BRIEF EXERCISES
BE23-1 (L01) Novak Corporation is preparing its 2017 statement of cash flows, using the indirect method. Presented below is a list of items that may affect the statement. Using the code below, indicate how each item will affect Novak’s 2017 statement of cash flows.
Code Letter Effect
A Added to net income in the operating section
D Deducted from net income in the operating section
R-I Cash receipt in investing section
P-I Cash payment in investing section
R-F Cash receipt in financing section
P-F Cash payment in financing section
N Noncash investing and financing activity
Items ____ (a) Purchase of land and building. ____ (j) Increase in accounts payable. ____ (b) Decrease in accounts receivable. ____ (k) Decrease in accounts payable. ____ (c) Issuance of stock. ____ (l) Loan from bank by signing note. ____ (d) Depreciation expense. ____ (m) Purchase of equipment using a note. ____ (e) Sale of land at book value. ____ (n) Increase in inventory. ____ (f) Sale of land at a gain. ____ (o) Issuance of bonds. ____ (g) Payment of dividends. ____ (p) Redemption of bonds payable. ____ (h) Increase in accounts receivable. ____ (q) Sale of equipment at a loss. ____ (i) Purchase of available-for-sale debt investment. ____ (r) Purchase of treasury stock.
BE23-2 (L02) Wainwright Corporation had the following activities in 2017.
1. Sale of land $180,000. 4. Purchase of equipment $415,000.
2. Purchase of inventory $845,000. 5. Issuance of common stock $320,000.
3. Purchase of treasury stock $72,000. 6. Purchase of available-for-sale debt securities $59,000.
Compute the amount Wainwright should report as net cash provided (used) by investing activities in its 2017 statement of cash flows.
BE23-3 (L02) Stansfield Corporation had the following activities in 2017.
1. Payment of accounts payable $770,000. 4. Collection of note receivable $100,000.
2. Issuance of common stock $250,000. 5. Issuance of bonds payable $510,000.
3. Payment of dividends $350,000. 6. Purchase of treasury stock $46,000.
Compute the amount Stansfield should report as net cash provided (used) by financing activities in its 2017 statement of cash flows.
BE23-4 (L02,3) Bloom Corporation had the following 2017 income statement...
Prepare the cash flows from operating activities section of Bloom’s 2017 statement of cash flows using the direct method.
BE23-5 (L02,3) Use the information from BE23-4 for Bloom Corporation. Prepare the cash flows from operating activities section of Bloom’s 2017 statement of cash flows using the indirect method.
BE23-6 (L03) At January 1, 2017, Eikenberry Inc. had accounts receivable of $72,000. At December 31, 2017, accounts receivable is $54,000. Sales revenue for 2017 total $420,000. Compute Eikenberry’s 2017 cash receipts from customers.
BE23-7 (L03) Moxley Corporation had January 1 and December 31 balances as follows.
1/1/17 12/31/17
Inventory $95,000 $113,000
Accounts payable 61,000 69,000
For 2017, cost of goods sold was $500,000.
Compute Moxley’s 2017 cash payments to suppliers.
BE23-8 (L02) In 2017, Elbert Corporation had net cash provided by operating activities of $531,000, net cash used by investing activities of $963,000, and net cash provided by financing activities of $585,000. At January 1, 2017, the cash balance was $333,000.
Compute December 31, 2017, cash.
BE23-9 (L02,3) Colbert Corporation had the following 2017 income statement...
Prepare Colbert’s cash flows from operating activities section of the statement of cash flows using (a) the direct method and (b) the indirect method.
BE23-10 (L03) Hendrickson Corporation reported net income of $50,000 in 2017. Depreciation expense was $17,000. The following working capital accounts changed...
Compute net cash provided by operating activities.
BE23-11 (L03) In 2017, Wild Corporation reported a net loss of $70,000. Wild’s only net income adjustments were depreciation expense $81,000, and increase in accounts receivable $8,100. Compute Wild’s net cash provided (used) by operating activities.
BE23-12 (L04) In 2017, Leppard Inc. issued 1,000 shares of $10 par value common stock for land worth $40,000.
(a) Prepare Leppard’s journal entry to record the transaction.
(b) Indicate the effect the transaction has on cash.
(c) Indicate how the transaction is reported on the statement of cash flows.
BE23-13 (L05) Indicate in general journal form how the items below would be entered in a worksheet for the preparation of the statement of cash flows.
(a) Net income is $317,000.
(b) Cash dividends declared and paid totaled $120,000.
(c) Equipment was purchased for $114,000.
(d) Equipment that originally cost $40,000 and had accumulated depreciation of $32,000 was sold for $10,000.
