Brief Exercise 23-1
Your answer is correct.
Novak Corporation is preparing its 2017 statement of cash flows, using the indirect method.
Presented below is a list of items that may affect the statement. Using the code below, indicate
how each item will affect Novak’s 2017 statement of cash flows.
Code Letter
Effect
A
Added to net income in the operating section
D
Deducted from net income in the operating section
R-I
Cash receipt in investing section
P-I
Cash payment in investing section
R-F
Cash receipt in financing section
P-F
Cash payment in financing section
N
Noncash investing and financing activity
(a)
Purchase of land and building.
(b)
Decrease in accounts receivable.
(c)
Issuance of stock.
(d)
Depreciation expense.
(e)
Sale of land at book value.
(f)
Sale of land at a gain.
(g)
Payment of dividends.
(h)
Increase in accounts receivable.
(i)
Purchase of available-for-sale debt investment.
(j)
Increase in accounts payable.
(k)
Decrease in accounts payable.
(l)
Loan from bank by signing note.
(m) Purchase of equipment using a note.
(n)
Increase in inventory.
(o)
Issuance of bonds.
(p)
Redemption of bonds payable.
(q)
Sale of equipment at a loss.
(r)
Purchase of treasury stock.
Brief Exercise 23-2
Your answer is correct.
Sarasota Corporation had the following activities in 2017.
1. Sale of land $172,000
4. Purchase of equipment $394,000
2. Purchase of inventory $870,000
5. Issuance of common stock $321,000
3.
Purchase of treasury stock
$73,000
6.
Purchase of available-for-sale debt securities
$57,000
Compute the amount Sarasota should report as net cash provided (used) by investing activities in
its 2017 statement of cash flows. (Show amounts that decrease cash flow with either a sign e.g. -15,000 or in parenthesis e.g. (15,000).)
Net cash
$
by investing activities
Brief Exercise 23-3
Your answer is correct.
Pronghorn Corporation had the following activities in 2017.
1. Payment of accounts payable $811,000
4. Collection of note receivable $99,000
2. Issuance of common stock $259,000
5. Issuance of bonds payable $509,000
3. Payment of dividends $363,000
6. Purchase of treasury stock $50,000
Compute the amount Pronghorn should report as net cash provided (used) by financing activities
in its 2017 statement of cash flows. (Show amounts that decrease cash flow with either a sign e.g. -15,000 or in parenthesis e.g. (15,000).)
Net cash
$
by financing activities
Brief Exercise 23-5
Your answer is correct.
Blue Corporation had the following 2017 income statement.
Sales revenue
Cost of goods sold
Gross profit
$200,000
119,000
81,000
Operating expenses (includes depreciation of $23,000)
Net income
47,000
$34,000
The following accounts increased during 2017: Accounts Receivable $12,000, Inventory $10,000,
Accounts Payable $12,000. Prepare the cash flows from operating activities section of Blue’s 2017
statement of cash flows using the indirect method. (Show amounts that decrease cash flow
with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
Blue Corporation
Statement of Cash Flows-Indirect Method (Partial)
$
Adjustments to reconcile net income to
$
$
Brief Exercise 23-8
Your answer is correct.
In 2017, Flint Corporation had net cash provided by operating activities of $566,000, net cash
used by investing activities of $1,025,000, and net cash provided by financing activities of
$594,000. At January 1, 2017, the cash balance was $320,000.
Compute December 31, 2017, cash.
Cash, December 31, 2017
$
Multiple Choice Question 99
Your answer is correct.
Concord Corporation provided the following information on selected transactions during 2018:
Dividends paid to preferred stockholders
$ 491000
Loans made to affiliated corporations
1450000
Proceeds from issuing bonds
1590000
Proceeds from issuing preferred stock
2100000
Proceeds from sale of equipment
807000
Purchases of inventories
2400000
Purchase of land by issuing bonds
593000
Purchases of treasury stock
1190000
The net cash provided (used) by financing activities during 2018 is
$2591000.
$2009000.
$1094000.
$(3341000).
Exercise 23-6
Your answer is correct.
Waterway Company’s income statement for the year ended December 31, 2017, contained the
following condensed information.
Service revenue
Operating expenses (excluding depreciation)
$846,000
$630,000
Depreciation expense
61,000
Loss on sale of equipment
27,000
Income before income taxes
Income tax expense
Net income
718,000
128,000
40,000
$88,000
Waterway’s balance sheet contained the following comparative data at December 31.
2017
Accounts receivable
Accounts payable
Income taxes payable
2016
$35,000
$57,000
42,000
30,000
3,900
8,700
(Accounts payable pertains to operating expenses.)
Prepare the operating activities section of the statement of cash flows using the indirect
method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in
parenthesis e.g. (15,000).)
WATERWAY COMPANY
Statement of Cash Flows (Partial)
$
Adjustments to reconcile net income to
$
$
Brief Exercise 23-7
Your answer is correct.
Ayayai Corporation had January 1 and December 31 balances as follows.
1/1/17
Inventory
$73,000
12/31/17
$93,000
Accounts payable
57,000
65,000
For 2017, cost of goods sold was $550,000.
Compute Ayayai’s 2017 cash payments to suppliers.
Cash payments to suppliers
$
Brief Exercise 23-6
Your answer is correct.
At January 1, 2017, Sarasota Inc. had accounts receivable of $71,000. At December 31, 2017,
accounts receivable is $56,000. Sales revenue for 2017 total $412,000.
Compute Sarasota’s 2017 cash receipts from customers.
Cash receipts from customers
$
Brief Exercise 23-4
Your answer is correct.
Pronghorn Corporation had the following 2017 income statement.
$214,000
Sales revenue
Cost of goods sold
110,000
Gross profit
104,000
Operating expenses (includes depreciation of $21,000)
Net income
53,000
$51,000
The following accounts increased during 2017: Accounts Receivable $13,000, Inventory $11,000,
Accounts Payable $13,000. Prepare the cash flows from operating activities section of
Pronghorn’s 2017 statement of cash flows using the direct method.
Pronghorn Corporation
Statement of Cash Flows-Direct Method (Partial)
$
$
$