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5 Managerial Accounting Questions due Saturday, August 16th at 12:00PM CDT




Exercise 2: Cash Flows from Operating Activities: Indirect Method;The condensed single-step income statement for the year ended December 31, 2014, of Conti Chemical Company, a distributor of farm fertilizers and herbicides, follows.;Sales $26,000,000;Less: Cost of goods sold $15,200,000;Operating expenses (including depreciation of $1,640,000) 7,600,000;Income taxes expense 800,000 23,600,000;$2,400,000;Selected accounts from Conti Chemical?s balance sheets for 2014 and 2013 follow.;2014 2013;Accounts receivable $4,800,000 $3,400,000;Inventory 1,680,000 2,040,000;Prepaid expenses 520,000 360,000;Accounts payable 120,000 200,000;Income taxes available 280,000 240,000;Prepare a schedule of cash flows from operating activities using the indirect method.;Exercise 8: Preparing the Statement of cash Flows: Indirect Method;Keeper Cooperation?s income statement for the year ended June 30, 2014, and its comparative balance sheets for June 30, 2014 and 2013 follow.;Keeper Corporation;Income Statement;For the Year Ended June 30, 2014;Sales $234,000;Cost of goods sold 156,000;Gross Margin $78,000;Operating expenses 45,000;Operating income $33,000;Interest expense 2,800;Income before income taxes $30,200;Income taxes expense 12,300;Net income $17,900;Keeper Corporation;Comparative Balance Sheets;June 30, 2014 and 2013;2014 2013;Assets;Cash $69,900 $12,500;Accounts receivable (net) 21,000 26,000;Inventory 43,000 48,400;Prepaid Expenses 3,200 2,600;Furniture 55,000 60,000;Accumulated depreciation- furniture (9,000) (5,000);Total Assets: $183,500 $144,500;Liabilities and Stockholders? Equity;Accounts payable $13,000 $14,000;Income taxes payable 1,200 1,800;Notes payable (long-term) 37,000 35,000;Common stock, $10 par value 115,000 90,000;Retained earnings 17,300 3,700;Total liabilities and stockholders? equity $183,500 $144,500;Keeper issued a $22,000 note payable for purchase of furniture, sold at carrying value furniture that cost $27,000 with accumulated depreciation of $15,300, recorded depreciation on the furniture for the year, $19,300, repaid a note in the amount of $28,000, issued $25,000 of common stock at par value, and paid dividends of $4,300. Prepare Keeper?s statement of cash flows for the year 2014 using the indirect method.;Exercise 9;In 2014, Andy?s Corporation had year-end assets of $2,400,000 sales of $3,300,000. Net income of $280,000, net cash flows from operating activities of $390,000, dividends of $120,000, purchases of plant assets of $500,000, and sales of plant assets of $90,000. In 2013, year-end assets were $2,100,000. Calculate free cash flow and the cash-generating efficiency ratios of cash flow yield, cash flows to sales, and cash flows to assets (Round to one decimal or the nearest tenth of a percent.);Problem 1: Classification of Cash Flow Transaction;Analyze each transaction listed in the table that follows and place X?s in the appropriate columns to indicate the transaction?s classification and its effect on cash flows using the indirect method.;Cash Flow Classification;Effect on Cash Flows;Transaction;Operating activity;Investing activity;Financing activity;Noncash transaction;Increase;Decrease;No effect;1. Paid a cash dividend;2. Decreased accounts receivable;3. Increased inventory;3. Incurred a net loss.


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