $14,000
Accounts receivable (net) 20,000 16,000
Prepaid insurance 18,000 13,000
Total current assets $104,000 $43,000
Accounts payable $ 30,000 $20,000
Salaries payable 3,000 7,000
Total current liabilities $ 33,000 $27,000
Instructions
Prepare Vaughn’s statement of cash flows for the year ended December 31, 2014 using the indirect method.
#5Presented below are incomplete 2013 manufacturing cost data for Watts Corporation.
|
Direct Material Used |
Direct Labor |
Manufacturing Overhead |
Total Manufacturing Costs |
Work in Process (1/1) |
Work in Process (12/31) |
Cost of Goods Manufactured |
|
|
(a) |
$38,000 |
$60,000 |
$48,000 |
? |
$120,000 |
$96,000 |
? |
|
(b) |
$149,000 |
$53,000 |
$90,000 |
$292,000 |
? |
$98,000 |
$311,000 |
|
(c) |
$53,000 |
$116,000 |
$121,000 |
$290,000 |
$413,000 |
? |
$515,000 |
Instructions
Determine the missing amounts. (Remember the formula!)
#6The comparative condensed balance sheets of Balderson Corporation are presented below.
BALDERSON CORPORATION
Comparative Condensed Balance Sheets
December 31
2015 2014
Assets
Current assets $ 72,000 $ 80,000
Property, plant, and equipment (net) 95,400 90,000
Intangibles 33,600 40,000
Total assets $201,000 $210,000
Liabilities and stockholders’ equity
Current liabilities $ 40,320 $ 48,000
Long-term liabilities 142,500 150,000
Stockholders’ equity 18,180 12,000
Total liabilities and stockholders’ equity $201,000 $210,000
Instructions
(a) Prepare a horizontal analysis of the balance sheet data for Balderson Corporation using 2014 as a base.
(b) Prepare a vertical analysis of the 2015 balance sheet data for Balderson Corporation in columnar form.
#7Chapman Corporation incurred the following costs while manufacturing its product.
Materials used in product $130,000 Advertising expense $49,000
Depreciation on plant 65,000 Property taxes on plant 16,000
Property taxes on store 7,700 Delivery expense 20,000
Labor costs of assembly-line workers 112,000 Sales commissions 31,000
Factory supplies used 24,000 Salaries paid to sales clerks 58,000
Work-in-process inventory was $23,000 at January 1 and $15,800 at December 31. Finished goods inventory was $67,000 at January 1 and $52,600 at December 31.
Instructions
(a) Compute cost of goods manufactured.
(b) Compute cost of goods sold.
#8Durgapersad Corporation’s comparative balance sheets are presented below.
DURGAPERSAD CORPORATION
Comparative Balance Sheets
December 31
2014 2013
Cash $ 21,570 $ 10,700
Accounts receivable 18,200 23,400
Land 18,000 26,000
Building 70,000 70,000
Accumulated depreciation (15,000) (10,000)
Total $112,770 $120,100
Accounts payable $ 12,370 $31,100
Common stock 75,000 69,000
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 direct effect on cash flows, except the change in accumulated depreciation. The land was sold for $5,900.
Instructions
(a) Prepare a statement of cash flows for 2014 using the indirect method.
(b) Compute free cash flow.
#9Assuming a statement of cash flows is prepared, indicate the reporting of the transactions and events listed below by major categories on the statement. Use the following code letters to indicate the appropriate category under which the item would appear on the statement of cash flows.
Code
Cash Flows From Operating Activities
Add to Net Income A
Deduct from Net Income D
Cash Flows From Investing Activities IA
Cash Flows From Financing Activities FA
Category
1. Common stock is issued for cash at an amount above par value. _____
2. Merchandise inventory increased during the period. _____
3. Depreciation expense recorded for the period. _____
4. Building was purchased for cash. _____
5. Bonds payable were acquired andretired at their carrying value. _____
6. Accounts payable decreased during the period. _____
7. Prepaid expenses decreased during the period. _____
8. Treasury stock was acquired for cash. _____
9. Land is sold for cash at an amount equal to book value. _____
10. Patent amortization expense recorded for a period. _____
#10 Greene Corporation’s comparative balance sheets are presented below.
GREENE CORPORATION
Comparative Balance Sheets
December 31
2014 2013
Cash $ 18,700 $ 22,700
Accounts receivable 24,700 22,300
Investments 25,000 16,000
Equipment 59,000 70,000
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 50,000 45,000
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 and had accumulated depreciation of $2,000 was sold for $4,000.
3. All other changes in noncurrent account balances had a direct effect on cash flows, except the change in accumulated depreciation.
Instructions
(a) Prepare a statement of cash flows for 2014 using the indirect method.
(b) Compute free cash flow.