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*Exercise 16-2 Cash flow classification (indirect)...




*Exercise 16-2 Cash flow classification (indirect) L.O. C1 The following transactions and events occurred during the year. Assuming that this company uses the indirect method to report cash provided by operating activities, indicate where each item would appear on its statement of cash flows by placing an x in the appropriate column. (Leave no cells blank - If the item does not appear in the category, please select "NA".) (Operating Activities) (Statement of Cash flows Investing Activities) (Financing Activities) (Noncash Investing and Financing Activities, Not Reported on Statement or in Notes) a. Accounts receivable decreased in the year b. Purchased land by issuing common stock c. Paid cash to purchase inventory d. Sold equipment for cash, yielding a loss e. Accounts payable decreased in the year f. Income taxes payable increased in the year g. Declared and paid a cash dividend h. Recorded depreciation expense i. Paid cash to settle long-term note payable j. Prepaid expenses increased in the year *Exercise 16-10 Preparation of statement of cash flows (indirect) L.O. P1 [The following information applies to the questions displayed below.] Use the following financial statements and additional information. GECKO INC. Comparative Balance Sheets June 30, 2011 and 2010 2011 2010 Assets Cash $ 107,000 $ 66,700 Accounts receivable, net 69,300 51,500 Inventory 66,000 96,500 Prepaid expenses 5,900 4,200 Equipment 123,000 112,000 Accum. depreciation?Equipment (28,200 ) (10,700 ) Total assets $ 343,000 $ 320,200 Liabilities and Equity Accounts payable $ 26,700 $ 32,700 Wages payable 7,100 16,600 Income taxes payable 2,600 3,600 Notes payable (long term) 51,000 79,000 Common stock, $5 par value 231,000 180,000 Retained earnings 24,600 8,300 Total liabilities and equity $ 343,000 $ 320,200 GECKO INC. Income Statement For Year Ended June 30, 2011 Sales $ 671,000 Cost of goods sold 406,000 Gross profit 265,000 Operating expenses Depreciation expense $ 58,200 Other expenses 66,800 Total operating expenses 125,000 140,000 Other gains (losses) Gain on sale of equipment 2,800 Income before taxes 142,800 Income taxes expense 57,120 Net income $ 85,680 Additional Information a. A $28,000 note payable is retired at its $28,000 carrying (book) value in exchange for cash. b. The only changes affecting retained earnings are net income and cash dividends paid. c. New equipment is acquired for $59,900 cash. d. Received cash for the sale of equipment that had cost $48,900, yielding a $2,800 gain. e. Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement. f. All purchases and sales of merchandise inventory are on credit. GECKO, INC. Statement of Cash Flows For Year Ended June 30, 2011 Cash flows from operating activities $ Adjustments to reconcile net income to net cash provided by operating activities Net cash by operating activities $ Cash flows from investing activities Net cash in investing activities Cash flows from financing activities Net cash in financing activities $ Cash balance at beginning of year Cash balance at end of year $


Paper#7441 | Written in 18-Jul-2015

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