c12StatementofCashFlows.qxd
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8/31/10
12:21 PM
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chapter 12 Statement of Cash Flows
(a) Cash from operations
$38,500
Prepare a statement of cash
flows—indirect method.
Instructions
(a) Prepare a statement of cash flows for Helwany Company using the direct method.
(b) Compute these cash-based measures:
(1) Current cash debt coverage ratio.
(2) Cash debt coverage ratio.
(3) Free cash flow.
P12-9A
Condensed financial data of Lemere Inc. follow.
(SO 4), AP
LEMERE INC.
Comparative Balance Sheets
December 31
Assets
2012
2011
Cash
Accounts receivable
Inventory
Prepaid expenses
Long-term investments
Plant assets
Accumulated depreciation
$ 80,800
87,800
112,500
28,400
138,000
285,000
(50,000)
$ 48,400
38,000
102,850
26,000
109,000
242,500
(52,000)
Total
$682,500
$514,750
Accounts payable
Accrued expenses payable
Bonds payable
Common stock
Retained earnings
$102,000
16,500
110,000
220,000
234,000
$ 67,300
21,000
146,000
175,000
105,450
Total
$682,500
$514,750
Liabilities and Stockholders’ Equity
LEMERE INC.
Income Statement Data
For the Year Ended December 31, 2012
Sales
Less:
Cost of goods sold
Operating expenses, excluding
depreciation
Depreciation expense
Income taxes
Interest expense
Loss on sale of plant assets
$ 388,460
$135,460
12,410
46,500
27,280
4,730
7,500
Net income
233,880
$154,580
Additional information:
1. New plant assets costing $100,000 were purchased for cash during the year.
2. Old plant assets having an original cost of $57,500 and accumulated depreciation of
$48,500 were sold for $1,500 cash.
3. Bonds payable matured and were paid off at face value for cash.
4. A cash dividend of $26,030 was declared and paid during the year.
Cash from operations
$176,930
Prepare a statement of cash
flows—direct method.
(SO 6), AP
Cash from operations
$176,930
Instructions
Prepare a statement of cash flows using the indirect method.
*P12-10A Data for Lemere Inc. are presented in P12-9A. Further analysis reveals that
accounts payable pertain to merchandise creditors.
Instructions
Prepare a statement of cash flows for Lemere Inc. using the direct method.