Reference no: EM131011275
Question:
Reporting Investing Activities
An analysis of the income statement and the balance sheet accounts of Headrick, Inc., at December 31,
2011, provide the following information:
Income statement Items:
Gain on Sale of Marketable Securities $ 42,000
Loss on Sales of Plant Assets 33,000
Analysis of balance sheet accounts:
Marketable Securities account:
Debit entries $ 75,000
Credit entries 90,000
Notes Receivable account:
Debit entries 210,000
Credit entries 162,000
Plant and Equipment accounts:
Debit entries to plant asset accounts 196,000
Credit entries to plant asset accounts 120,000
Debit entries to accumulated depreciation accounts 75,000
Additional Information
1. Except as noted in 4 below, payments and proceeds relating to investing transactions were made incash.
2. The marketable securities are not cash equivalents.
3. All notes receivable relate to cash loans made to borrowers, not to receivables from customers.
4. Purchases of new equipment during the year ($196,000) were financed by paying $60,000 in cash and issuing a long-term note payable for $136,000.
5. Debits to the accumulated depreciation accounts are made whenever depreciable plant assets areretired. Thus, the book value of plant assets retired during the year was $45,000 ($120,000 - $75,000).
Instructions:
a. Prepare the investing activities section of a statement of cash flows. Show supporting computations forthe amounts of (1) proceeds from sales of marketable securities and (2) proceeds from sales of plantassets. Place brackets around numbers representing cash outflows.
b. Prepare the supporting schedule that should accompany the statement of cash flows in order todisclose the non cash aspects of the company's investing and financing activities.
c. Assume that Headrick's management expects approximately the same amount of cash to be used forinvesting activities next year. In general terms, explain how the company might generate cash for thispurpose.
Question from textbook: Financial and Managerial Accounting 16th edition, Ch. 13 Problem 2PSA
|
What is the marginal cost of oil production
: What is the marginal cost of oil production. What is the marginal revenue for oil production. Find the production level that maximizes profit.
|
|
Making regular annual payments
: Allysha just borrowed 35,600 dollars. She plans to repay this loan by making a special payment of 5,500 dollars in 5 years and by making regular annual payments of 6,700 dollars per year until the loan is paid off. If the interest rate on the loan is..
|
|
Maldistribution between primary and specialty physician care
: Submit a paper that explores the factors creating the imbalance/maldistribution between primary and specialty physician care. Be sure to include the following: Specific measures that have been employed to address the problems
|
|
What is the present value of the annual cash flow
: An investment, which is worth 22,000 dollars and has an expected return of 15.75 percent, is expected to pay fixed annual cash flows for a given amount of time. The first annual cash flow is expected in 1 year from today and the last annual cash flow..
|
|
The marketable securities are not cash equivalents
: Prepare the supporting schedule that should accompany the statement of cash flows in order todisclose the non cash aspects of the company's investing and financing activities.
|
|
The firms net capital spending
: The December 31, 2013, balance sheet of Schism, Inc., showed long-term debt of $1,425,000, $145,000 in the common stock account and $2,700,000 in the additional paid-in surplus account. The firm’s net capital spending for 2014 was $1,010,000, and the..
|
|
Reber company had a cash balance per books of
: On May 31, 2014, Reber Company had a cash balance per books of $7,167.50. The bank statement from New York State Bank on that date showed a balance of $6,790.60. A comparison of the statement with the cash account revealed the following facts. Prepar..
|
|
Find the average cost and the marginal average cost function
: What is the marginal cost when x = 1000 and 2000? Find the average cost function C‾ and the marginal average cost function C‾'.
|
|
Determine the mass flow rate of air in the gas-turbine cycle
: Assuming all the compression and expansion processes to be isentropic, determine (a) the mass flow rate of air in the gas-turbine cycle, (6) the rate of total heat input, and (0 the thermal efficiency of the combined cycle.
|