Reference no: EM131783017

Accounting Assignment

Question #1 For the following activities, indicate the adjustment to be made, if any, to net income in the operating section of the cash flow statement prepared on the indirect method:

(A) Increase net income                               (B) Decrease net income
(C) No adjustment (investing activity).          (D) No adjustment (financing activity)

1.  Accounts receivable decreased by $5,000 from last year to this year.

2.  Depreciation was $30,000.

3.  Prepaid Expenses decreased $10,000.

4.  Accounts Payable increased $20,000.

5.  Merchandise inventory decreased by $15,000.

6.  Office furniture increased $8,000.

7.  Sold a building at a gain of $5,000.

8.  Issued a cash dividend.

9.  Amortization of intangible assets was $10,000.

10.  Purchased 100 shares of Google common stock for $15,000.

Question #2 The stockholders' equity section of the XYZ Corporation's balance sheet shows these balances in the capital stock accounts:

Preferred Stock 5% $100 par cumulative$100,000.

Common Stock $1 Par  $ 1,000,000.

The board of directors made the following dividend declarations and payments:

2013         $ 0
2014         $120,000
2015          $200,000

Required:  Prepare a schedule showing the distribution of the dividends between preferred and common stockholders for all three years.  Also indicate the dividend per share as well.                 

Question #3:  The following information is available for the Aunt Rhea Corporation:

                                                   Aunt Rhea Corporation
                                                       Income Statement
For the Year Ended December 31, 2015
Service Revenue                                                        $ 900,000
Operating Expenses                                                   700,000
Operating Income                                                      $ 200,000
Gain on Investment Sale                                            10,000
Net income Before Income Taxes                                $ 210,000
Loss on Sale of Investments                                      25,000
                                                                              $ 185,000
Income Tax Expense                                                  90,000
Net Income                                                              $   95,000

The following partial balance sheet information is also available for 2015 and 2014:

                                                           2015             2014
Cash                                                  $ 655,000      $ 435,000
Accounts Receivable                             120,000         100,000
Merchandise Inventory                          40,000          50,000
Supplies                                              10,000          20,000
L.T. Investments                                  35,000          80,000
Accounts Payable                                  70,000          60,000
Income Taxes Payable                           10,000          15,000

In addition the following transactions took place during 2015:

1.  Common stock was issued for $100,000 cash.

2.  Long-term investments were sold for $55,000.

3.  Cash dividends of $80,000 were paid.

4.  The operating expenses included depreciation of $30,000.

Required:  Prepare in good form,a cash flow statement for 2015 using the indirect method for Aunt Rhea Corporation.