Reference no: EM132463209

Example: A company buys a new building for $200,000 paying cash. Answer: CFI, -$200,000 (or -$200k)

Problem 1. A local government donates land with fair value of $50,000 to a firm as an inducement to locate manufacturing facilities in the area.

Problem 2. A firm sells for $20,000 machinery originally costing $40,000 and with accumulated depreciation of $35,000.

Problem 3. A firm declares cash dividends of $15,000, of which it pays $12,000 immediately to its shareholders.

Problem 4. A firm writes down inventories by $18,000 to reflect the loss in the historical cost of its inventories.

Problem 5. A firm records $60,000 depreciation expense on manufacturing facilities for the period. Keep in mind that the firm has sold all goods it manufactured this period

Problem 6. A firm records interest expense of $15,000 for the period on bonds issued several years ago at a discount, comprising $14,500 cash payment and a $500 addition to Bonds (Liability).

Problem 7. A firm reclassifies $30,000 long-term loans payable as current liability.

Problem 8. A firm sells inventory costing $50,000 for $66,000 cash, thus, realizing a profit of $16,000.

Problem 9. A firm recognizes income tax expense of $80,000 for the period. Tax Payable liability increased by $20,000 for the period. The firm had no prepaid tax asset.

Problem 10. A firm recognizes insurance expense of $20,000 for the period. Prepaid Insurance asset decreased by $3,000 for the period. The firm had no insurance payable liability.