Reference no: EM132482440

Question a) Calculate cash from operating activities-indirect method.

The comparative balance sheets for Chas Company show these changes in noncash current accounts: Accounts Receivable increased $35,500, Prepaid Expenses decreased $12,800, and Inventory decreased $22,500. Accounts Payable increased $16,000. Calculate net cash provided by operating activities using the indirect method assuming that profit is $300,000 for the year ended June 30, 2017. Depreciation expense for the year was $32,000 and the company incurred a gain on sale of equipment of $25,000.

Question b) Calculate cash from operating activities-indirect method.

Mirzaei Ltd. reported the following information in its balance sheet and income statement for the year ended March 31, 2017:

                                                  2017          2016

Accounts receivable                    $60,000        $40,000

Inventory                                  63,000          70,000

Prepaid expenses                         4,000            2,000

Accounts payable                          35,000         40,000

Income tax payable                        16,000         10,000

Depreciation expense                         50,000

Gain on sale of equipment                45,200

Profit                                           330,000

Question : Calculate the net cash provided (used) by operating activities using the indirect method.

Question c) Prepare the investing activities section of the cash flow statement.

Selected information follows for Cathrea Select Corporation at December 31:

                                                                          2017                   2016

Land                                                $ 95,000           $180,000

Buildings                                           250,000            250,000

Accumulated depreciation-buildings     (55,000)               (45,000)

Equipment                                       237,000             148,000

Accumulated depreciation-equipment  (86,000)           (78,000)

Additional information:

1. Land was sold for cash at a gain of $35,000.
2. Equipment was bought for cash.

Question : Prepare the investing activities section of the cash flow statement.

Question d) Determine dividends paid.

The following was reported in Sanaz Ltd.'s 2017 financial statements:

                                             2017             2016

Dividends payable        $ 24,000             $ 20,000

Retained earnings          261,000            114,000

Profit                        197,000

Question : Calculate cash payments for dividends.

Question e) Prepare the financing activities section of the cash flow statement.

Selected information follows for Cathrea Select Corporation at December 31:

                                        2017             2016

Bonds payable       $995,000           $995,000

Mortgage notes payable 475,000          200,000

Common shares               55,000        45,000

Retained earnings            165,000         85,000

Additional information:

1. Principal payments on the mortgage payable were $25,000.
2. A building was purchased for $500,000 by paying $200,000 cash and signing a mortgage note payable for the balance.
3. Profit for the year was $145,000.

Question : Assuming the company reports under ASPE and all dividends have been paid, prepare the financing activities section of the cash flow statement.

Question f) Calculate cash payments to employees-direct method.

ICE Inc. reported the following in its December 31, 2017, financial statements.

                                            2017            2016

Salaries payable        $ 2,500              $4,000

Salaries expense      188,000

Question : Calculate the cash payments to employees.

Question g) Calculate cash payments for income tax-direct method.

Home Grocery Corporation reported the following in its 2017 financial statements.

                                                 2017         2016

Income tax payable        $17,000                $8,000

Income tax expense        90,000

Question : Calculate the cash payments for income tax.