#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.