Reference no: EM131196204
E13-4 Gutierrez Company reported 11 (.1 income of $225,000 for 2017. GutietTez also reported depreciation expense of $45,000 and a loss of $5,000 on the disposal of equipment. The comparative balance sheet shows a decrease in accounts receivable of $15,000 for the year, a $17,000 increase in accounts payable, and a $4,000 decrease in prepaid expenses.
Instructions
Prepare the operating activities section of the statement of cash flows for 2017. Use the indirect method.
E13-5 The three accounts shown below appear in the general ledger of Herrick Corp. during 2017.
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Equipment
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Date
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Debit
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Credit
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Balance
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Jan. 1
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Balance
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160,000
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July 31
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Purchase of equipment
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70,000
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230,000
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Sept. 2
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Cost of equipment constructed
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53,000
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283,000
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Nov. 10
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Cost of equipment sold
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49,000
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234,000
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Accumulated Depreciation-Equipment
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Date
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Debit
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Credit
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Balance
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Jan. 1
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Balance
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71,000
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Nov. 10
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Accumulated depreciation on equipment sold
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30,000
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41,000
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Dec. 31
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Depreciation for year
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28,000
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69,000
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Retained Earnings
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Dale
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Debit
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Credit
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Balance
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Jan. 1
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Balance
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105,000
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Aug. 23
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Dividends (cash)
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14,000
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91,000
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Dec. 31
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Net income
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77,000
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168,000
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Instructions
From the postings in the accounts, indicate how the information is reported on a state¬ment of cash flows using the indirect method. The loss on disposal of equipment was $7,000. (Hint: Cost of equipment constructed is reported in the investing activities section as a decrease in cash of $53,000.)
E13-7 Rojas Corporation's comparative balance sheets are presented below_
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ROJAS CORPORATION
Comparative Balance Sheets
December 31
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2017
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2016
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Cash
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$ 14,300
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S 10,700
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Accounts receivable
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21,200
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23,400
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Land
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20,000
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26,000
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Buildings
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70,000
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70,000
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Accumulated depreciation-buildings
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(15,000)
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(10,000)
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Total
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$110500
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$120,100
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Accounts payable
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$ 12,370
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$ 31,100
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Common stock
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75,000
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69,000
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Retained earnings
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23,130
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20,000
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Total
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$110,500
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$120,100
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Additional information:
1. Net income was $22,630. Dividends declared and paid were $19,500.
2. No noncash investing and financing activities occurred during 2017.
3. The land was sold for cash of $4,900.
Instructions
(a) Prepare a statement of cash flows for 2017 using the indirect method.
(b) Compute free cash flow.
P13-1A You are provided with the following transactions that took place during a recent fiscal year
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Transaction
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Statement of Cash Flows Activity Affected
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Cash Inflow, Outflow, or No Effect?
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Recorded depreciation expense on the plant assets.
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Recorded and paid interest expense.
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Recorded cash proceeds from a disposal of plant assets.
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Acquired land by issuing common stock.
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Paid a cash dividend to preferred stockholders.
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Paid a cash dividend to common stockholders.
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Recorded cash sales.
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Recorded sales on account.
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Purchased inventory for cash.
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Purchased inventory on account.
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Instructions
Complete the table indicating whether each item (1) affects operating (0) activities, investing (I) activities, financing (F) activities, or is a noncash (NC) transaction reported in a separate schedule, and (2) represents a cash inflow or cash outflow or has no cash flow effect. Assume use of the indirect approach.
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