Mugan-Akman 2012
Chapter 13
Solutions to Exercises and Problems
E 13-1
Net Income:
less: Increase in Accounts Receivable
Gain on Sale of Building
plus: increase in Accounts Payable
6.240
-200
-280
240
6.000
E 13-2
Cash flow Non-Cash
Section
O
O
O
I
1.Customers paid for the sales of this period.
2.Payment to suppliers for the purchases in this period.
3.Payment of insurance premium for the next 2 years.
4.Payment for purchases of marketable securities.
5.Depreciation expense for the period.
6.Payment of dividends declared previously.
7.Collection of accounts receivable.
8.Collection of subscription fees.
9.Leased equipment. Lease payments start next period.
10.Borrowed from banks.
11.Acquired equipment by issuing a note payable.
12.Paid salaries and wages of the period.
13.Amortization of discount on bonds.
14.Machinery acquired by issuing stock.
15. Retirement of bonds.
16. Acquired common stock of other companies.
E 13-3
Collections from customers:
Revenues
less Accounts Receivable
N
F
O
O
N
F
N
O
N
N
F
I
1.570
-69
1.501
Purchases:
Cost of goods sold
plus inventories, end
470
25
495
Payments to suppliers:
Purchases
less: Accounts Payable
495
-44
451
1
Mugan-Akman 2012
Chapter 13
Solutions to Exercises and Problems
Cash flow from operations:
Collections from Customers
Payments to Suppliers
Operating Expenses
E 13-4
Changes in:
Total liabilities and Shareholders' Equity:
Current Liabilities
Long-term liabilities
Shareholders' Equity
1.501
-451
-280
770
509
-605
-104
-200
Total Assets:
Current assets
Long-term Assets
Change in Cash
-452
145
-307
increase of
107
E13-5
Cash Flows from Operating Activities
Decrease in Accounts Receivable
Increase in Notes Receivable
Decrease in Inventories
Increase in Prepaid Expenses
Increase in Accounts Payable
Decrease in Salaries Payable
-
2.000
4.000
3.500
300
3.800
2.700
P 13-1
20X7
Assets
Cash
Trading Securities-at NRV
Accounts Receivable - net
Prepaid Expenses
Inventory
Total Current Assets
Long-term Equity Investment (equity method)
Property, Plant and Equipment
Accumulated Depreciation
2
5.010
3.350
3.600
1.200
6.282
19.442
12.244
61.020
-3.000
20X8
17.170
1.310
7.200
2.300
10.312
38.292
13.396
73.060
-3.250
change in
balance
12.160
-2.040
3.600
1.100
4.030
18.850
1.152
12.040
-250
Mugan-Akman 2012
Chapter 13
Solutions to Exercises and Problems
Total Assets
Liabilities and Shareholders’ Equity
Accounts Payable
Salaries Payable
Total Current Liabilities
Bonds Payable
Discount on Bonds Payable
Bank Loans
Share Capital
Retained Earnings
Total Liabilities and Shareholders' Equity
89.706
121.498
31.792
2.005
2.239
4.244
10.000
-460
102
22.000
53.820
89.706
9.440
2.549
11.989
23.000
-430
169
22.000
64.770
121.498
7.435
310
7.745
13.000
30
67
0
10.950
31.792
Direct Method:
Collections from customers:
Sales
less: increase in Accounts Receivable
plus: dividends received
48.561
-3.600
24
44.985
Payments to Suppliers:
Purchases:
Cost of Goods Sold
plus increase in Inventories
29.681
4.030
33.711
-7.435
26.276
less: increase in Accounts Payable
Payments for Operating Expenses
Insurance Expense
plus increase in Prepaid Expenses
Salaries and Wages
less: salaries payable
2.600
1.100
4347
-310
7.737
Karya Yachting
Statement of Cash Flows
For the Year 20X8
in TL
Cash Flow from Operations:
Collections from Customers
Payments to Suppliers
44.985
-26.276
3
Mugan-Akman 2012
Chapter 13
Solutions to Exercises and Problems
Payments for Operating Expenses
Interest Expense (1)
Income tax paid
Cash Flow from Operations:
-7.737
-949
-1.720
8.303
(1) Interest Expense less amortization of bond discount of TL 30
Indirect Method:
Karya Yachting
Statement of Cash Flows
For the Year 20X8
in TL
Cash Flow from Operations:
Net Income
Add:
Depreciation and Amortization
Unrealized Loss on Marketable Securities
Adjust for:
increase in Accounts Receivable
increase in Prepaid Expenses
increase in Inventories
increase in Accounts Payable
increase in Salaries Payable
less: Equity Earnings
Gain on Sale of Land
Gain on Sale of Trading Securities
plus: Dividends Received
Cash Flow from Operations:
12.550
280
230
-3.600
-1.100
-4.030
7.435
310
-1.176
-2.140
-480
24
8.303
Cash Flow from Investing Activities and Financing Activities are the same
for both methods.
Cash flow from Investing Activities
Sale of land(2)
Sale of Trading Securities
Purchase of PPE
Cash flow from Investing
Activities
(2) Book value + gain on sale = TL 4.260 + TL 2.140 = TL 6.400
Cash flow from Financing Activities
Bond issued
6.400
2.290
-16.300
-7.610
13.000
4
Mugan-Akman 2012
Chapter 13
Solutions to Exercises and Problems
Bank Notes
Dividends
Cash flow from Financing
Activities
67
-1.600
11.467
change in cash (3)
12.160
plus Cash beginning balance
5.010
equals Cash ending balance
17.170
(3) Cash flow from operating + Cash flow from investing + Cash flow from financing
Beg.Bal
Purchases
End.Bal
Trading Securities
3350
230 Unrealized Loss
0
1810 Sold
1310
Equity Investment
Beg.Bal
12244
24 Dividends Received
Eq.Earnings
1176
End Bal
13396
PPE
61020
16300
73060
Beg.Bal
Purchases
End Bal
4260 Land sold
Accum.Depr
3000
250
3250
Beg.Bal
Depr.Exp
End Bal
P 13-2
Yarta Company
Statement of Cash Flows
For the year 20XX
in TL
Cash flow from operating activities:
Net Income
plus: Depreciation
10.000
2.500
12.500
5
Mugan-Akman 2012
Chapter 13
Solutions to Exercises and Problems
Adjust for:
increase in Accounts Receivable
decrease in Accounts Payable
decrease in Inventory
Cash flow from operating activities
-2.700
-1.100
1.600
10.300
Cash flow from Investing Activities:
Sale of Securities
Sale of Building
Purchase of equipment
Loan to Suppliers
Cash flow from Investing Activities
110
850
-2.000
-250
-1.290
Cash flow from Financing Activities:
Issuance of Share Capital
Dividends paid
Cash flow from Financing Activities
35.000
-1.800
33.200
Net Change in Cash
42.210
plus Cash balance, beginning
equals Cash balance, end of the period
4.000
46.210
P 13-3
Yürekli A.Ş.
Statement of Cash Flows
For the Year Ended 31 December 20X8
Cash Flow from Operations
Cash Collections;
From Customers
(106.500-850)
From Rent
(4.300-600)
Total Cash Collections
105.650
3.700
109.350
Cash Payments:
To suppliers
(35.300-1.8001.300)
32.200
For salaries
13.900+1.750
15.650
Operating Expenses
5.250+300+1.150
6.700
For interest expense
5.800+250
6.050
6
Mugan-Akman 2012
Chapter 13
Solutions to Exercises and Problems
For income tax
14.550-600
Total Cash Payments
13.950
74.550
Net Cash Flow from Operations
34.800
Cash Flow from Investing Activities
For purchase of land
-14.500
From sale of equipment
2.000
For purchase of equipment
-6.550
Net Cash flow from Investing
-19.050
Cash Flow from Financing Activities
Payment of Note Payable
Issuance of Common Stock
Additional Paid in Capital
Payments for Dividends
Net Cash Flow from Financing
-12.500
5.000
6.800
-14.100
-14.800
Net Change in Cash
950
Plus: Beginning Cash
Equal: Ending Cash
2.650
3.600
7
Mugan-Akman 2012
Chapter 13
Solutions to Exercises and Problems
P 13-4
Yassılar A.Ş.
Statement of Cash Flows
For the Year Ended 31 December 20X8
Cash Flow from Operations
Cash Collections;
From Customers
1.060.900 1,040,900+20,000
Total Cash Collections
1.060.900
Cash Payments:
To suppliers
594.300 656,300-40,000-22,000
For operating expenses
128.800 189,200-60,000-400
For interest expense
37.600
For income tax
26.200 34,200-8,000
Total Cash Payments
786.900
Net Cash Flow from Operations
Cash Flow from Investing Activities
From sale of equipment
Net Cash flow from Investing
Cash Flow from Financing Activities
From Issuance of Notes Payable
Payment of Note Payable
Repayment of Bonds
Payments for Dividends
Net Cash Flow fr Financing
274.000
3.000 7,000-4,000
3.000
30.000
(80.000)
(20.000)
(60.000)
(130.000)
Net Change in Cash
147.000
Plus: Beginning Cash
Equal: Ending Cash
20.000
167.000
8
Mugan-Akman 2012
Chapter 13
Solutions to Exercises and Problems
P13-5 Toton Company
Cash Flows From Operating Activities
Net Income
Add: Depreciation expense
Increase in Accounts Receivable
Decrease in Merchandise Inventory
Decrease in Prepaid Expenses
Increase in Accounts Payable
Cash Flows From Operating Activities
49.750
12.000
2.300
12.100
350
19.900
91.800
Cash Flows from Investing Activities
Purchase of plant assets
Cash Flows from Investing Activities
-
78.000
78.000
-
30.000
60.000
50.000
20.000
Cash Flows from Financing Activities
Payment of Dividends
Increase in Capital
Repayment of Mortgage Note Payable
Cash Flows from Financing Activities
Decrease in Cash
Cash at the beginning of the year
Cash at the end of the year
-
6.200
28.100
21.900
9