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DeVry ACC 312 Week 7 Homework Exercises 2014

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Question;Week Seven - Homework Exercises P21-5 and P21-6P21-5 Comparative balance sheets for 2013 and 2012 and a statement of income for 2013 are given below for Metagrobolize Industries. Additional information from the accounting records of Metagrobolize also is provided. METAGROBOLIZE INDUSTRIES Comparative Balance Sheets December 31, 2013 and 2012 ($ in 000s) 2013 2012Assets Cash $600 $375Accounts receivable 600 450Inventory 900 525Land 675 600Building 900 900 Less: Accumulated depreciation (300) (270)Equipment 2,850 2,250 Less: Accumulated depreciation (525) (480)Patent 1,200 1,500 $6,900 $5,850Liabilities Accounts payable $750 $450Accrued expenses payable 300 225Lease liability--land 150 0Shareholders' Equity Common stock 3,150 3000Paid-in capital---excess of par 750 675Retained earnings 1,800 1,500 Revenues Sales revenue $2,645 Gain on sale of land 90 $2,735Expenses Cost of goods sold $600 Depreciation expense--building 30 Depreciation expense--equipment 315 Loss on sale of equipment 15 Amortization of patent 300 Operating expenses 500 1,760Net income $975 Additional information from the accounting records: a. During 2013, equipment with a cost of $300,000 (90% depreciated) was sold. b. The statement of shareholders? equity reveals reductions of $225,000 and $450,000 for stock dividends and cash dividends, respectively. Required: Prepare the statement of cash flows of Metagrobolize for the year ended December 31, 2013. Present cash flows from operating activities by the direct method. (You may omit the schedule to reconcile net income to cash flows from operating activities.) P21-6 The income statement and a schedule reconciling cash flows from operating activities to net income are provided below ($ in millions) for Mike Roe Computers. PEACH COMPUTERS Reconciliation of Net Income Income Statement To Net Cash Flows from Operating Activites For the Year Ended December 31, 2013 Sales $150 Net income $13Cost of goods sold (90) Adjustments for noncash effects: Gross margin 60 Decrease in accounts receivable 5Salaries expense $20 Gain on sales of equipment (12)Insurance expense 12 Increase in inventory (6)Depreciation expense 5 Increase in accounts payable 9Interest expense 6 (43) Increase in salaries payable 3Gain and losses: Depreciation expense 5 Gain on sale of equipment 12 Decrease in bond discount 3 Loss on sale of land (3) Decrease in prepaid insurance 2Income before tax 26 Loss on sale of land 3 Income tax expense (13) Increase in income tax payable 6Net income $13 Net cash flows from operating activities $31 Required: 1. Calculate each of the following amounts for Mike Roe Computers: a. Cash received from customers during the reporting period. b. Cash paid to suppliers of goods during the reporting period. c. Cash paid to employees during the reporting period. d. Cash paid for interest during the reporting period. e. Cash paid for insurance during the reporting period. f. Cash paid for income taxes during the reporting period. 2. Prepare the cash flows from operating activities section of the statement of cash flows (direct method).

 

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